DAX and USD/JPY – two set-ups that traders are looking at today (25.11.2025)

The DAX is moving virtually flat today, even though the latest data confirmed the stagnation of Germany’s economy. In the FX market, the USD/JPY pair is retreating from the 157 area as investors increasingly seriously price in a December Fed rate cut while fearing government intervention in Tokyo.

Below is a brief overview of the macro environment and two potential trading scenarios – on the DAX and USD/JPY.

Macro environment: Germany stalls, Fed on target again

Germany: GDP = 0, exports weigh on the stock market

Destatis confirmed today that the German economy did not grow by a single 0.1% in the third quarter – GDP was exactly 0.0% q/q, following a 0.2% decline in Q2. Investment growth was neutralized by weak export performance; private consumption fell 0.3%, while government spending rose 0.8%.

This is classic “stagnation without formal recession” – the economy is “escaping” from the technical decline in GDP, but not generating real growth. Weaker exports and cautious households are still weighing on the earnings prospects of DAX companies.

Fed: December cut increasingly real

At the other extreme, we have the US and growing expectations for a Fed rate cut as early as December. Some analyses (including ING) indicate that the market is again treating such a move as a baseline scenario, signaling the possibility of a correction on the dollar after a series of strong months.

Lower rates in the US in the short term:

• weaken the dollar’s advantage over other currencies,
• favor equity indices (cheaper cost of capital),
• but at the same time they increase volatility in pairs with currencies sensitive to the rate differential – like the JPY.

DAX: consolidation against a backdrop of stagnation – “buy the lows” scenario

What is happening in the market?

At mid-session, the DAX is losing a symbolic ~0.03%, trading around 23,250 points. The declines are very limited – the German market is behaving quite calmly, despite confirmation of stagnant GDP and vigilant monitoring of peace talks on Ukraine and upcoming data from the US.

In other words: fundamentals are disappointing, but hopes for a US rate cut are limiting supply pressures.

Technical image (H4/D1 – orientation shot)

With the current level of the index, a distinction can be made:

• local support zone in the area of 23,000-23,100 points – the psychological level and the area around this morning’s minima,
• Resistance in the area of 23,500-23,600 points – the upper limit of the last consolidation,
• a clear upward trend of several weeks, which has only slowed down for now, but has not been reversed (a series of higher lows).

USD/JPY: intervention hanging in the air

Where are we on the chart?

In the FX market, the dollar to the yen is retreating from the 157 area today – in the morning, the pair rebounded from 156.98 and fell to the 156.6-156.7 area, repeating the pattern of previous sessions, when the 157-157.2 area exerted supply pressure.

On a multi-week basis, USD/JPY is still very high – after a strong rally from around 148-150 to the current 156-157.

Fundamentals: the mix of Fed, BoJ and intervention risks

Several elements overlap:

• Interest rate differential: The Fed keeps rates much higher than the BoJ, which has supported the USD/JPY’s upward movement for many months.
• Concerns about the health of Japan’s finances and a cautious BoJ – the government is betting on fiscal support for the economy, and the central bank has been very slow to normalize policy, which the market reads as an argument against a strong yen.
• Intervention risk: the closer we get to 160, the louder the speculation that the Ministry of Finance may repeat the move of 2022, when, at levels of around JPY 150 per dollar, a sovereign supply of currency – estimated to be as much as $6 billion – appeared on the market.
• Fed “on a curve”: if indeed the December cut becomes a reality, some analysts are assuming up to 10% appreciation of the yen in the scenario of a further cycle of cuts, precisely by narrowing the US-Japan rate differential.

The effect? USD/JPY is high, but the fundamental setup is starting to favor a correction – especially if the Fed actually moves to ease policy.

Calendar and major risks for today

For today and the coming hours, it’s worth keeping a few things on your radar:

• US data (PPI, retail sales, ADP report),
• statements by Fed officials that may confirm or undermine the scenario of a December cut,
• The mood around the Ukraine talks – is one of the factors holding back the bullish drive on the DAX,
• possible comments from Japan (Ministry of Finance / BoJ) – any signal of increased “vigilance” towards the exchange rate could trigger a few tens of pips move on USD/JPY in a second.

Summary

DAX – despite stagnant GDP and mixed data, the index remains near its highs thanks to hopes for a softer Fed. As long as the zone of 23,000-23,100 points is defended, the “buy the lows” scenario seems to be the favored short-term approach.
USD/JPY – the pair is stuck below 157, under the shadow of the risk of intervention and growing expectations of Fed cuts. Technically, we can see room for a correction towards 156, or even 155-154.5, if the dollar gets a clear “dovish” signal from the FOMC.