JPY: USD/JPY Takes Another Dip, Approaches 158.00

In Tokyo morning trade, JGB futures are stronger, +27 compared to settlement levels, and near session bests.

• Japan’s monetary base fell 13.8% from a year earlier in July.
• (WSJ via BBG) “Treasury Secretary Scott Bessent wants the Fed to expand the facility, which has a $60 billion limit on how much any one counterparty can borrow. The request is seen as a test of the boundary between the central bank and the administration, with the Fed's independence from the White House conventionally understood to cover interest rates.”
• (Bloomberg) “The Bank of Japan officials need to signal that monetary policy can work alongside currency intervention to support the yen. Otherwise, traders will treat the latest burst of official buying as little more than an opportunity to reload carry trades. The BOJ’s reluctance to raise rates is frustrating for yen bulls. In theory, the policy board now has more hawks than doves. Yet only one member dissented when the central bank left rates unchanged last week. That hardly suggests officials are preparing to reinforce intervention with tighter policy.”
• Cash US tsys are ~1bp cheaper in today’s Asia-Pac session after yesterday’s solid rally.
• Cash JGBs are 1-3bps richer, with a flatter curve ahead of today’s 10-year auction. 

Bloomberg Finance LP

Below is a selection of key recent onshore media highlights for China ICYMI :

 Energy (Xinhua): China targets 50-pct non-fossil power generation by 2030

Bonds (Xinhua): Hong Kong launches 5-year RMB treasury bond futures.

AI Boom (Xinhua): Alibaba unveils latest AI model with enhanced coding, reasoning capabilities.

Share Buyback (China Sec Journal): Listed companies are launching share buyback plans, and special loans are being used to broaden their funding sources.

Imports (China Daily): Expanding imports of services aids trade growth.

Monetary Policy (China Daily): Interest rate, RRR cuts may be on table

Stock Connect (China Daily): CSRC pushes broader Stock Connect access

Two Speed Manufacturing (SCMP): China acknowledges ‘temperature gap’ between tech boom and traditional slump

MNI China Press Digest Aug 4: Demographics, Property, Bonds

The antipodeans are treading softly in a quiet Asian morning. All eyes are on USD/JPY which is continuing to try and bounce off its lows. For the moment the wind seems to have been taken out any USD bullishness and I suspect we trade in some ranges in the short-term as the market looks to absorb the heavy USD selling from the intervention.

• {AUDUSD Curncy} - 0.7008, +0.10%
• {NZDUSD Curncy} - 0.5865, -0.05%
• {AUDNZD Curncy} -  1.1980, +0.15%