Asia closed the quarter wide open — Tokyo sprinting while Seoul and the mainland nurse their worst quarterly drawdowns since the pandemic — and a yen repatriation squeeze is setting the tone into today's PCE print.
The Nikkei rose 2.1 per cent this morning, while the Kospi approached a 0.7 per cent monthly gain against a 19 per cent quarterly fall and the CSI 300 faced a 13 per cent quarterly decline, its largest since the pandemic lockdowns. Hang Seng was choppy, last up 0.43% in the final hour as traders digest Beijing's move — the government announced targeted credit and home-buyer support on 29 September, and the surveys turned positive the following morning. USD/JPY did the real damage overnight, sliding from around 157.5 to near 156.4 as Japanese investors and exporters sold foreign currency ahead of the fiscal half-year-end, with intervention chatter after Washington flagged concern about yen weakness keeping upside capped.
US futures are drifting higher into a data-heavy open — GDP's third estimate, core PCE, and ADP land at 8:30am, with Micron earnings and an Altman keynote adding AI-trade volatility after the bell. Bond yields easing into the print has been the main futures support story.
The risk: a hot PCE re-opens the hawkish-Fed trade just as USD/JPY sits on intervention watch — a hotter-than-expected core print plus fresh yen weakness could force a disorderly unwind of the carry-funded risk trade that's underpinned US equities all quarter.