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Japan's preliminary S&P PMIs for September were below the August outcomes. Manufacturing printed at 48.4, versus 49.7 in August. The services print was 53.0, against a 53.1 prior. The composite fell to 51.1 versus 52.0 in August. 

• The manufacturing print is back to lows from March of this year. We did get close to 47.0 for the index in Q1 of 2024. The detail showed output down to 47.3 from 49.8 in August. New orders were also down in the month. The US manufacturing PMI fell for Sep as well, although remains at much higher outright levels (52.0).
• The chart below plots the manufacturing PMI and Japan IP growth (y/y). If we stay at current levels for the PMI it implies some downside risks for IP growth.
• On the services side for Japan, we remain at elevated levels. There remains a decent wedge between the manufacturing and services PMIs. 

Fig 1: Japan Manufacturing PMI & IP Growth Y/Y 

Source: S&P/Bloomberg Finance L.P./MNI  

The train finally ran out of steam and the stock market finally had a pullback after momentum stalled overnight. This morning US futures are trading slightly higher, E-minis(S&P) +0.05%, NQZ5 +0.05%. The JPY performance in the crosses continues to be pretty mixed with EUR/JPY trying to regain its upward momentum and the rest seem to be stalling or in NZD/JPY’s case moving lower.

• EUR/JPY - Overnight range 174.06 - 174.48, Asia is trading around 174.45. The pair has found decent buyers and is back up towards its recent highs looking to regain the momentum higher. Though with risk finally topping out, it looks an outlier. Is it leading or lagging ?
• GBP/JPY - Overnight 199.16 - 199.96, Asia trades around 199.70. This pair could not extend its break higher and has failed again above 200.00. Buyers need to reassert the momentum higher again soon or the probability of a deeper pullback increases, especially with risk potentially stalling. First support seen back towards the 198.00 area.
• NZD/JPY - Overnight range 86.36 - 86.69, Asia is currently dealing 86.50. This pair remains the outlier thanks to the poor NZ GDP data last week, while below 88.00/88.50 I continue to have a bias lower. Anyone looking for a vehicle to express a long JPY in the crosses should look to this pair, if cross JPY does move lower NZD/JPY should lead.
• CNH/JPY - Overnight range 20.7320 - 20.7929, Asia is currently trading around 20.7700. This pair has remained above its pivotal 20.30/20.40 support. The pair continues to trade sideways comfortably within its recent 20.40-21.00 range.

Fig 1 : GBP/JPY Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

The Australian Office of Financial Management (AOFM) will today sell A$1000mn of the 3.00% 21 November 2033 Bond, issue #TB166. The line was last sold on 8 August 2025 for A$1000mn. Several key factors will likely shape investor demand at today’s auction: 

• The bond’s outright yield is approximately the same as the previous auction and remains around 55bps below the peak reached in November 2024.
• Sentiment toward longer-dated global bonds has improved recently, which may add to demand.
• However, the 3/10 yield curve has flattened slightly since the last auction and is 35bps below its April high, the steepest level since 2021.
• Overall, pricing is expected to remain firm, underpinned by a stable yield profile and a more attractive curve backdrop.
• Results are due at 0200 BST / 1100 AEST.