The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
2111 ET - Japan Flash PMI data suggests the economy continues to shrug off energy cost shock, says Marcel Thieliant, head of economics for Asia at Capital Economics. The report indicates that the economy remains resilient and still points to a sharp acceleration in inflation, he adds. The composite PMI edged up from 52.8 to a four-month high of 53.1 in July, which is consistent with above-trend GDP growth of around 1.5%, he says. That improvement is difficult to explain because both the services and the manufacturing PMI softened, Thieliant adds. It could be that Japan is finally starting to benefit from stronger demand for AI-related products, he says. (james.glynn@wsj.com; X @JamesGlynnWSJ)
2015 ET - Japanese stocks fall amid renewed concerns about higher energy costs. Technology, chip and airline stocks are leading declines. SoftBank Group drops 5.2%, Kioxia Holdings is 3.5% lower and Japan Airlines is down 3.3%. The dollar is at 163.84 yen, up from Y163.07 as of Thursday's Tokyo stock market close. Investors are closely watching developments in the Middle East and oil prices after Brent crude topped $100 a barrel for the first time in two months. The Nikkei Stock Average declines 2.3% to 64904.21. (kosaku.narioka@wsj.com; @kosakunarioka)
2011 ET - The yen consolidates near a 40-year low against the dollar, and could weaken further, analysts say. "Growing expectations of further interest rate hikes in the United States have strengthened the US dollar," SMBC's Hirofumi Suzuki says in an email. "Heightened tensions in the Middle East have pushed up crude oil prices, placing selling pressure on the currencies of energy-importing countries. Within Asia, the Japanese yen and Thai baht are particularly vulnerable to this pressure," the chief FX strategist says. Also, the pace of the BOJ's tightening has been extremely gradual, Suzuki adds. The dollar is flat at 163.83 yen after touching 163.98 yen overnight, the highest intraday level since 1986, LSEG data show. (ronnie.harui@wsj.com)
2004 ET - JGBs edge lower in the morning Tokyo session, tracking overnight price declines in U.S. Treasurys. Both JGBs and Treasurys tend to move in tandem. JGB prices may also be weighed down by the recent surge in crude oil prices and yen weakness, which typically leads to higher inflation in Japan and could prompt the BOJ to raise rates more quickly. "With crude oil prices approaching their recent peaks and the yen falling to fresh lows against the dollar, the [central] bank's concerns about upside risks to inflation won't have dissipated," says Marcel Thieliant, head of Asia-Pacific at Capital Economics, in commentary. The 10-year JGB yield is 2.5 bps higher at 2.795%. (ronnie.harui@wsj.com)
1946 ET - Japanese stocks may fall due to renewed concerns about higher energy costs and following overnight stock declines on Wall Street. Nikkei futures are down 1.1% at 65505 on the SGX. The dollar is at 163.82 yen, up from Y163.07 as of Thursday's Tokyo stock market close. Investors are focusing on developments in the Middle East and oil prices after Brent crude topped $100 a barrel for the first time in two months. The Nikkei Stock Average rose 0.5% to 66422.60 on Thursday. (kosaku.narioka@wsj.com)Auckland International Airport handled fewer passengers in June than a year earlier and this will reinforce investor concerns about a sluggish recovery in traffic, says Citi. Auckland International Airport said domestic and international traffic fell around 4-5% on year, and are running 13-16% below pre-pandemic levels. "Rising Middle East tensions and elevated oil prices threaten further capacity cuts in first-half FY27, posing downside risks to consensus FY27 passenger forecasts and earnings," analyst Suraj Nebhani says. Weak traffic pressures other high-margin revenue streams, including retail and car parking. "Consequently, we see near-term downside to the share price heading into the August results and retain our neutral rating," Citi says. Still, it's upbeat about the medium-term outlook. Auckland International Airport is down 0.1% at NZ$8.56 today. (david.winning@wsj.com; @dwinningWSJ)
