Japan's nominal wage growth in July hit a fresh high since 1997, bolstering the case for further interest rate hikes by the central bank.

Nominal wages in Japan rose 4.7% year-on-year in July, marking the largest gain since 1997, while real wages grew 2.4%, the highest level in five years, extending the streak of positive growth to seven consecutive months. The data broadly exceeded expectations, and combined with signals from Bank of Japan Governor Kazuo Ueda regarding potential rate hikes, market expectations for a rate increase in September have strengthened further. However, household consumption has declined for eight straight months, leaving the effectiveness of wage growth in stimulating domestic demand as the greatest uncertainty surrounding the central bank's policy path.

wallstreetcnSep 8 09:05

[New York Foreign Exchange Market Overview] The United States observes Labor Day as a holiday.

[London Market Overview] In the London foreign exchange market on the 7th, the dollar/yen pair trended downward. Against the backdrop of speculation regarding additional interest rate hikes by the Bank of Japan and expectations of capital repatriation from overseas assets by domestic investors, yen buying intensified, pushing the pair below key levels of 155.50 and 155.00 in early London trading after hitting a high of 156.28 in early Tokyo hours. Triggering stop-loss orders and unwinding of yen carry trades, the pair plunged temporarily to around 154.06. The subsequent recovery remained confined to the upper 154s. With the U.S. observing Labor Day...

Fisco JapanSep 8 06:33

Japan suspected of selling U.S. Treasuries to fund record yen intervention, as foreign exchange reserves fall below $1 trillion

In August, Japan deployed a record approximately $98.6 billion to intervene in the foreign exchange market, raising suspicions of large-scale U.S. Treasury sell-offs for liquidity, which has added further supply concerns to an already stressed Treasury market. Data shows that Japan's foreign exchange reserves plummeted by $94.6 billion, falling below the $1 trillion threshold. In response, U.S. Treasury Secretary Bessent announced a doubling of long-term bond buybacks to stabilize the market. Additionally, Japanese officials have hinted at the potential future use of the FIMA repo facility, which can provide up to $60 billion in daily liquidity without the need to sell bonds.

wallstreetcnSep 7 14:54

How far can the yen's reversal go? Goldman Sachs: Structural recovery is "just getting started," while Bank of America forecasts a rise to 149 by year-end.

Goldman Sachs assesses that the correction of the yen's long-term structural undervaluation may have only just begun.

wallstreetcnSep 5 14:00

Bolstered by dual expectations of interest rate hikes and intervention, the yen surged for two consecutive days, retesting the 156 level and marking its strongest performance since the joint U.S.-Japan intervention!

After two consecutive days of sharp gains, the yen has returned to around 156, with markets simultaneously pricing in a Bank of Japan rate hike and remaining wary of renewed intervention by Japanese authorities. As meetings of the U.S. and Japanese central banks approach, along with Japan’s extended holiday period, analysts warn that the risk of fresh intervention will rise significantly if the USD/JPY exchange rate revisits the 160 level.

wallstreetcnSep 3 19:25

As Japanese Capital Returns Home: Is the Break of the 3% Threshold in JGB Yields Reshaping Global Capital Flows?

① As Japan’s benchmark 10-year government bond yield breaks through the 3% barrier for the first time in three decades, higher returns are beginning to attract Japanese capital held overseas to flow back home; ② This could reverse the once-stable trend of Japanese capital inflows into global markets...

cls.cnSep 3 10:46