{"id":74105,"date":"2026-11-03T20:08:18","date_gmt":"2026-11-04T00:08:18","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-and-u-s-midterms-japans-monetary-base-contracts-as-election-odds-shift\/74105\/"},"modified":"2026-11-03T20:08:18","modified_gmt":"2026-11-04T00:08:18","slug":"global-markets-and-u-s-midterms-japans-monetary-base-contracts-as-election-odds-shift","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-and-u-s-midterms-japans-monetary-base-contracts-as-election-odds-shift\/74105\/","title":{"rendered":"Global Markets and U.S. Midterms: Japan\u2019s Monetary Base Contracts as Election Odds Shift"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Japan\u2019s monetary base fell 13.6% year-on-year in October<\/strong>, a slight improvement from the 15.2% contraction in September, as the <strong>Bank of Japan<\/strong> continues its quantitative tightening.<\/li>\n<li><strong>President Donald Trump<\/strong> stated the U.S. has <strong>no immediate plan to strike Iran<\/strong>, easing geopolitical tensions even as he described the military as &quot;locked and loaded.&quot;<\/li>\n<li><strong>Prediction markets<\/strong> on Election Day show an <strong>81% chance of Democrats winning the Senate<\/strong>, with odds of a &quot;mega tsunami&quot; sweep reaching record highs.<\/li>\n<li><strong>Incumbent Victoria Spartz ([R])<\/strong> faces a challenging early deficit in Indiana\u2019s 5th District, with initial reports showing her at <strong>36% against a Democratic challenger&#39;s 63%<\/strong> with 31% of the vote in.<\/li>\n<li><strong><a href=\"https:\/\/stockmarketwatch.com\/energy\/crude-oil\" data-internallinksmanager029f6b8e52c=\"12\" title=\"Crude oil\">Oil prices<\/a><\/strong> reacted to the de-escalation of Iran rhetoric, with <em>Brent crude falling significantly<\/em> as diplomatic discussions were highlighted over military action.<\/li>\n<\/ul>\n<h2>Japan\u2019s Monetary Policy Shift<\/h2>\n<p>The <strong>Bank of Japan<\/strong> (BOJ) reported that the country\u2019s <strong>monetary base<\/strong> stood at <strong>\u00a5537.2 trillion<\/strong> at the end of October 2026. This represents a <strong>13.6% year-on-year decrease<\/strong>, narrowing from the <strong>15.2% drop<\/strong> seen in the previous month. The data reflects the central bank&#39;s ongoing transition away from years of massive stimulus as it seeks to normalize policy.<\/p>\n<p>The BOJ recently maintained its <strong>policy interest rate at 1.25%<\/strong> but signaled that further hikes could be on the horizon for December. This shift comes as underlying inflation in Japan has consistently met the <strong>2% target<\/strong>, a milestone the bank officially certified in late October. Analysts suggest the reduction in the monetary base is a clear signal of <em>accelerated quantitative tightening<\/em> measures.<\/p>\n<h2>U.S. Midterm Election Volatility<\/h2>\n<p>As Americans headed to the polls for the 2026 midterms, prediction markets like <strong>Kalshi<\/strong> (<a href=\"\/stock\/KALSHI\">KALSHI<\/a>) and <strong>Polymarket<\/strong> signaled a potential shift in the balance of power. Traders pushed the odds of <strong>Democrats controlling the Senate<\/strong> to <strong>81%<\/strong>, while the probability of a &quot;mega tsunami&quot;\u2014defined as Democrats winning at least <strong>240 House seats and 54 Senate seats<\/strong>\u2014surged to record levels.<\/p>\n<p>In Indiana&#39;s 5th Congressional District, early returns showed incumbent <strong>Victoria Spartz<\/strong> trailing significantly. With approximately <strong>31% of the vote reporting<\/strong>, Spartz held <strong>36%<\/strong> compared to her Democratic challenger&#39;s <strong>63%<\/strong>. While these figures represent early tallies, they underscore the <em>competitive nature<\/em> of a district that has historically leaned Republican.<\/p>\n<h2>Geopolitical De-escalation and Market Impact<\/h2>\n<p>In an interview with the <strong>Financial Times<\/strong>, <strong>President Donald Trump<\/strong> played down rumors of an imminent military escalation with <strong>Iran<\/strong>. Trump remarked that the U.S. is &quot;getting everything we want&quot; through negotiations and indirect discussions. Despite the &quot;locked and loaded&quot; rhetoric, the President emphasized that there may be <strong>no reason to renew military strikes<\/strong> at this time.<\/p>\n<p>This shift in tone provided immediate relief to energy markets. <em>Brent crude prices<\/em> fell by more than <strong>$10 a barrel<\/strong> in recent days, settling near <strong>$104<\/strong> as the threat of a broader Middle East conflict appeared to recede. Investors remain focused on how a potential change in Congressional leadership following the midterms might further influence the administration&#39;s fiscal and foreign policy agendas.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Japan\u2019s monetary base fell 13.6% year-on-year in October, a slight improvement from the 15.2% contraction in September, as 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