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☆ Morning Bid: A welcome calm, but keep your umbrella handy
▼ + stars: | 2023-10-06 | by ( ) www.reuters.com time to read: +2 min

A general view shows the trading floor at the stock exchange in Frankfurt, Germany October 2, 2017. Reuters GraphicsToday, U.S. yields have found a place to rest at 4.72%, the yen is sitting comfortably around 148.50, and Brent is building a floor above $84. APAC stocks are firm, including a welcome 1.8% rally in Hong Kong that paints a rosier backdrop for the mainland market's return from a weeklong holiday on Monday. If sentiment holds in Asia, European stocks can hope to build on yesterday's rebound from March lows. BOJ actions also run counter to the government's desire to put a floor under the yen.

Persons: Kai Pfaffenbach, Kevin Buckland, Brent, Muralikumar Organizations: REUTERS, Reuters Graphics Today, of, Thomson Locations: Frankfurt, Germany, U.S, Hong Kong, Asia, Tokyo

[1/2] A man walks past a signboard of Mitsubishi UFJ Financial Group and MUFG Bank at its headquarters in Tokyo, Japan April 3, 2018. Globally bonds have been heavily sold for weeks - prompting the Bank of Japan to step in to steady the JGB market - as investors reckon on interest rates around the world staying elevated. The lingering concerns, coupled with the prospect of further central bank policy tweaks, are likely to keep investors on guard against buying JGBs," he said. Even if the BOJ raises short-term rates, it will probably have to maintain the YCC framework to avoid any abrupt rise in long-term interest rates, Seki said. The BOJ will have no choice but to engage with long-term rates "because the complete removal of a target band could cause volatility in yield curve and sharp spikes in long-term interest rates," he said.

Persons: Toru Hanai, Hiroyuki Seki, Seki, Makiko Yamazaki, Ritsuko Shimizu, Leika Kihara, Muralikumar Organizations: Mitsubishi UFJ Financial, MUFG Bank, REUTERS, Rights, Bank of, Bank of Japan, Reuters, Thomson Locations: Tokyo, Japan, U.S

☆ Dollar pauses rally as markets brace for US nonfarm payrolls test
▼ + stars: | 2023-10-06 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado November 3, 2009. The dollar index , which earlier in the week hit a roughly 11-month high of 107.34, last settled at 106.37, but remained on track for 12 straight weeks of gains. The benchmark 10-year Treasury yield last stood at 4.7269%, while the two-year yield settled at 5.0267%. The pause in the dollar's rally has also provided a much-needed reprieve for the yen , which last bought 148.48 per dollar. Sterling edged 0.03% lower to $1.2188 and was likewise headed for five straight weeks of losses, struggling against a dominant dollar.

Persons: Rick Wilking, Rodrigo Catril, We've, Vishnu Varathan, Thierry Wizman, Rae Wee, Shri Navaratnam Organizations: REUTERS, Rights, . Treasury, greenback, U.S, Treasury, National Australia Bank, Bank of Japan, Ministry of Finance, Mizuho Bank ., Sterling, European Central Bank, Bank of England, Reserve Bank of Australia, New Zealand, Reserve Bank of New, Thomson Locations: Westminster , Colorado, Rights SINGAPORE, U.S, Reserve Bank of New Zealand

☆ Dollar pauses rally as markets brace for U.S. nonfarm payrolls test
▼ + stars: | 2023-10-06 | by ( ) www.cnbc.com time to read: +3 min

The dollar dipped on Friday but traders were largely keeping to the sidelines in both the currency and U.S. Treasury markets as they looked to U.S. nonfarm payrolls data later in the day for potential catalysts. The dollar index , which earlier in the week hit a roughly 11-month high of 107.34, last settled at 106.37, but remained on track for 12 straight weeks of gains. The benchmark 10-year Treasury yield last stood at 4.7269%, while the two-year yield settled at 5.0267%. The pause in the dollar's rally has also provided a much-needed reprieve for the yen , which last bought 148.48 per dollar. Sterling edged 0.03% lower to $1.2188 and was likewise headed for five straight weeks of losses, struggling against a dominant dollar.

