Asia opens mixed as an oil-driven relief rally collides with a violent yen bid, leaving the desk cautious into a data-heavy US week that closes with payrolls.
Nikkei futures point to a lower Monday open, both Chicago and Osaka contracts running below the prior 64,362 close, as the region trades mixed after Washington shelved a planned Iran strike and crude eased. Hang Seng closed firmer near 25,884, still digesting a Fed hold that flagged sticky inflation, a sharp back-up in long-end Treasury yields, and mixed US tech earnings that have investors second-guessing AI-capex payback; CSI 300 stays rangebound with China PMI due Friday. Kospi remains the highest-beta read-through, whipsawing on Samsung and SK Hynix headlines after last week's chip-stock volatility. The real story is FX: USD/JPY cratered toward the high-157s from a 160-plus high, its sharpest slide in weeks, on reported US Treasury yen purchases alongside a BoJ hold that still leaves further hikes on the table this year. USD/CNH stays pinned near 7.17-7.20, PBOC fixing the only real anchor.
Into the US, futures are firmer with oil lower, but the setup is a coin-flip: the Fed just held while citing inflation risk, and the week is front-loaded with labor data culminating in Friday's July payrolls, consensus near 87,500 versus June's 57,000 with unemployment seen ticking to 4.3%. Earnings keep the AI-spend debate live.
The risk: a further leg lower in USD/JPY reopens the carry-unwind trade that hammered global risk in August 2024 — watch for BoJ jawboning or a break of the 157 handle, since a disorderly yen squeeze, not the jobs print, is what turns this mixed tape risk-off fast.