1831 ET - Power generator Mercury NZ's strong end to FY26 means it will comfortably beat earnings guidance, Forsyth Barr says. Mercury NZ was able to expand profit margins in 4Q as a result of improved electricity trading. Conditions in the quarter, with hydro-generation volumes some 18% above average and wind-power output up 6% on year. Forsyth Barr expects Mercury NZ's Ebitdaf totaled NZ$1.069 billion in FY26. That is 2% above the power company's own guidance. "Looking ahead, further earnings growth will come from its new generation projects (Ngā Tamariki, Kaiwera Downs 2, and Kaiwaikawe), partially offset by falling electricity futures prices, its Manawa hedge contract repricing and, in the near term, expected El Niño impacts," analyst Andrew Harvey-Green says. Forsyth Barr retains a "neutral" call on the stock. (david.winning@wsj.com; @dwinningWSJ)
1821 ET - For Forsyth Barr, the key disappointment in KMD Brands's latest update was the higher-than-expected net debt position. KMD signaled net debt of NZ$63 million-NZ$66 million in FY26. That was materially above Forsyth Barr's forecast for a modest net cash position. Analyst Paul Laxton Koraua says the miss reflected changes to KMD's supplier terms, elevated inventory, and an NZ$8 million currency-translation impact on its Australian dollar denominated debt. Some one-off capital boosts are likely in FY27. They include US$5 million of tariff refunds. Still, the net debt position "requires disciplined execution through FY27 ahead of the NZ$43 million reduction in its debt facility," Forsyth Barr says. Its price target falls 7.0%, to NZ$2.00/share. KMD is up 0.9%, at NZ$1.72, today. (david.winning@wsj.com; @dwinningWSJ)
1816 ET - Casino operator SkyCity Entertainment's deal to sell The Grand Hotel puts it in a position to resume dividend payouts in FY27, says Forsyth Barr. SkyCity has entered into a non-binding heads of agreement for the sale of The Grand Hotel, but didn't say how much the asset will fetch. It came five days after SkyCity sold two other properties. Forsyth Barr values The Grand Hotel at NZ$200 million. "Industry feedback and recent transactional evidence suggest upside to this valuation, and we believe a potential sale price of between NZ$200 million and NZ$250 million could be achieved," analyst Paul Laxton Koraua says. Cash proceeds from the transaction are likely in 1H27. Forsyth Barr forecasts a NZ$0.03/share dividend in FY27, representing a 75% payout of net profit. (david.winning@wsj.com; @dwinningWSJ)
1551 ET - Treasury prices climbed alongside rising oil prices ahead of the Fed's interest rate meeting next week, with the 10-year yield reaching its highest since January 2025. Jobless claims fell to their lowest level since 1969. Meanwhile, the Chicago Fed reported that growth improved in June. The 2-year yield rose to 4.358%, the highest level since February last year. The 10-year Treasury yield climbed 4.703%. (jessica.coacci@wsj.com)
1451 ET - "AI investment has become a defining driver of the U.S. economy and capital markets," Fitch Ratings says, adding the pipeline of planned issuance in the second half of this year will test market capacity. IT capital spending was up 18% year over year in 1Q, and directly contributed to 1.4 percentage point of GDP growth, according to Fitch. The Wall Street Journal reported that investors are dumping tech stocks given fresh concerns that hyperscalers are spending on AI. Fitch says it lowered its 2026 U.S. GDP forecast to 1.9%. In addition, Fitch says its midyear sector outlook revisions show 'deteriorating' outlooks assigned to North American Sovereigns, U.S. Homebuilders, and Global Airlines, among others. (stephen.nakrosis@wsj.com)
1328 ET - Tesla's heavy investments likely won't bear fruit until further down the road than UBS previously forecast, analysts say in a note. Tesla's management struck a "somewhat cautious" tone on its robotaxi business and Optimus robot during the call, likely trying to dampen investors' near-term expectations while still talking up the long-term opportunity, the analysts say. Tesla has ambitious goals with robotaxi, but it needs to be careful with scaling it up given concerns over safety, while Optimus will be tough to scale since it has no existing supply chain, the analysts say. "For the stock to meaningfully accelerate to the upside, the company will likely need to begin to show more tangible progress on these initiatives," they say, reiterating their neutral rating and lowering their price target to $385 from $442. Tesla sinks 14% to $322.37. (kelly.cloonan@wsj.com)
(END) Dow Jones Newswires
July 23, 2026 21:11 ET (01:11 GMT)
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