Persons: Rodrigo Catril, We've, Vishnu Varathan, Thierry Wizman Organizations: . Treasury, greenback, U.S, Treasury, National Australia Bank, Bank of Japan, Ministry of Finance, Mizuho Bank ., Sterling, European Central Bank, Bank of England, Reserve Bank of Australia, New Zealand, Reserve Bank of New Locations: U.S, Reserve Bank of New Zealand

☆ Japan's re-defined intervention trigger may slow, but not derail, yen bears
▼ + stars: | 2023-10-06 | by ( Leika Kihara | ) www.reuters.com time to read: +5 min

[1/2] A man looks at an electric monitor displaying the Japanese yen exchange rate against the U.S. dollar and Nikkei share average outside a brokerage in Tokyo, Japan October 4, 2023. While money flow data suggest there was no intervention, the price action was enough to keep yen bears at bay. Rather, the remarks by Kanda were likely a fresh warning shot to markets that authorities could step in any time - even if yen moves were moderate, they say. Intervention isn't the best tool to arrest steady yen declines anyway, said former currency diplomat Hiroshi Watanabe. "There's no point intervening when yen moves are gradual," Watanabe told Reuters.

Persons: Issei Kato, Masato Kanda, that's, Kanda, Tokyo's, Atsushi Takeuchi, They're, Daisaku Ueno, Mitsubishi UFJ, Mitsubishi UFJ Morgan Stanley, Hiroshi Watanabe, Watanabe, Leika Kihara, Tetsushi, Shri Navaratnam Organizations: U.S ., Nikkei, REUTERS, Tokyo, Authorities, Bank of, U.S . Federal Reserve, Treasury, Mitsubishi, Mitsubishi UFJ Morgan, Mitsubishi UFJ Morgan Stanley Securities, Reuters, Thomson Locations: Tokyo, Japan, TOKYO, United States

☆ Asian shares come off 11-month lows as Treasuries rally
▼ + stars: | 2023-10-05 | by ( Stella Qiu | ) www.reuters.com time to read: +3 min

REUTERS/Issei Kato/File Photo Acquire Licensing RightsSYDNEY, Oct 5 (Reuters) - Asian shares rebounded from 11-month lows on Thursday as a plunge in oil prices and softer U.S. labour data helped pull Treasury yields off 16-year peaks, although a looming U.S. payrolls report could make or break the rally. Tracking overnight gains on Wall Street, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.6%. Ten-year yields eased 2 basis points to 4.7163% on Thursday, continuing their overnight retreat from a fresh 16-year high of 4.8840%. "Given where Treasury yields are at the moment, I think the risks are pretty evenly balanced between them on the downside and on the upside." Brent crude futures rose 0.3% to $86.10 per barrel and U.S. West Texas Intermediate crude futures were also up 0.3% at $84.45.

Persons: Issei Kato, Stephen Miller, Joseph Capurso, Stella Qiu, Edwina Gibbs Organizations: Nikkei, REUTERS, Rights, Japan's Nikkei, Treasury, Fed, U.S ., Nasdaq, Traders, CBA, Brent, . West Texas, Thomson Locations: Tokyo, Japan, U.S, Asia, Pacific, Treasuries, Sydney

☆ Undeterred by dollar's renewed strength, analysts see weakness ahead: Reuters poll
▼ + stars: | 2023-10-05 | by ( Hari Kishan | ) www.reuters.com time to read: +4 min

Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado November 3, 2009. Adam Cole, the chief currency strategist at RBC, says he is biased toward a stronger dollar but admits the prevailing foreign exchange view in markets remains a tough nut to crack. "If you look at consensus forecasts, the consensus has been dollar negative for five years now and it hasn't worked," Cole said. One notable outlier among major central banks is the Bank of Japan, which has made the yen one of the worst-performing major currencies this year, down over 13%. (For other stories from the October Reuters foreign exchange poll:)Reporting by Hari Kishan; Polling by Prerana Bhat, Purujit Arun, Pranoy Menon and Anant Chandak; Editing by Ross Finley and Paul SimaoOur Standards: The Thomson Reuters Trust Principles.

