Yen Near 40-Year Lows Despite BOJ Rate Hike, Markets Brace for Possible Intervention 
German Industry Employment Falls to Lowest Level in a Decade 
Italy’s Economy Outpaces Eurozone Peers as Investment Spending Fuels Growth 
Gold Prices Slide as Hawkish Fed and Strong Dollar Weigh on Bullion 
Europe EV Demand Surges as Fuel Prices Rise Amid Iran Conflict 
Trump and Iran Sign Framework Peace Deal in France Amid Ongoing Middle East Tensions 
Canada Imposes 10% Tariff on Canned Vegetable Imports to Protect Domestic Industry 
BOJ Signals More Rate Hikes as Inflation Risks Rise Amid Energy Price Pressures 
Trump Says No Hormuz Strait Tolls During 60-Day Iran Ceasefire 
Trump Questions USMCA Renewal as Trade Talks Continue 
Fed Chair Kevin Warsh Signals Policy Overhaul as Hawkish Rate Outlook Rattles Markets 
Oil Prices Steady as U.S.-Iran Truce Uncertainty and Middle East Tensions Keep Markets on Edge 
China’s AI Manufacturing Boom Masks Weak Consumer Economy, Citi Says 
US Stock Futures Jump on Reports of Preliminary US-Iran Peace Deal Despite Fed’s Hawkish Outlook 
Russia Stocks End Flat as MOEX Index Hits New 52-Week Low; Gold Falls and Oil Mixed 
Asian Currencies Steady as Dollar Holds Firm Ahead of Fed Decision and US-Iran Deal Details 
Asian Stocks Rally as Japan and South Korea Reach Record Highs on US-Iran Peace Deal 
Indonesian stocks suffered a dramatic selloff on Thursday, putting the market on course for its largest two-day decline on record as fears of a potential downgrade to frontier market status rattled investors. The benchmark Jakarta Composite Index plunged 8% in early trading, triggering an automatic trading halt, after already tumbling 7.4% a day earlier. The sharp decline followed warnings from global index provider MSCI and a downgrade in outlook from U.S. investment bank Goldman Sachs.
MSCI raised concerns about market transparency in Indonesia, citing issues around stock ownership, trading mechanisms, and price formation. The index provider warned that if these “investability risks” are not resolved, Indonesia could be downgraded from emerging market to frontier market status. Such a move would have major consequences, as MSCI indexes are tracked by billions of dollars in passive and active investment funds, many of which would be forced to sell Indonesian equities.
Goldman Sachs responded by cutting its recommendation on Indonesian stocks to “underweight,” estimating that an MSCI downgrade could trigger capital outflows ranging from $2.2 billion to $7.8 billion, even though its strategists said such a downgrade remains unlikely. Still, the bank warned that the market is likely to stay under pressure and does not currently represent an attractive entry point.
Investor sentiment has also been undermined by growing concerns over Indonesia’s economic and fiscal direction under President Prabowo Subianto. Foreign investors have been pulling money out amid worries about a widening fiscal deficit, increased state intervention in financial markets, and weakening confidence in policy credibility. The recent appointment of the president’s nephew, Thomas Djiwandono, to the central bank, following the earlier dismissal of former finance minister Sri Mulyani Indrawati, has further shaken market confidence and pushed the rupiah to record lows.
According to LSEG data, overseas investors sold nearly 14 trillion rupiah worth of Indonesian shares in 2025, marking the worst year for equity outflows since 2020, with selling pressure continuing into January. Regulators and the stock exchange are expected to address the market turmoil in a media briefing later on Thursday.
