0512 GMT - The market is digesting more restrictive U.S. monetary policy, says Stephen Coltman, head of macro at 21shares, in a note. Markets have gone from pricing rate cuts at the start of the year to now expecting rate increases over the coming months, he says. Chairman Kevin Warsh's first FOMC meeting was hawkish relative to expectations while at the same time inflation expectations have been collapsing as oil prices return to prewar levels, Coltman says. "The combination of these two factors has led to a surge in real yields at the front end of the U.S. rates curve and effectively an aggressive tightening of U.S. monetary policy," he says. (emese.bartha@wsj.com)
0506 GMT - Amundi Investment Institute maintains a neutral view on U.S. Treasury duration for now. "Robust U.S. labor data and high inflation are putting upward pressure on U.S. rates and confirm a neutral stance in U.S. duration," it says in its mid-year outlook. Amundi sees value on the middle part of the curve and continues to believe that the Treasury curve will steepen. The five-year U.S. Treasury yield falls 0.9 basis points to 4.134%, while the 10-year yield falls 0.6 basis points to 4.368%, according to Tradeweb. (emese.bartha@wsj.com)
0435 GMT - The dollar could extend gains versus the yen if it holds above the 21-day exponential moving average, which is now at 161.00 yen, says Quek Ser Leang of UOB Global Economics & Markets Research in a note. "With USD/JPY in uncharted territory, there are few obvious technical reference points to identify as meaningful resistance," the senior technical strategist says. Hence, "round-number resistance levels may serve as the most practical resistance levels," the strategist says. However, the moving average convergence divergence indicator on the daily chart continues to show a clear negative divergence, suggesting upward momentum is lackluster, the strategist adds. The dollar is 0.1% higher at 162.16 yen, LSEG data show. (ronnie.harui@wsj.com)
0433 GMT - Bitcoin falls in Asian trading hours as traders continue to digest last week's higher-than-expected U.S. inflation data, which may prompt the Fed to keep rates higher for longer, Sygnum Bank analysts say. The PCE index, the Fed's preferred inflation gauge, hit a three-year high in May, signaling the easing cycle under new Chairman Kevin Warsh may be pushed even further out. Against this macro backdrop, "the opportunity cost of holding a non-yielding asset stays high, and a leveraged, thin-liquidity market amplifies the move on the way down," the bank adds. Sygnum says the market is now waiting for cooler inflation or a crypto-specific catalyst to revive prices. Bitcoin is last down 1.4% at $59,395.70. (jason.chau@wsj.com)
0412 GMT - Singapore's second-half GDP growth outlook is turning positive amid the de-escalation of U.S.-Iran tensions, says DBS senior economist Chua Han Teng in a report. The economy is likely to benefit as financial markets, business and consumer confidence improve amid easing geopolitical tensions. The global artificial intelligence-driven technology cycle also appears to have further room to run. Demand for Singapore's memory chips, server-related products and semiconductor equipment, would be driven by major hyperscalers as they ramp up their AI infrastructure. DBS raises its 2026 and 2027 GDP growth forecasts for Singapore to 4.3% and 3.0%, up from 2.8% and 2.3%, respectively. (amanda.lee@wsj.com)
0302 GMT - The yen's move past 162 to the dollar raises intervention risks, with the level seen as the line where officials could step in, Maybank analysts say. So far, there is no clarity on if intervention is going to occur or occurring, but there has been continued jawboning from officials, they write in a note. Maybank stays alert for the sharp moves that can be associated with intervention, noting ample ammunition in deposits and securities far eclipsing the last round of intervention that cost an estimated $74 billion. "At this point, we watch if the pair can hold above the 162.00 mark for the near term with the next resistance at 164.00." Maybank pegs support at 158.00 and 155.00. Yen last at 162.14. (fabiana.negrinochoa@wsj.com)
0258 GMT - The Singapore dollar weakens slightly against its U.S. counterpart in the Asian session amid mixed signals over expected U.S.-Iran talks. On the one hand, President Trump said that the "peace talks were due to resume Tuesday in Doha," Maybank analysts say in a FX Research & Strategy report. On the other hand, however, Iran "ruled out negotiations 'at any level' with the U.S.," the analysts say. "Sentiment remains tentative," they add. The U.S. dollar is 0.1% higher at 1.2935 Singapore dollars, LSEG data show. (ronnie.harui@wsj.com)
0228 GMT - The primary driver of the yen's weakness is fundamental issues on the Japanese side, such as a widening digital services deficit, as well as expanding foreign investments by domestic individuals and companies, says Shota Ryu, a strategist at Mitsubishi UFJ Morgan Stanley Securities. Speculators have built up huge bets against the yen in the futures market, indicating that trading has become overheated, Ryu says. This would justify Tokyo's intervention to prop up the yen, he adds. Finance Minister Satsuki Katayama said Tuesday the government stands ready to take "decisive" action in the currency market as needed.(megumi.fujikawa@wsj.com)
0227 GMT - The Malaysian ringgit is expected to remain under pressure in the near term as a stronger U.S. dollar and global economic uncertainty continue to weigh on emerging-market currencies, MBSB Research says in a note. It expects safe-haven demand for the dollar and higher U.S. interest rates to keep downward pressure on the Malaysian currency. Still, the Southeast Asian country's resilient economic growth, healthy foreign direct investment inflows, strong exports and a wider trade surplus should help limit the local currency's further weakness, MBSB Research adds. It expects the dollar to average around 4.01 ringgit in 2026, compared with 3.92 ringgit previously forecast. The dollar is 0.3% lower at 4.0580 ringgit. (yingxian.wong@wsj.com)
0203 GMT - The yen weakens against most other G-10 and Asian currencies amid concerns over the Japanese government's possible pushback against Bank of Japan rate increases. A media report says the "draft of [Japan] PM Takaichi's basic policy guidelines is expected to show BOJ working closely with the government to confirm a positive cycle of wages and prices and sustainability," MUFG Bank's Michael Wan notes. This has spurred worries over the extent of potential government pushback against BOJ rate hikes, the senior currency analyst says in a research report. The dollar is 0.1% higher at 162.17 yen after earlier touching 162.40 yen, highest intraday level since 1986, FactSet data show. The Singapore dollar is 0.1% higher at 125.36 yen. (ronnie.harui@wsj.com)
0151 GMT - Malaysia's economic growth is likely to moderate in 2H as higher costs, trade uncertainty and geopolitical tensions weigh on business activity and consumer spending, MBSB Research says in a note. However, private consumption could continue to drive growth, backed by a healthy labor market, wage growth, government support and tourism spending, it says. Exports and investment should also stay supportive, helped by technology demand and infrastructure projects, it reckons. MBSB Research raises Malaysia's 2026 economic growth forecast to 4.5% from 4.2%, supported by stronger-than-expected 1H performance and resilient domestic demand. It also raises 2026 inflation estimate to 2.0% from 1.8%, citing elevated global oil prices. MBSB expects Bank Negara Malaysia to keep its policy rate at 2.75% through year-end, given steady domestic growth dynamics and well-contained inflation. (yingxian.wong@wsj.com)
0133 GMT - Japan's Ministry of Finance vigilance against speculative bearish yen bets warns of intervention risks as 162 versus the dollar is breached, says Vishnu Varathan, managing director and head of macro strategy, APAC at Mizuho Securities. The yen weakened to a fresh 40-year low against the dollar early Tuesday as it broke above 162. Japan Finance Minister Satsuki Katayama said the government stands ready to take appropriate action in the FX market that could be "decisive." Varathan says marginal yen bears should be braced for intervention to extract a price. (venkat.pr@wsj.com)