Persons: Rick Wilking, Adam Cole, hasn't, Cole, Jane Foley, Rabobank's Foley, Hari Kishan, Prerana Bhat, Purujit Arun, Pranoy Menon, Anant Chandak, Ross Finley, Paul Simao Organizations: REUTERS, Rights, greenback, Treasury, RBC, U.S, Futures, Bank of Japan, Rabobank, Reuters, Central Bank, Thomson Locations: Westminster , Colorado, U.S

☆ Japan's inflation adjusted wages extend declines in August
▼ + stars: | 2023-10-05 | by ( ) www.reuters.com time to read: +3 min

TOKYO, Oct 6 (Reuters) - Japan's real wages in August declined for a 17th straight month, government data showed on Friday, as persistent price hikes continued to outpace salaries. Separate data on Friday showed Japan's consumer spending also shrank for the sixth consecutive month in August, squeezing consumers' purchasing power even as major companies offered their biggest pay increases in three decades. The consumer inflation rate officials use to calculate real wages, which includes fresh food prices but excludes rent, slowed to 3.7%, the lowest in 11 months. Base salary growth in August climbed 1.6% year-on-year, from a revised 1.4% gain in the previous month, the data showed. "As import prices settle down, the growth rate of consumer inflation is also expected to gradually narrow, and real wages will also recover," Koike said.

Persons: Masato Koike, Fumio Kishida, Sompo's Koike, Koike, Satoshi Sugiyama, Kantaro, Christian Schmollinger, Sam Holmes Organizations: Global, Bank of Japan, Sompo, Ministry of Health, Labour, Welfare, Thomson Locations: TOKYO, Base

☆ Japan’s inertia leaves yen at the mercy of the Fed
▼ + stars: | 2023-10-05 | by ( Francesco Guerrera | ) www.reuters.com time to read: +4 min

A man looks at an electric monitor displaying the Japanese yen exchange rate against the U.S. dollar and Nikkei share average outside a brokerage in Tokyo, Japan October 4, 2023. The debate, though, ignores the bigger issue: Surging U.S. bond yields and Japan’s ultra-low interest rates, though, will keep the yen under pressure. Until it tightens monetary policy, Japan will have to live with an exchange rate driven by Washington. Until Tokyo regains control of its monetary levers, it will have to live with a foreign exchange rate driven by U.S. whims. The greenback then fell back to as low as 147.30, sparking speculation that Japanese monetary officials had intervened to prop up the currency.

Persons: Issei Kato, Kazuo Ueda, Ueda, Antony Currie, Oliver Taslic Organizations: U.S ., Nikkei, REUTERS, Reuters, Bank of Japan, Reuters Graphics, Federal Reserve, Bank of, Thomson Locations: Tokyo, Japan, Washington

Treasury yields later receded on a cooler-than-expected U.S. private payrolls report that helped stocks on Wall Street rebound from Tuesday's sharp sell-off. "The market was so over-sold that it was looking for a catalyst to rally on and found it in ADP." The yield on 10-year Treasury notes touched 4.884%, a fresh 16-year high, while 30-year Treasury yields rose above 5% for the first time since August 2007. REUTERS/Brendan McDermid/File Photo Acquire Licensing RightsAustralian, Canadian and British government bond yields have also surged this week. Gold prices crept lower for the eighth consecutive session as elevated Treasury yields amid expectations that the Fed will keep rates higher for longer weighed on investor sentiment.

