USD/JPY tops 162, Nasdaq futures +1.8%; China SLBM test eyed
As of 2026-07-07 00:00 SGT
Key points
- USD/JPY has climbed to 162.29, breaking above the previous session's high of 161.49 — a level last seen roughly 40 years ago — as the wide yield differential between the US and Japan continues to attract dollar buying
- Nasdaq 100 futures are up 1.78% in mid-session New York trading, with semiconductor stocks leading the advance; the Dow briefly crossed 53,000 for the first time during intraday trading
- China's People's Liberation Army conducted a submarine-launched ballistic missile (SLBM) test in the Pacific Ocean, with the notification zone encompassing Japan's EEZ; the test drew sharp condemnation from Taiwan and renewed geopolitical concern across the region
- Fed Governor Waller said risks have shifted toward inflation, the labor market is stabilizing, and forward guidance remains a "valuable tool" — signals that reinforce the Fed's restrictive stance ahead of Wednesday's FOMC meeting minutes
- US June ISM Non-Manufacturing PMI came in at 54.0, meeting estimates and confirming continued service-sector expansion, while the S&P Global composite PMI final reading was revised slightly down to 51.9 from 52.2
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 162.29 | +0.59% |
| EUR/USD | 1.1429 | -0.10% |
| Nikkei 225 (close) | 69,738 | -0.01% |
| Hang Seng (close) | 23,616 | +1.14% |
| Dow futures | 53,189 | +0.01% |
| S&P 500 futures | 7,587.75 | +0.79% |
| Nasdaq 100 futures | 30,081 | +1.78% |
| Gold futures | 4,159.30 | +0.81% |
| WTI crude | 68.83 | +0.20% |
| Bitcoin | 63,413 | -0.28% |
| US 10-yr yield | 4.483% | -0.2bp |
Foreign exchange — USD/JPY breaks 162 as yen intervention watch intensifies
USD/JPY has advanced to 162.29 in New York mid-session trading, well above the previous session's range of 160.62–161.49, reaching its highest level in roughly 40 years. Despite Japan's 10-year JGB yield touching a near-29-year high of 2.830%, the absolute spread between US and Japanese rates remains wide enough to keep yen sellers in control. EUR/USD slipped to 1.1429 after US PMI data confirmed healthy service-sector activity, capping any dollar pullback. Japanese authorities are monitoring the yen's decline closely, but no intervention has been confirmed. Through the rest of the New York session, USD/JPY is likely to hold near 162, with intervention-watch risk keeping a lid on further advances into the Tokyo open.
Equities — Chip stocks lead US futures higher mid-session; Hang Seng extends three-day run
European equity markets closed mixed — Germany's DAX edged up 0.08%, while the FTSE 100 fell 0.28%, France's CAC 40 dropped 0.33%, and the STOXX 600 lost 0.38%, pressured by residual uncertainty over ECB policy. In New York, Nasdaq 100 futures are up 1.78%, driven by a broad-based bid in semiconductor names after last week's pullback. The Dow intraday touched 53,000 for the first time before settling back. Hong Kong's Hang Seng Index closed at 23,616 (+1.14%), its third consecutive gain, with northbound flows exceeding HKD 20 billion. The Nikkei 225 closed flat at 69,738. Asian equities are poised to open firmer at the Tokyo open, tracking the US futures advance into semiconductor-driven territory.
Macro — Fed's Waller flags inflation risk as Japan bond yields hit 29-year high
Fed Governor Waller, speaking at a conference in Rome, stated that the risk balance has "shifted toward inflation," that the labor market appears to be stabilizing, and that forward guidance remains a valuable policy tool when applied flexibly. He also affirmed policymakers' commitment to the 2% inflation target. ECB Governing Council member Wunsch said the inflationary shock from the Iran conflict "seems to have disappeared" with limited second-round effects, but noted further tightening cannot be ruled out. ECB Executive Board member Schnabel struck a more cautious note, saying the current price shock "cannot simply be looked through." June ISM Non-Manufacturing came in at 54.0 (meeting estimates); the S&P Global composite PMI final reading was 51.9, down from 52.2 preliminary. Meanwhile, Japan's benchmark JGB yield briefly touched 2.830%, its highest level in roughly 29 years, driven by concerns over fiscal risk and a slower-than-expected pace of Bank of Japan rate hikes.
Commodities — WTI steady above $68 as Saudi price cuts offset Middle East tension
WTI crude is at $68.83 (+0.20%), just above the previous session's high of $68.80, as two forces offset each other: Saudi Arabia's decision to cut official selling prices to Asian customers and the OPEC+ agreement to raise output targets are pressing on the downside, while residual uncertainty around the Strait of Hormuz provides a price floor. Gold futures at $4,159.30 (+0.81%) continue to hold near their two-week high, benefiting from geopolitical demand and a modest dip in US yields, despite the broadly firmer dollar acting as a headwind.
Geopolitics — China SLBM test in Pacific; NATO summit in Turkey amid escalating Russia-Ukraine strikes
China's PLA conducted a submarine-launched ballistic missile test in the Pacific, with the designated notification zone overlapping Japan's exclusive economic zone; the missiles reportedly landed outside Japan's EEZ. Analysts described the test as a demonstration of China's ability to strike the US mainland with sea-based nuclear forces, and warned that Japan may face a "much tougher" Chinese posture going forward. Taiwan's government condemned the test, stating that "China is destroying regional peace." Separately, Russia launched its second major attack on Kyiv in less than a week, as NATO leaders gathered in Istanbul for a summit. Trump said resolving the Russia-Ukraine conflict would happen "much faster than people think," citing strong interest from both Putin and Zelensky.
Upcoming events
| Time (SGT) | Region | Event | What to watch |
|---|---|---|---|
| 07/07 18:30 | UK | BOE Gov Bailey Speaks | Tone on further rate hikes given Iran-related service-sector disruption |
| 07/08 10:00 | NZ | Official Cash Rate (forecast 2.50%) | Whether RBNZ cuts by 25bp and signals its terminal rate path |
| 07/09 02:00 | US | FOMC Meeting Minutes | Degree of hawkish dissent and discussion of the inflation risk shift |
| 07/09 20:30 | US | Unemployment Claims (forecast 218K) | Confirmation of labor market stabilization cited by Waller |
| 07/10 20:30 | CA | Employment Change (forecast 10.0K) | Recovery pace after June's Iran-related uncertainty |