Macro update
Yen falls to its weakest level in four decades: The dollar climbed to ¥162.84, its highest level since 1986, despite investors remaining alert to the possibility of intervention by Japanese authorities ahead of Thursday’s US employment report.
Dollar strengthens as Treasury yields climb: A sharp overnight rise in US Treasury yields, with the 10-year yield increasing by almost nine basis points, supported the greenback, pushing the euro down 0.11% to $1.1408 and sterling 0.2% lower to $1.32369.
Markets increase expectations for further Fed tightening: Futures imply a 33% probability of a Federal Reserve rate hike this month and a 67%-88% chance of an increase in September, with investors closely watching Fed Chair Kevin Warsh’s appearance at the European Central Bank’s annual forum in Portugal.
Asian equities deliver a mixed performance as AI demand remains in focus: Japan’s Nikkei gained 0.6% by midday, led by semiconductor stocks including Taiyo Yuden and Sumco, while South Korea’s KOSPI slipped 0.9% despite record growth in semiconductor exports.
Oil prices edge higher as US-Iran negotiations remain stalled: Brent crude rose 0.45% to $73.28 a barrel after Tehran said it would meet international mediators rather than US officials in Doha, while US crude inventories fell by 6.1 million barrels last week.
Gold remains under pressure as risk appetite improves: Spot gold eased 0.7% to $3,977 an ounce, extending the weakness seen during the second quarter as investors continued to favour risk assets over traditional safe havens.