Persons: Kim Rupert, Rupert, Rhys Williams, Brendan McDermid, Kit Juckes, Brent, Herbert Lash, Tom Wilson, Tom Westbrook, Simon Cameron, Moore, Will Dunham, Mark Potter Organizations: Treasury, ADP, Management, Institute for Supply Management, Federal Reserve, Dow Jones, Nasdaq, Bank of Japan, New York Stock Exchange, REUTERS, Rights Australian, U.S ., Thomson Locations: San Francisco, Bryn Mawr , Pennsylvania, U.S, New York City, Asia, Pacific, Japan, Tokyo, Russia, London, Sydney

European stocks (.STOXX) tumbled as much as 0.6% before clawing back some ground, with indexes in France (.FCHI) and Germany (.GDAXI) both posting losses. Thirty-year Treasury yields also rose above 5% for the first time since August 2007. Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) had fallen 1.3%, its second straight daily drop of over 1%. In commodity markets, the stronger dollar has helped put the brakes on oil prices and higher yields have weighed on gold. Reporting by Tom Wilson and Tom Westbrook; Editing by Simon Cameron-Moore and Mark PotterOur Standards: The Thomson Reuters Trust Principles.

Persons: Issei Kato, Sandrine Perret, it's, Mel Siew, Kit Juckes, Tom Wilson, Tom Westbrook, Simon Cameron, Moore, Mark Potter Organizations: U.S ., Nikkei, REUTERS, LONDON, Bank of Japan, Muzinich, Co, THE, Federal, Treasury, Brent, . West Texas, Thomson Locations: Tokyo, Japan, SINGAPORE, France, Germany, Unigestion, Asia, Pacific, Singapore

☆ Morning Bid: Bond steamroller flattens all
▼ + stars: | 2023-10-04 | by ( ) www.reuters.com time to read: +5 min

Banknotes of Japanese yen and U.S. dollar are seen in this illustration picture taken September 23, 2022. That's all on top of the ongoing rethink of the Fed's long-term rate horizon and increasingly high-pressure economy. Hit from all sides, the Treasury market is simply in ructions - catalysed perhaps by technical, speculative and positioning factors too. Ten-year yields hit a whopping 4.88% early on Wednesday - an increase of 80 basis points in little over a month. And implied volatility in the bond market (.MOVE) hit its highest since May.

Persons: Florence Lo, Mike Dolan, Kevin McCarthy, Michelle Bowman, Austan Goolsbee, Jeffrey Schmid, St, Louis Fed, Kathleen O'Neill Paese, Mehmet Simsek, Bernadette Baum Organizations: U.S, REUTERS, Congress, riven, Federal Reserve, Bank of, Treasury, Nasdaq, Reserve Bank of New, P Global, U.S . Federal Reserve, Chicago Fed, Kansas City Fed, Turkish, Thomson, Reuters Locations: U.S, Washington, Asia, Europe, Reserve Bank of New Zealand, Kansas, London

Japanese yen and U.S. dollar banknotes are seen with a currency exchange rate graph in this illustration picture taken June 16, 2022. Traders have been on watch for weeks for a possible intervention by Japanese officials to combat a sustained depreciation in the yen. "It could just be people expecting intervention and then reacting to what they believed to be intervention," said Asher. To support the Japanese currency, authorities need to tap Japan's foreign reserves of dollars to sell for yen. A senior Japanese ministry of finance official declined to comment on whether Japan had intervened in foreign exchange markets.

Persons: Florence Lo, Michael Brown, Brown, Colin Asher, Asher, Niels Christensen, Jeremy Stretch, Edward Moya, Stretch, Tuesday's, Chuck Mikolajczak, Samuel Indyk, Saqib Iqbal Ahmed, Gertrude Chavez, Dreyfuss, Dhara Ranasinghe, Lucy Raitano, Ira Iosebashvili, Megan Davies, Jonathan Oatis, Andrea Ricci, Hugh Lawson, Gareth Jones Organizations: U.S, REUTERS, Trader, Mizuho, Nordea, Bank of Japan, New York Federal Reserve, CIBC Capital Markets, Ministry, Finance, Seven, Japan, Thomson Locations: TOKYO, London, Copenhagen, Japan, U.S, Tokyo, Asia, New York, United States

☆ Dollar hits new high on upbeat data, yen teeters near intervention line
▼ + stars: | 2023-10-03 | by ( Brigid Riley | ) www.reuters.com time to read: +3 min

The euro also traded near a one-year low against the greenback, dropping below January's 1.0482 nadir, as manufacturing surveys released in both Europe and the U.S. on Monday highlighted the divergence between the two economies. The dollar index rose around 0.5% to 107.06, at one point hitting as high as 107.12, its highest since November 2022. Japan's key economic ministers warned again on Monday that authorities were watching with a "strong sense of urgency" as the yen slid. The yen was last at 149.80 against the dollar, just off the overnight low of 149.88. (This story has been corrected to fix euro milestone to near one-year low, not over one-year low, in paragraph 2)Reporting by Brigid Riley Editing by Shri NavaratnamOur Standards: The Thomson Reuters Trust Principles.

