Nikkei Rebounds, Dollar Steadies as Treasury Shock Lingers
As of 2026-08-20 12:00 SGT
Key points
- Asian equities rallied on the Treasury's surprise doubling of its long-bond buyback; the Nikkei 225 snapped a three-day losing streak, up as much as 900-plus points intraday before settling +0.75% at 65,814 in the afternoon session
- USD/JPY spiked into the low-to-mid 158s in early Tokyo trading after Wednesday's Treasury buyback announcement crushed yields, before steadying near 158.42 (+0.20%) by midday
- Gold futures held near $4,555.90 (+0.23%), comfortably above Wednesday's high of $4,428.50, though the advance has cooled from the pace seen earlier in the session
- The Hang Seng jumped 1.12% to 25,756 and mainland Chinese benchmarks also firmed, with SK Hynix shares surging more than 12% in Seoul after announcing a massive stock buyback, lifting sentiment across regional chipmakers
- Trump declared what he called unprecedented economic warfare on Iran, and the UAE announced a total halt to trade with Tehran, reviving geopolitical risk premia
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 158.42 | +0.20% |
| EUR/USD | 1.1682 | +0.00% |
| Nikkei 225 (intraday) | 65,814 | +0.75% |
| Hang Seng (intraday) | 25,756 | +1.12% |
| Dow futures | 53,554 | +0.04% |
| S&P 500 futures | 7,739.50 | +0.14% |
| Nasdaq 100 futures | 29,622 | +0.37% |
| Gold futures | 4,555.90 | +0.23% |
| WTI crude | 84.51 | +0.14% |
| Bitcoin | 69,124 | -0.24% |
| US 10-yr yield | 4.653% | -5.3bp |
Foreign exchange — Yen holds gains, dollar stabilizes near 158.40
USD/JPY spiked into the low-to-mid 158s in early Tokyo trading after Wednesday's surprise doubling of the Treasury's long-bond buyback program crushed long-end yields and triggered broad dollar selling. The pair has since steadied near 158.42 (+0.20% on the day), consistent with dollar consolidation rather than fresh selling. EUR/USD is little changed at 1.1682 (+0.00%), holding within Wednesday's 1.1674-1.1686 range. Into the European open, USD/JPY looks likely to stay contained in the low-to-mid 158s as the Treasury-driven dollar softness digests.
Equities — Nikkei snaps losing streak, chip bid lifts region wide
The Nikkei 225 snapped a three-day losing streak, rising as much as 900-plus points intraday before settling up 0.75% at 65,814 in the afternoon session, led by heavyweight SoftBank Group. Hong Kong's Hang Seng extended its advance to +1.12% at 25,756, while mainland benchmarks also firmed, with the Shanghai Composite up 0.28% and the ChiNext up 1.03% at the midday break. SK Hynix shares surged more than 12% in Seoul after announcing a massive stock buyback, with South Korea's Kospi also extending gains, fueling a broader bid across regional chipmakers. US futures were mixed-to-firm, with Dow futures +0.04%, S&P 500 futures +0.14% and Nasdaq 100 futures +0.37%. For the rest of the Asian session, dip-buying looks set to stay in control across regional equities.
Macro — Treasury shock reverberates
The US Treasury said Wednesday it will at least double the size of its liquidity-support buyback operations in the 10-to-20-year and 20-to-30-year sectors, lifting the cap from $2 billion to at least $4 billion per operation, running September 9 through November 4. The move came as US public debt topped $40 trillion for the first time. Last week's July FOMC minutes showed several officials saw a need for a rate hike if inflation fails to cool, a hawkish undertone still being digested by markets. Through tonight's NY session, the tug-of-war between Treasury-driven yield relief and hawkish Fed minutes should keep rates volatile.
Commodities — Gold holds highs, oil grinds higher
Gold futures are holding near $4,555.90 (+0.23%), comfortably above Wednesday's high of $4,428.50, though FXStreet notes the rally has cooled after touching an 11-week high near $4,528 in early Asian dealing as traders digest hawkish FOMC minutes alongside a dollar-debasement narrative. WTI crude is at $84.51 (+0.14%), holding within Wednesday's $81.50-$85.04 range. For the rest of the Asian session, gold looks set to consolidate near its highs while oil stays underpinned by Strait of Hormuz risk.
Geopolitics — Trump declares economic war on Iran
President Trump declared what he called unprecedented economic warfare on Iran and threatened tremendous consequences for its backers. The UAE, one of Iran's most important trading partners, announced a total halt to trade with Tehran. The escalation keeps a geopolitical risk premium embedded in oil and gold prices. Through tonight's NY session, Iran-related headlines look likely to remain a source of intraday volatility.
Upcoming events
| Time (SGT) | Region | Event | Note |
|---|---|---|---|
| 08/20 20:30 | US | Philly Fed Manufacturing Index (forecast 24.1) | Gauge of manufacturing momentum |
| 08/20 20:30 | US | Unemployment Claims (forecast 210K) | Read on labor-market resilience |
| 08/21 14:00 | UK | Retail Sales m/m (forecast -0.5%) | Signal on consumer spending momentum |
| 08/21 15:30 | EU | German Flash Manufacturing PMI (forecast 52.1) | Early read on eurozone growth |
| 08/21 16:30 | UK | Flash Services PMI (forecast 51.8) | Gauge of UK growth momentum |