Fed Minutes Hawkish, Dow Snaps Streak; USD/JPY Near 158
As of 2026-10-08 07:00 SGT
Key points
- FOMC minutes from the Sept 16-17 meeting showed unanimous support for the quarter-point hike to 3.75-4%, with most officials seeing another hike likely by year-end. The Dow fell 341 points (-0.66%) to 51,179.87, its first decline in five sessions
- The 10-year Treasury yield eased from a 24-year high after a strong auction but stays elevated at 5.277%. NY Fed data showed 1-year inflation expectations jumping to 3.9% (from 3.6%), the highest since May 2023
- Nikkei 225 closed at 70,036 (-0.92%); overnight futures in Osaka and Chicago point to a weaker Tokyo open
- USD/JPY is little changed near 158.00
- Gold broke below $4,100 to its lowest since August 5; WTI firmed to $88.92 in Asian trade
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 157.99 | -0.06% |
| EUR/USD | 1.1204 | -0.52% |
| Nikkei 225 (close) | 70,036 | -0.92% |
| Hang Seng (close) | 24,130 | +0.38% |
| Dow futures | 51,441 | -0.02% |
| S&P 500 futures | 7,854.00 | +0.02% |
| Nasdaq 100 futures | 31,436 | +0.11% |
| Gold futures | 4,130.80 | -0.24% |
| WTI crude | 88.92 | +0.72% |
| Bitcoin | 83,186 | -2.76% |
| US 10-yr yield | 5.277% | +0.8bp |
Foreign exchange — USD/JPY holds near 158
USD/JPY trades at 157.99, little changed (-0.06%), consistent with its overnight New York range of 158.05-158.15 as traders stayed focused on US yields. EUR/USD fell 0.52% to 1.1204 as France's fiscal and political risk continues to weigh on the single currency. USD/JPY should stay rangebound near 158.00 through the Tokyo session.
Equities — Dow snaps win streak, Tokyo futures point lower
New York equities retreated Wednesday as elevated oil prices stoked inflation concerns and the hawkish FOMC minutes pushed yields higher. The Dow fell 341 points (-0.66%) to 51,179.87, its first decline in five sessions, led lower by cyclicals including Caterpillar. The S&P 500 pulled back from record highs and the Nasdaq also slipped, though Dow, S&P 500 and Nasdaq 100 futures were little changed overnight. The Nikkei 225 closed at 70,036 (-0.92%), and futures fell further overnight — down 570 points to 69,790 in Osaka's night session and 1,025 points to 69,850 in Chicago — while the Tokyo Stock Exchange confirmed TOPIX will cut its constituent count from 1,634 to 986 from late October. Futures point to a weak open in Tokyo, tracking Wall Street's retreat.
Macro — Hawkish Fed minutes lift year-end hike odds
Minutes from the September 16-17 FOMC meeting, released Wednesday, showed all participants backed the quarter-point hike to 3.75-4%, with most judging another increase appropriate by year-end. CME FedWatch pricing shows an 80.6% probability the Fed holds in October (19.4% odds of a hike), while for December the hold probability drops to 21.7%, with 64.1% odds of a 25bp hike and 14.2% odds of a 50bp move. The NY Fed's survey showed one-year inflation expectations jumping to 3.9% from 3.6%, the highest since May 2023, while five-year expectations held at 3% and expected wage growth slipped to 2.6%. The 10-year Treasury yield eased from a 24-year high after a well-received auction but remains elevated at 5.277%. Tonight's jobless claims data is the next test for yields and the dollar.
Commodities — Gold breaks $4,100, oil firms in Asia
Gold fell on the hawkish Fed minutes, with spot prices breaking below $4,100 for the first time since August 5; gold futures last traded at $4,130.80 (-0.24%). WTI settled lower in New York near $88 on accelerated reserve releases but firmed in Asian trade to $88.92 (+0.72%). Oil's push back toward $89 keeps the Hormuz risk premium in focus into the Tokyo session.
Geopolitics — Strait of Hormuz tensions persist
US Central Command on Wednesday denied an Iranian Revolutionary Guard commander's claim of "full control" over the Strait of Hormuz, saying commercial and energy traffic — including roughly 20 million barrels of oil a day — continues to flow normally. Separately, a tanker was reportedly struck by multiple projectiles off Qatar's coast, with casualties reported, underscoring the widening risk to Gulf shipping. Iran said it would respond to a US proposal through intermediaries, citing the restoration of Gulf and Hormuz security among its conditions for ending hostilities. The standoff keeps a geopolitical premium embedded in oil heading into the Tokyo session.
Upcoming events
| Time (SGT) | Region | Event | Focus |
|---|---|---|---|
| 10/08 20:15 | UK | BOE Gov Bailey Speaks | Watch for any shift in policy tone |
| 10/08 20:30 | US | Unemployment Claims (forecast 200K) | A surprise either way could move yields and the dollar |
| 10/09 20:30 | CA | Employment Change (forecast 6.3K) | Key input for Bank of Canada expectations |
| 10/09 20:30 | CA | Unemployment Rate (forecast 6.5%) | Read alongside the jobs change |
| 10/09 22:00 | US | UoM Consumer Sentiment (forecast 47.5) | A gauge of household mood |
| 10/09 22:00 | US | UoM Inflation Expectations | An upside surprise would reinforce year-end hike bets |