Persons: Dado Ruvic, Carol Kong, Kong, Sterling, Brigid Riley, Shri Navaratnam Organizations: REUTERS, Rights, Federal Reserve, Treasury, Commonwealth Bank of Australia, PMI, Reserve Bank of Australia, Thomson Locations: Europe

Japanese yen and U.S. dollar banknotes are seen with a currency exchange rate graph in this illustration picture taken June 16, 2022. "It's the feeling that the U.S. economy can stomach higher interest rates for a little bit longer," said Bipan Rai, North America head of FX strategy at CIBC Capital Markets in Toronto. "Implicitly it also means that the Fed might not be so quick to cut rates next year either," he said. The Japanese yen weakened 0.31% versus the greenback at 149.77, after falling to 149.90. Investors have been closely watching for signs of intervention in the Japanese currency by the Bank of Japan (BOJ).

Persons: Florence Lo, Kevin McCarthy, Bipan Rai, Edward Moya, Michelle Bowman, Shunichi Suzuki, Chuck Mikolajczak, Marguerita Choy, Alison Williams Organizations: U.S, REUTERS, Federal Reserve, Institute for Supply Management, Congress, Democratic, Republican, Treasury, CIBC Capital Markets, Investors, Bank of Japan, Fed, Bank of Japan's, Japan's Finance, Thomson Locations: U.S, North America, Toronto, New York

☆ BOJ discussed factors for exiting easy policy at Sept meeting; 10-yr JGBs falter
▼ + stars: | 2023-10-02 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

FILE PHOTO: Japanese national flag is hoisted atop the headquarters of Bank of Japan in Tokyo, Japan September 20, 2023. Under yield curve control (YCC), the BOJ guides short-term interest rates at -0.1% and the 10-year bond yield around zero. A Reuters poll in September forecast that the central bank will end its negative interest rate policy some time next year and YCC by end of 2024. “Even if the BOJ were to terminate its negative interest rate policy, this can be considered as continuation of monetary easing if real interest rates remain negative. But he has also said the BOJ will consider an exit when sustained, stable achievement of its price target is in sight.

Persons: Issei Kato, Kazuo Ueda’s, Governor Ueda, Ueda Organizations: Bank of Japan, REUTERS, Reuters, Bank Locations: TOKYO, Tokyo, Japan, YCC

☆ Japan's business mood improves, capex firm in boost to economic outlook
▼ + stars: | 2023-10-02 | by ( Leika Kihara | Tetsushi Kajimoto | ) www.reuters.com time to read: +4 min

TOKYO (Reuters) -Japan’s business sentiment improved in the third quarter, a central bank survey showed, suggesting conditions for a durable economic revival are falling into place even as a global slowdown keeps policymakers cautious about the outlook. Big non-manufacturers’ index stood at 27, up from 23, the survey showed, above a median market forecast of 24 and improving for the sixth straight quarter. The survey showed big manufacturers expect conditions to improve three months ahead, though sluggish global demand and signs of weakness in China’s economy cloud the outlook. “The tankan showed Japan is on track for a domestic-demand led growth. But analysts expect a mild contraction in the July-September quarter as sluggish global demand weigh on exports.

Persons: Maki Shiraki, ”, Marcel Thieliant, Yoshimasa Maruyama Organizations: Nissan, Co, Ltd's, EV, REUTERS, Companies, Bank of Japan, Capital Economics, Big, Nikko Securities Locations: TOKYO, Tochigi prefecture, Japan, Asia, U.S

Oct 3 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Investors in Asia are also awaiting the Reserve Bank of Australia's latest policy decision and guidance on Tuesday. But it is the relentless rise in U.S. Treasury yields and the dollar that will set the tone across the region. But the yen continues to slide, suggesting it is still being driven by U.S. yields and the dollar side of the equation. All but two of 32 economists in a Sept. 27-28 poll expected the RBA to hold its official cash rate steady.

