The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0324 GMT - China continues to rely on exporters to support the economy, says Pinpoint Asset Management economist Zhiwei Zhang in a note. The trade imbalance between China and its trading partners has become a key issue for policymakers, he says. The U.S. government has made clear at the G20 meeting that it is concerned about the issue, he adds. Investors and analysts will watch how the issue is addressed at the U.S.-China summit later this month and at a meeting between Chinese and European policymakers in October, Zhang says. Given the recent appreciation of the Japanese yen and South Korean won, pressure is building for the yuan to appreciate, he adds. That said, the exchange-rate adjustment is likely to be modest this year and have little impact on the trade imbalance, Zhang says. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0320 GMT - The Singapore dollar strengthens slightly against its U.S. counterpart in the Asian session. "Overall, currency trading remained range-bound as investors awaited fresh economic data and further developments on the geopolitical front," UOB's Global Economics & Markets Research team says in a report. "With U.S. markets reopening after the Labor Day holiday, trading activity is expected to pick up today," the team adds. The U.S. dollar is 0.1% lower at S$1.2648. (ronnie.harui@wsj.com)
0309 GMT - Economic fundamentals remain crucial for determining the dollar-yen pair's direction, says Daiwa Securities strategist Kenta Tadaide. Among key events, U.S. inflation data are due this week, followed by the Fed and the Bank of Japan policy meetings next week, he says. "A potential acceleration in U.S. inflation that prompts a tighter monetary stance from the Fed could support the dollar, while mounting expectations for further BOJ interest-rate increases would likely heighten upward pressure on the yen," he says. The dollar is at 153.25 yen after briefly falling below the Y153.00 level for the first time since February. (megumi.fujikawa@wsj.com)
0259 GMT - Consumer inflation likely remained broadly steady in Taiwan last month, above the 2% threshold watched by the central bank. A WSJ poll of six economists projects an on-year rise of 2.4% in August, a touch below July's 2.54%. That would mark a fourth straight month above 2%, a streak that could stoke expectations for higher interest rates. Taiwan's central bank has held rates steady for nine consecutive quarters, despite rising pressure from the Middle East oil shock. But with CPI looking increasingly sticky, DBS economists say policymakers could face greater pressure to tighten, citing December as a likely window. Others see scope for a move as early as this month. Explosive export-driven growth could add another inflationary impulse and suggests the economy can absorb higher rates. August CPI is due later Tuesday. (fabiana.negrinochoa@wsj.com)
0250 GMT - Nomura raises its Thailand inflation forecasts for this year amid higher oil prices. Nomura now projects 2026 headline and core inflation for Thailand at 1.8% and 1.1%, up from its previous forecasts of 1.5% and 0.7%, respectively. Headline CPI rose 2.53% on year in August from July's 1.95%, led by higher fuel as well as pork and chicken prices, its economists note. Brent crude oil prices pushed up again and retail fuel costs should remain high for the rest of the year, although this may be partly offset by government subsidies. However, pork and chicken prices are expected to remain high due to severe supply disruptions, the economists add. (amanda.lee@wsj.com)
0228 GMT - The South Korean won's recent sharp gains could eventually reverse if the local currency strengthens to 1,250-1,300 won versus the dollar, says Eugene Investment & Securities FX economist YH Cha. South Korea's brisk semiconductor-led exports, large trade surplus and exporters' repatriation of dollar earnings have driven the won to a 23-month high. The dollar is last trading 0.5% lower at 1,338.30 won, its lowest level since October 2024, bringing its three-month loss against the won to more than 12%, according to FactSet data. However, the won remains exposed to the long-term trend of rising overseas investment by Korean individuals and the resulting increase in dollar demand, Cha says. (kwanwoo.jun@wsj.com)
0225 GMT - Japan's wage data released earlier Tuesday clears the way for a Bank of Japan rate increase later this month, Capital Economics says in commentary. The government's preliminary estimate showed that annual growth in labor cash earnings quickened to 4.7% in July from 4.0% in June, the research firm says. Overall, "we remain confident that the BoJ will deliver a 25bp hike at its meeting next week," Capital Economics says. "We also expect the pace of tightening to pick up in the coming months, as the Board presses ahead with a return to neutral," the firm added. (ronnie.harui@wsj.com)
0207 GMT - The latest strength in the yen likely reflects some positioning adjustments ahead of the Bank of Japan's coming meeting, says Michael Wan at MUFG in a note. The yen rose to its strongest level against the dollar since late February on Monday amid holiday-thinned U.S. trading and ongoing market pricing for a faster pace of policy tightening by the BOJ, the analyst says. Markets have largely priced in a 25bps hike at the policy meeting next week and attention is shifting towards the BOJ's communication about the broader path of rate hikes at subsequent meetings, Wan says. MUFG expects the dollar to move towards the low 150s level against the yen over time with the BOJ raising rates in the September and January policy meetings. The dollar is last 0.6% lower at 153.41 yen. (sherry.qin@wsj.com)
0151 GMT - Thailand's consumer price growth could exceed 3.0% in September and remain elevated through 4Q, CIMB economists say in a report. Headline CPI rose 2.53% from a year earlier in August, up from July's 1.95%. Energy prices remain a wild card for Thailand's CPI trajectory, with geopolitical tensions likely keeping domestic retail fuel costs high. Food prices could also rise further, as El Nino is set to be at its strongest in 4Q. CIMB maintains its 2026 headline CPI forecast for Thailand at 2.1%. (amanda.lee@wsj.com)
0135 GMT - No matter where you look in the gold market, the bulls appear to be in charge. "Across positioning, flow, and derivatives data, every signal we track continues to point in the same direction: the market is bullish on gold across all fronts," says Societe Generale. What began as a geopolitical shock has evolved into a broad-based build-up of physical, futures and options bets that span retail investors, professional money managers and derivatives traders, it says. "We are now awaiting August central bank data to confirm whether official-sector demand, a key structural pillar of this bull market, remains as robust as in prior months," says SocGen. Any acceleration or slowdown in central-bank buying could help show how durable the bull run might be, it says. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0127 GMT - Bitcoin edges higher in Asia, but remains below the $80,000 mark. Traders are keeping an eye on upcoming U.S. CPI data, which would offer clues about the Fed's interest rate decision next week. Although the prospect of a Fed rate hike has unsettled markets, it is rapidly becoming priced in, says IG's Chris Beauchamp in a note. "What matters for bitcoin traders and investors will be the question of whether this is the first move in a cycle or a one-off," he adds. Higher borrowing rates tend to weigh on risk appetite, dragging cryptocurrencies. Bitcoin is 0.1% higher at $79,344.95.(amanda.lee@wsj.com)
0021 GMT - JGB futures rise in the early Tokyo session as the yen's strength is seen to ease inflationary pressures in Japan. A stronger yen tends to reduce Japan's import prices, which typically leads to lower inflation. Today's focus may also be on Japanese Finance Ministry's auction of about 2.5 trillion yen of five-year sovereign notes. Investors are likely to "take a cautious stance on the auction given the [BOJ's] Sep. [meeting] falls later in the month," SMBC Nikko Securities' Lisa Mochizuki says in a research report. "Against this backdrop, we forecast a somewhat weak auction result," the junior analyst adds. Benchmark 10-year JGB futures are 0.20 yen higher at 126.21 yen.
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