๐ GLOBAL FINANCIAL MARKETS WEEKLY — Special Edition (March 14, 2026)
Simultaneous U.S.–Japan Market Slump: The Beginning of the End for the TACO and Takaichi Trades
The second week of March 2026 will be remembered not as a simple market correction, but as the week when politically driven expectation trades in both the United States and Japan began to unravel simultaneously.
Movements in Europe and Asia faded into the background; this week’s market narrative is entirely defined by the dual slump in the U.S. and Japan.
1. U.S. Equities: Two Consecutive Weeks in Negative YTD Territory
— Clear Signs of the TACO (TRUMP ALWAYS CHICKENS OUT) Trade Losing Momentum
U.S. equities fell into negative year‑to‑date territory last week (March 6), and continued to decline this week (March 13), marking two consecutive weeks in the red.
- Dow Jones: −2.0% (prev. week −3.0%), YTD −3.1%
- S&P 500: −1.6% (prev. week −2.0%), YTD −3.1%
- NASDAQ: −1.3% (prev. week −1.2%), YTD −4.9%
This indicates that expectations surrounding the TACO trade (TRUMP ALWAYS CHICKENS OUT)—which had supported markets since late last year—are now fading.
The policy‑driven optimism that buoyed U.S. equities has clearly lost steam over the past two weeks.
However, it is crucial to note that:
U.S. equities are being sold, but the U.S. dollar is not.
- USD/JPY: +1.2% this week, +1.1% last week → two consecutive weeks of dollar strength and yen weakness
In other words:
This is not “selling America”—it is specifically “selling U.S. equities.”
This shift suggests a change in the underlying character of the market.
2. Japan: Two Straight Weeks of “Stocks Down, Yen Down, Bonds Down” — A Classic Japan Sell‑Off
— The Takaichi Trade Is Unwinding as Well
Japan experienced another week of triple weakness—falling equities, a weaker yen, and rising bond yields—following last week’s sharp declines.
Last week (March 6)
- Nikkei: −5.5%
- TOPIX: −5.6%
- Yen weakness: USD/JPY +1.1%
- 10‑year JGB yield: +0.06
This week (March 13)
- Nikkei: −3.2%
- TOPIX: −2.4%
- Yen weakness: USD/JPY +1.2%
- 10‑year JGB yield: +0.08
→ Two consecutive weeks of accelerating Japan sell‑off
→ The Takaichi trade (yen weakness + equity strength driven by political expectations) is clearly losing momentum
Adding to the symbolism,
Prime Minister Takaichi’s recent remark that she was “delighted with the weak yen” was mocked in video media this week, following the market’s negative reaction.
Political expectations are failing to keep pace with market reality—and are now reversing.
3. Europe and Asia Play a Secondary Role This Week
— The U.S.–Japan Shift Is So Large That Everything Else Fades
Movements in Europe and Asia were modest, underscoring that the U.S. and Japan dominated the global narrative.
- FTSE 100: −0.2%
- Hong Kong: −1.1%
- Shanghai: −0.7%
Last week’s sharp declines in Europe have stabilized, leaving the spotlight firmly on the U.S. and Japan.
4. Bond Markets: Global Yields Rise, Japan Sees a Second Week of Increases
- U.S. 10‑year: 4.28 (+0.14)
- Japan 10‑year: 2.24 (+0.08)
→ Japan’s yields rose for the second consecutive week
→ Combined with falling equities and a weaker yen, this forms a classic Japan sell‑off pattern
5. FX: USD/JPY Rises for the Second Week, Approaching 160
- This week: 159.73 (+1.2%)
- Last week: 157.78 (+1.1%)
→ Two straight weeks of dollar strength and yen weakness
→ This is not the typical “risk‑off = dollar weakness” pattern seen in U.S. equity sell‑offs
6. Commodities: Crude Oil Surges Again, Reigniting Global Inflation Concerns
- WTI: +8.3% this week, +35.6% last week
- CRB Index: +4.0% this week
→ Two consecutive weeks of sharp crude oil gains
→ Global inflation concerns are resurfacing
7. The Simultaneous Unwinding of the TACO and Takaichi Trades
— Political Expectation Trades in Both Countries Are Breaking Down
Despite different political contexts, the structural similarities between the two trades are striking.
| Category | TACO (U.S.) | Takaichi Trade (Japan) |
|---|---|---|
| Background | Expectations for Trump policies | Expectations for Takaichi administration |
| Initial Market Reaction | Equity rally + strong USD | Equity rally + weak JPY |
| Reality | Policy uncertainty | Delayed or unclear policy impact |
| Last Two Weeks | Equity declines (2 weeks) + strong USD | Equity declines + yen weakness + rising yields (2 weeks) |
| Market Sentiment | “Here we go again—TACO” | “Weak yen delight?” (mockery) |
And now:
Both trades are beginning to unwind simultaneously.
Summary:
The second week of March 2026 marks a turning point as political expectation trades in both the U.S. and Japan begin to break down
- U.S. equities have been in negative YTD territory for two consecutive weeks, signaling the unwinding of the TACO trade
- Japan has seen two consecutive weeks of falling equities, a weaker yen, and rising yields—an unmistakable Japan sell‑off
- The U.S. dollar, however, has strengthened for two straight weeks, indicating this is not a broad “sell America” phase
- As a result, both the TACO and Takaichi trades are beginning to end at the same time
The center of gravity in global markets is now firmly on the simultaneous U.S.–Japan downturn, not Europe or China.
Preview for Tomorrow (March 15 Edition)
Tomorrow’s Weekly will feature:
- The Shock of WTI at $260
- The Volcker Moment
- The Three New Arrows of Future Creation
Today’s special edition captures the “present.”
Tomorrow’s issue will explore the “future.”
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