SOUTH KOREA: Country Wrap: More Cash Handouts to Come

• China plans to subsidize interest payments on eligible personal consumer loans from Sept. 2025 to Aug. 2026, according to a statement from the Ministry of Finance.   Subsidy applies to loans under 50,000 yuan for consumption, and designated big-ticket items over 50,000 yuan — including autos, education, and healthcare.  China’s consumer loan interest subsidy program is expected to support a recovery in lending, especially for operating loans in the consumer services sector, while benefiting major banks and enhancing their market share, according to analysts from brokerages including China Merchants Securities.  (source BBG)
• resident Xi Jinping and Brazilian President Luiz Inacio Lula da Silva have expressed their opposition to unilateralism and protectionism, and pledged to promote the greater development of bilateral ties.  In a phone conversation between the two heads of state on Tuesday, Xi told Lula that China is ready to work with Brazil to set an example of unity and self-reliance among major countries of the Global South, and to jointly build a more just world and a more sustainable planet.  (source China Daily)
• China and Hong Kong markets are also higher. The CSI 300 last around +0.90%.  The HSI is up around +1.90%, with the tech sub index +2.35%.
• Yuan Reference Rate at 7.1350 Per USD; Estimate 7.1768
• Ten year government bond yields are modestly lower with the 10-year at 1.72%

JGB futures are weaker and at session lows, -26 compared to settlement levels, after today’s disappointing 5-year auction.

• Today’s 5-year JGB auction showed poor signals on demand. The low price came in line with expectations at 99.72, and the bid-to-cover ratio declined to 2.9616x from 3.5411x. Meanwhile the tail widened slightly to 0.03 from 0.02. The result aligns with the poor demand signals seen at this month’s 10-year auction. With yields higher and the 2s/5s curve steeper than last month, today’s outcome represents a deterioration in overall demand conditions.
• "JAPAN'S AKAZAWA: NOT BAD IF TRUMP EXEC ORDER COMES BY MID SEPT, US CAN'T GET INVESTMENT HELP IF PROMISES NOT KEPT. JAPAN COULD INCREASE ACTUAL US INVESTMENT PERCENTAGE, 1-2%, INVESTMENT FOLLOWS PAST CASES, COULD BE HIGHER" - BBG
• Cash US tsys are slightly mixed, with a flattening bias, in today's Asia-Pac session after yesterday's twist-steepener.
• Cash JGBs are showing a twist-flattening, with benchmark yields 3bps higher to 2bps lower. The benchmark 5-year yield is 2.6bps higher at 1.069% versus the cycle high of 1.19%.
• Swaps rates flat to 1bp higher, with swap spreads tighter out to the 20-year.
• Tomorrow, the local calendar will be empty ahead of Q2 GDP on Friday.