JPY: FinMin Delivers FX Jawboning, But Still Appears Short Of Taking Action
Headlines have crossed from the Japan FinMin, with the latest round of verbal jawboning on FX. USD/JPY is drifting a little lower in response, last in the 153.70/75 region. At this stage the level of concern around FX weakness is edging up (as spot yen continues to weaken), but we appear to remain short of rhetoric that suggests intervention risks are a lot stronger.
- Notably: "JAPAN FINMIN KATAYAMA: CLOSELY WATCHING FX MOVES WITH A HIGH SENSE OF URGENCY - [RTRS], along with
- "JAPAN FINMIN KATAYAMA: RECENTLY SEEING ONE-SIDED, RAPID MOVES, JAPAN FINMIN KATAYAMA: IMPORTANT FOR CURRENCIES TO MOVE IN STABLE MANNER REFLECTING FUNDAMENTALS" RTRS"
- These comments are still broadly in line with recent rhetoric around FX.
- There appear short of previous commentary which has suggested heightened intervention risks: Examples include, “We can’t tolerate speculative moves.”
- “We will take appropriate action if needed.” or “We won’t rule out any options/means to combat excessive movements.” (via BBG).
- Recent highs in the pair rest at 154.45, which came yesterday in the aftermath of the indifferent BoJ hold (with no fresh guidance on hike timing).
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
CRYPTO: Ethereum - Bounces, Technically $4300-$4500 To Be Faded First Up
Ethereum had a range overnight of $4093.19 - $4208.98, Asia is trading around $4152, -1.05%. Ethereum had a decent bounce after triggering stop losses sub $4000 last week. Having broken big support around $4100, technically rallies should now be faded initially. The first sell zone is now back towards the $4300/$4500 area.
- Menthor Q on X: "Crypto asset flows. "Digital asset investment products saw US$812m in outflows last week, though YTD inflows remain robust at US$39.6bn, close to last year’s record ... Bitcoin (-US$719m) and Ethereum (-US$409m) faced pressure, while Solana (+US$291m) attracted strong inflows.”
- Milk Road on X: “For a decade, crypto has moved in 2yr up / 2yr down cycles, pointing to a 2025 peak. But the data just shifted. PMI, liquidity, and analysts all say the cycle hasn’t ended, it’s been extended. The top now looks more like 2026… or later”
- “FTX will release $1.6B in stablecoins to creditors today. That’s $1.6B in fresh liquidity about to hit the crypto markets. Fresh powder is on the way.”
Fig 1: Ethereum spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
ASIA: Outflows dominate again
- South Korea: Recorded outflows of -$114m yesterday, bringing the 5-day total to -$359m. 2025 to date flows are -$805m. The 5-day average is -$72m, the 20-day average is +$250m and the 100-day average of +$111m.
- Taiwan: Had inflows of +$249m yesterday, with total outflows of -$807 m over the past 5 days. YTD flows are positive at +$7,434m. The 5-day average is -$161m, the 20-day average of +$385m and the 100-day average of +$219m.
- India: Had outflows of -$153m as of the 29th, with total outflows of -$1,702m over the past 5 days. YTD flows are negative -$17,000m. The 5-day average is -$340m, the 20-day average of -$135m and the 100-day average of -$53m.
- Indonesia: Had outflows of -$102m yesterday, with total outflows of -$125m over the prior five days. YTD flows are negative -$3,307m. The 5-day average is -$25m, the 20-day average -$5m and the 100-day average -$2m.
- Thailand: Recorded outflows of -$11m as of the 29th, with outflows totaling -$1m over the past 5 days. YTD flows are negative at -$2,764m. The 5-day average is $0m, the 20-day average of -$13m and the 100-day average of -$11m.
- Malaysia: Recorded outflows of -$13m yesterday, totaling -$79m over the past 5 days. YTD flows are negative at -$3,743m. The 5-day average is -$16m, the 20-day average of -$5m and the 100-day average of -$12m.
- Philippines: Recorded outflows of -$35m yesterday, with net outflows of -$48m over the past 5 days. YTD flows are negative at -$651m. The 5-day average is -$10m, the 20-day average of +$3m the 100-day average of -$4m.
AUSSIE BONDS: ACGB Dec-34 Supply Well Absorbed But With Less Demand
Expectations of strong pricing at auctions were confirmed, with the latest ACGB Dec-34 supply achieving a weighted average yield that printed 0.40bp through prevailing mids (per Yieldbroker). However, the cover ratio decreased to 2.1033x from 3.1708x.
- As highlighted in our auction preview, the current outright yield was 20bps higher than at the previous auction, but around 40bps below the late-2024 peak.
- The 3s/10s yield curve was around 10-15bps flatter than the level at the last auction and sat 40bps below its April peak — the steepest level since late 2021.
- The auction did come amid improving sentiment toward long-term global bonds, with the line’s inclusion in the XM basket also likely enhancing its relevance for benchmark-driven accounts.
- The ACGB Dec-34 cash line and the XM futures contract are slightly richer in post-auction dealings.
