2020 ET - Japanese stocks are lower in early trade as uncertainty over the Middle East conflict continues. Electronics and technology stocks are leading the declines. Kioxia Holdings is down 7.0% and SoftBank Group is 4.6% lower. The dollar is at 161.47 yen, down from Y162.25 as of Thursday's Tokyo stock market close, following disappointing U.S. jobs data. Investors are closely watching any progress in U.S.-Iran peace talks and crude oil prices. The Nikkei Stock Average is down 1.0% at 68065.34. (kosaku.narioka@wsj.com; @kosakunarioka)
2018 ET - The yen weakens against most other G-10 and Asian currencies on a possible technical correction. The yen strengthened notably overnight as weaker-than-expected U.S. nonfarm payrolls report prompted traders to scale back Fed rate-hike expectations and unwind some long dollar positions, particularly against the yen. However, "with U.S. markets closed for the Independence day celebrations, currency liquidity will be thin, an ideal time [for intervention] to have a large impact on the market," CBA's Joseph Capurso says in a research report. "The MoF has surprised markets with interventions during public holidays," the head of Foreign Exchange, International & Geoeconomics notes. The dollar edges 0.2% higher to 161.48 yen, and the euro is 0.1% higher at 184.44 yen, FactSet data show. (ronnie.harui@wsj.com)
2015 ET - The JGB yield curve steepens in early Tokyo trade amid some headwinds. The JGB curve has bear-steepened sharply this week on "concerns of a behind-the-curve BoJ and worries about [Japan's] fiscal outlook," two analysts at Barclays Securities Japan say in a research report. Hence, market participants are likely to continue waiting for details on fiscal spending, the analysts say, noting a possible Cabinet decision on the government's draft 'Basic Policy on Economic and Fiscal Management and Reform'. The five-year JGB yield is down 1 bp at 1.920%; the 10-year yield is up 2 bps at 2.800% after earlier touching 2.810%, its highest intraday level since October 1996, according to data provider Quick. (ronnie.harui@wsj.com)
1948 ET - Japanese stocks may remain rangebound as uncertainty over the Middle East conflict continues. Nikkei futures are flat at 68675 on the SGX. The dollar is at 161.31 yen, down from Y162.25 as of Thursday's Tokyo stock market close, following disappointing U.S. jobs data. Investors are focusing on any progress in U.S.-Iran peace talks and crude oil prices. The Nikkei Stock Average fell 2.5% to 68733.15 on Thursday. (kosaku.narioka@wsj.com)
1905 ET - Reports that Japan's Ministry of Finance is abandoning its custom of telegraphing intervention risks and may instead enter the FX market to surprise market participants, has traders on edge. The idea here is the prospect of surprise intervention may make speculators think twice before adding to bearish JPY positions, says CBA economist Joe Capurso. With U.S. markets closed for Independence Day celebrations, currency liquidity will be thin--an ideal time to have a large effect on the market, he adds. The MoF has surprised markets with interventions during public holidays before. (james.glynn@wsj.com; @JamesGlynnWSJ)
1856 ET - JPY is the strongest G10 currency, with USD/JPY falling from above 162 to around 161.0, amid reports Japanese authorities may be shifting away from calibrated jawboning toward more surprise-based intervention tactics, says NAB in a note to clients. The issue for JPY remains that fundamentals still point to weakness--deeply negative real yields, slow BoJ normalization and continuing JGB purchases--but thin U.S. holiday liquidity raises the tactical risk of intervention, NAB adds. (james.glynn@wsj.com; @JamesGlynnWSJ)
1844 ET - USD/JPY is lower, weighed down by suspected intervention to support the yen that kicked in around five hours ahead of news of cooler-than-expected U.S. employment data, says Tony Sycamore, market analyst at IG Markets. He expects another round of intervention over the next one or two trading sessions, which would likely secure Tuesday's 162.83 print as a short-term top with scope to hold for the next six to eight weeks. Whether it becomes a more meaningful medium-term high will ultimately depend on incoming U.S. data and, to some degree, developments in the Japanese government bond market, he adds. (james.glynn@wsj.com; @JamesGlynnWSJ)
1505 ET - Treasury yields recover ground lost after disappointing labor data and end the week higher. The BLS puts June job creation at 57,000, about half as many as expected. The surprise reduces odds of Fed interest rate increases priced into fed fund futures, although at least one hike this year remains the highest probability, according to CME. Inflation expectations priced inswaps trade match the Fed's 2% target, according to LSEG. Bond markets close earlier and won't reopen until Monday. Next week will bring June services PMI and existing home sales. The 10-year yield rises 0.105 percentage point this week to 4.447%. The two-year increases 0.043 p.p. to 4.130%. (paulo.trevisani@wsj.com; @ptrevisani)
1425 ET - The U.S. decision not to renew the USMCA adds a degree of uncertainty as the three partners enter a phase of annual reviews, but hasn't changed things for manufacturers already in Mexico, says Jorge Gonzalez Henrichsen, co-CEO of The Nearshore Company. "Clients are like, I can't control that variable so I will just keep going," he says. But firms thinking of setting up shop in Mexico give the sense that they're moving slower. Those companies consider other options such as other countries or staying in the U.S. and moving more toward automation. Some expect the uncertainty to go on for years and are starting to move forward anyway, "but others are still on a wait-and-see mode," Gonzalez Henrichsen adds. (anthony.harrup@wsj.com)
1347 ET - Bitcoin had a tough first half of the year, dropping 35% since Jan. 1 to find a recent multi-year low of around $58,000. But bitcoin and other cryptocurrencies are off to a hot start in July, jumping back up to over $61,600 after the payrolls report showed less jobs added than previously anticipated by surveyed analysts. Cryptocurrency research firm 21shares says that they are maintaining "cautious optimism" on bitcoin's prospects in the second half of 2026, although the factors that have been pressuring prices are not expected to disappear. "The number of wallets holding BTC continues to grow," says the firm in a note. "Our year-end base case is a recovery toward $100,000 rather than a breakout to new all-time highs." (kirk.maltais@wsj.com)
1311 ET - Investor sentiment improved after the Bureau of Labor Statistics released its latest jobs report, which showed 57,000 jobs being added in June. That's roughly half of what analysts surveyed by The Wall Street Journal ahead of the report expected, but investors became more hopeful that interest rate hikes can be avoided, at least for now. But it isn't expected to be a meaningful long-term change in the macroeconomic landscape, says Jonas Goltermann of Capital Economics in a note. "The data released today don't change our view that the market is underestimating the chances of the FOMC returning to rate hikes later this year," says Goltermann, forecasting continued tightening in the labor market. (kirk.maltais@wsj.com)
1132 ET - Even with bitcoin pushing over the $60,000 mark, outflows from bitcoin ETFs are continuing. According to data from CoinGlass, net ETF outflows actually rose from the prior day yesterday, up to $296 million from $222.6 million previously. But sentiment is turning warmer for bitcoin and cryptocurrencies in general as 3Q begins. CoinMarketCap's "Fear and Greed Index" poked out from "extreme fear", rising to a reading of 22 out-of 100, which is in "fear" territory. "The first two days of 3Q tell a different story," says CoinMarketCap in a separate note. Bitcoin is up 2.5% to $61,592, ethereum rises 5.1% to $1,699, XRP climbs 3.1% to $1.09, and solana advances 4.3% to $80.65. (kirk.maltais@wsj.com)