Persons: Jamie McGeever, Deepa Babington Organizations: Treasury, Investors, Reserve Bank, Australia's, Bank of Japan, Aussie, ., Reserve Bank of Australia, PMI, Thomson, Reuters Locations: Asia, U.S, Japan, Tokyo, Australia, PMIs, South Korea

☆ BOJ increases Wednesday's bond purchase as 10-year JGB yields hit decade peak
▼ + stars: | 2023-10-02 | by ( Clement Tan | ) www.cnbc.com time to read: +2 min

A pedestrian walks past the Bank of Japan (BoJ) building in central Tokyo on July 28, 2023. Richard A. Brooks | Afp | Getty ImagesThe Bank of Japan announced it's increasing its bond purchases at Wednesday's auction, as a spike in government bond yields tests its resolve to defend its yield curve control policy. Yields on 10-year Japanese government bonds hit as much as 0.775% Monday, its highest since September 2013 and nearing the BOJ's hard 1% cap. The Japanese yen shed nearly 0.3% to about 149.73 yen against the dollar, nearing the 150 yen level that prompted BOJ intervention last year. Hawkish comments in the minutes of a lively BOJ September policy meeting released earlier Monday reignited expectations the BOJ is slowly laying the groundwork for the end to negative interest rates.

Persons: Richard A, Brooks, it's, BOJ, Hawkish, Kazuo Ueda's, Ueda's Organizations: Bank of Japan, Afp, Getty, of Japan Locations: Tokyo

☆ Buoyant dollar pushes fragile yen to within striking distance of 150
▼ + stars: | 2023-10-02 | by ( ) www.cnbc.com time to read: +3 min

Photo taken on April 20, 2022 shows the Japanese yen and U.S. dollar banknotes in Tokyo, Japan. The dollar kicked off the last quarter of the year on the front foot on Monday as the prospect of higher-for-longer U.S. rates provided solid support, pushing the yen to an 11-month low. Sterling was last 0.13% lower at $1.2188, having similarly slid nearly 4% against the dollar in the third quarter. "This puts the 1 November FOMC meeting back on the table as a potential venue for a further 25-basis-point rate hike." Elsewhere, the Australian dollar fell 0.07% to $0.64305, while the kiwi edged 0.1% lower to $0.59925.

Persons: Olivier d'Assier, Jarrod Kerr, Sterling, Kiwibank's Kerr, Chris Weston Organizations: U.S, Congress, Democratic, U.S . Labor Department, CPI Locations: Tokyo, Japan, Asia, Australia, China

TOKYO (AP) — Business sentiment among big Japanese manufacturers improved in July-September for the second straight quarter, according to a central bank survey released Monday. The Bank of Japan's “tankan” quarterly survey measured business sentiment among major manufacturers at plus 9, up from plus 5 in June. That’s tough for Japan, which imports almost all its oil, at a time when the Japanese yen is weakening. For the tankan’s projection of business sentiment three months from now, large manufacturers are expecting an improvement of 1 point at plus 10. What the Bank of Japan will do to interest rates in coming months is being closely watched.

Persons: ”, Toshihiro Nagahama, ___ Yuri Kageyama Organizations: TOKYO, Japan's, Dai, ichi, Toyota, Nintendo, Bank of Locations: Ukraine, Japan, Bank of Japan

☆ BOJ dispels view risk of loss will impede easy-policy exit
▼ + stars: | 2023-09-30 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

Bank of Japan Governor Kazuo Ueda speaks at a group interview with media in Tokyo, Japan, May 25, 2023. "The objective of the Bank's monetary policy is achieving price stability, which is its mission as stipulated by law. "A central bank's ability to conduct monetary policy is not impaired by a temporary decrease in its profits and capital, provided that it conducts appropriate monetary policy," he said. Some academics have warned the BOJ's huge balance sheet will make an exit from ultra-loose policy difficult by exposing it to massive losses that could put its credibility on the line. But he has also said the BOJ will consider an exit when sustained, stable achievement of its price target is in sight.

