JPY: USD/JPY Holding Lower Post Earlier Q2 GDP Beat, Still Above Thursday Lows

Authorities stepped up regulations on local asset management companies (AMCs) by establishing operational red lines to focus efforts on their core business of managing non-performing assets, 21st Century Business Herald reported, citing a new rule released Tuesday by the National Financial Regulatory Administration. The rule prohibits local AMCs from providing channels for local government financing vehicles to incur additional hidden debts, while also sets a leverage limit of three times net assets to prevent institutions from excessive debt expansion, the newspaper said.

In Tokyo morning trade, JGB futures are weaker, -9 compared to settlement levels, on a local data-light day.

• Japan MOF To Auction Y400.0 Bln Of 40-Year Govt Bonds Jul 23.
• (Bloomberg) -- Japanese government bonds remain under pressure amid reports that the ruling coalition may fail to secure a majority in Sunday’s upper house election.
• Cash US tsys are flat to 1bp richer, with a flattening bias, in today’s Asia-Pac session after yesterday’s post-CPI sell-off.
• Cash JGBs are 1bp richer (40-year) to 2bps cheaper (futures-linked 7-year) across benchmarks. The benchmark 10-year yield is 1.1bp higher at 1.592% after setting a fresh cycle high of 1.598% yesterday.
• Swap rates are little changed. Swap spreads are tighter out to the 30-year.

China and Australia will jointly review their decade-old Free Trade Agreement to identify areas for improvement or expansion, while continuing to implement the existing agreement, according to a Memorandum of Understanding signed by Commerce Minister Wang Wentao and Foreign Affairs and Trade Secretary Jan Adams, Yicai.com reported. Both sides agreed to further liberalise and facilitate trade and investment and provide a higher level of institutional guarantee for economic and trade cooperation between the two countries, the newspaper said.