Japan yields hit 29-year high; Nikkei rebounds, claims due
As of 2026-07-09 17:00 SGT
Key points
- Japan's Nikkei 225 closed up 1.38% to 67,744, breaking a four-session losing streak, led by AI and semiconductor stocks; the index briefly surged over 1,600 points in the morning before paring gains
- Japan's 10-year JGB yield climbed to 2.87%, the highest level since May 1997; Japan's chief cabinet secretary said the government is watching with "a very high sense of urgency"
- USD/JPY held at 162.40 (-0.10%), within the prior session's 162.24–162.61 range, as intervention risk continues to cap topside
- US forces struck Iran for a second consecutive day, targeting southern coastal sites and railroad bridges near Mashhad; Iran's health ministry reported 14 deaths and 78 injuries across both days; the Strait of Hormuz is near-halted
- Tonight at 20:30 SGT: US initial jobless claims (forecast 218K), the first significant US data point since the hawkish FOMC minutes were released overnight
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 162.40 | -0.10% |
| EUR/USD | 1.1430 | +0.07% |
| Nikkei 225 (close) | 67,744 | +1.38% |
| Hang Seng (close) | 24,030 | -0.70% |
| Dow futures | 52,644 | +0.04% |
| S&P 500 futures | 7,542.50 | +0.18% |
| Nasdaq 100 futures | 29,646 | +0.60% |
| Gold futures | 4,119.30 | +0.90% |
| WTI crude | 72.86 | -0.90% |
| Bitcoin | 62,804 | +0.92% |
| US 10-yr yield | 4.569% | +4.0bp |
Foreign exchange — Intervention risk holds USD/JPY in narrow range
USD/JPY held near 162.40 in the European session, trading within the prior session's 162.24–162.61 range. The structural case for yen weakness remains intact — the wide US-Japan rate differential continues to support carry flows — but intervention risk is keeping the pair below prior highs, with the 162.70 area serving as a key resistance level in early European trade. EUR/USD edged up to 1.1430, caught between its 100-hour and 200-hour moving averages, with the pair finding limited traction despite Middle East tensions weighing on the dollar. FOMC minutes released overnight confirmed a minority of officials favored a June rate increase, maintaining the dollar's underlying support. After the NY open, the US initial claims print will be decisive: a below-forecast reading would reinforce the hawkish FOMC tone and risk a renewed push toward 162.61 and above.
Equities — Nikkei four-session slide reversed on AI bid; Hang Seng slips
The Nikkei 225 closed 924 points higher at 67,744, ending a four-session losing streak. The advance was concentrated in AI and semiconductor-linked names in a winner-take-all dynamic, while cyclicals underperformed. The rally was front-loaded — the index briefly surged more than 1,600 points in the morning — before paring gains as long-bond yields continued to rise. In Hong Kong, the Hang Seng closed at 24,030 (-0.70%), as weaker-than-expected China CPI (+1.0% YoY in June) weighed on overall sentiment, though semiconductor stocks outperformed sharply. Shanghai's composite rose around 1.65%. US equity futures are pointing modestly higher, with Nasdaq 100 futures up 0.60% — tech continuing to lead over industrials. After the NY open, tonight's jobless claims will test whether the AI-driven risk-on bid can sustain its momentum ahead of Friday's Canadian employment report.
Macro — FOMC minutes flag AI inflation risk; Japan's JGB yield at 29-year high
FOMC minutes from the June meeting, released overnight, showed a minority of officials favored raising rates at that meeting and that most officials flagged AI investment-driven demand as a potential new source of inflation. The US 10-year yield ticked up 4.0bp to 4.569%. In Japan, the 10-year JGB yield rose to 2.87%, the highest since May 1997, with Japan's chief cabinet secretary saying the government is monitoring developments with urgency. The Bank of Japan's quarterly Sakura report maintained the economic assessment for all nine regions unchanged. China's June CPI came in at +1.0% YoY, below consensus, while PPI rose to a near four-year high — pointing to cost pressure on manufacturers that has yet to be fully passed through. Fast Retailing raised its full-year operating profit guidance to ¥730 billion (from ¥700 billion), driven by double-digit growth in overseas Uniqlo. Tonight's US initial claims (forecast 218K) at 20:30 SGT are the key near-term gauge of labor market resilience, with a strong print likely to extend the yield and dollar bid.
Commodities — WTI retreats sharply from prior high; gold near prior peak
WTI crude slipped to $72.86 (-0.90%), well below the prior session's high of $76.08, after Trump said Iran wants to make a deal, easing part of the Hormuz risk premium. Despite near-halted Strait of Hormuz shipping traffic and renewed uncertainty over Saudi Arabia's Persian Gulf crude exports, supply risk is being partially discounted. Gold futures recovered to $4,119.30 (+0.90%), just below the prior high of $4,120.30, supported by safe-haven demand and lingering uncertainty over the Fed's rate path. Into the NY session, any fresh escalation in US-Iran military headlines would be the main catalyst for a WTI spike and a renewed gold rally.
Geopolitics — Day two of US strikes on Iran; Hormuz near-halted as European allies distance
US Central Command conducted a second consecutive round of strikes on Iran on 9 July (early morning Japan time), hitting multiple sites along Iran's southern coastal provinces and two railway bridges on routes near Mashhad in eastern Iran. Iran's health ministry confirmed 14 deaths and 78 injuries across both days of strikes, with 47 still hospitalized. The IRGC ground forces commander said Iran would seek to respond with "pre-emptive" action. Satellite navigation interference has added to disruption in the Strait of Hormuz, where commercial shipping has nearly ground to a halt; Saudi Arabia's plans to resume Persian Gulf crude exports face renewed uncertainty. At the NATO summit in Ankara, Turkey, Trump declared the Iran ceasefire "over" while praising allied unity; European partners — including France and the UK — are increasingly distancing themselves from Washington's Iran policy, with French President Macron and Japan's Prime Minister reaffirming their commitment to freedom of navigation in the Strait. Into the NY session, any new headline from the Strait or IRGC counter-strike will quickly re-price crude and safe-haven assets; watch the 162.70 level in USD/JPY as the key tension indicator.
Upcoming events
| Time (SGT) | Region | Event | Impact |
|---|---|---|---|
| 07/09 20:30 | US | Unemployment Claims (forecast 218K) | Medium |
| 07/10 20:30 | CA | Employment Change (forecast 11.2K) | High |
| 07/10 20:30 | CA | Unemployment Rate (forecast 6.6%) | High |