Persons: Kazuo Ueda, Kim Kyung, Ueda, Haruhiko, Leika Kihara, William Mallard, Sonali Paul, Michael Perry Organizations: Japan, REUTERS, Bank of Japan, Japan Society of Monetary, Thomson Locations: Tokyo, Japan, TOKYO

☆ What could break under higher-for-longer interest rates?
▼ + stars: | 2023-09-29 | by ( ) www.reuters.com time to read: +5 min

Yet, the strain from interest rate hikes has just started to come through and with central banks signalling that rates will likely stay higher for longer, the notion of something "breaking" remains strong. Reuters Graphics Reuters Graphics1/ PROPERTY PAINNowhere is the impact of higher rates being felt more acutely than in real estate, still reeling from COVID-19. "We have many zombie companies in the United States and Europe from the low interest rates era, and I cannot imagine how they can survive now with high interest rates." Still, big question marks remain over their future, not least from a global property rout. Miller noted that European banks are also vulnerable given their bigger size relative to the economy that leaves them more exposed to risks from various pockets.

Persons: Jonathan Ernst, Heimstaden, Markus Allenspach, Julius Baer, Guy Miller, Miller Organizations: . Federal, REUTERS, Reuters Graphics Reuters, SBB, China Evergrande, HK, Federal, European Central Bank, Zurich Insurance, The Bank of Japan, Capital, Thomson Locations: Washington, Sweden, Europe, Stockholm, Berlin, CHINA, China, United States, Big U.S

A woman looks at items at a shop in Tokyo, Japan, March 24, 2023. The Tokyo core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, rose 2.5% in September from a year earlier, against a median market forecast for a 2.6% gain. It slowed from a 2.8% increase in August but exceeded the Bank of Japan's 2% target for the 16th straight month. Analysts expect inflation to keep slowing in coming months reflecting recent declines in commodity prices and the base effect of last year's sharp rises. The inflation overshoot led the BOJ to make modest tweaks to its bond yield control policy last month, a move investors saw as a shift away from decades of ultra-loose monetary policy.

Persons: Androniki, Kazuo Ueda, Leika Kihara, Sam Holmes Organizations: REUTERS, Bank of Japan's, Thomson Locations: Tokyo, Japan, TOKYO

☆ Yen intervention a hard sell even as 150 to the dollar 'red line' beckons
▼ + stars: | 2023-09-29 | by ( Kevin Buckland | ) www.reuters.com time to read: +6 min

But, Japanese authorities could find propping up their currency both difficult to achieve and hard to justify. To make even a ripple in the $5 trillion currency market, the BOJ would need to draw down massive amounts of dollar reserves. Wakabayashi, like many other analysts and investors, considers the 150 yen per dollar level a red line for currency intervention, not least because of its significance as a symbol of climbing costs of living from imported food and fuel. INTERVENTION IMMINENTThe yen careened to a 32-year trough at 151.94 last October before being reined in by several bouts of heavy intervention, the first by Japanese authorities in a generation. Measures of expected market volatility remain subdued.

Persons: Kim Kyung, Bank of Japan's hesitancy, Kazuo Ueda, You've, they're, Bart Wakabayashi, Fumio Kishida, Shunichi Suzuki, Masayuki Kichikawa, Ray Attrill, Janet Yellen, Aninda Mitra, Mitra, Kevin Buckland, Alun John, Vidya Ranganathan, Simon Cameron, Moore Organizations: National Printing Bureau, Bank of Japan, REUTERS, Rights, Bank of Japan's, U.S . Federal Reserve, U.S, Treasury, Fed, State Street Bank, Trust, Finance, Sumitomo Mitsui DS Asset Management, Ministry of Finance, National Australia Bank, BNY Mellon Investment Management, Thomson Locations: Tokyo, Japan, U.S, Washington, Asia, London

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