The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

0202 GMT - The Bank of Japan may turn more downbeat on Japan's economic activity while likely keeping rates unchanged at next week's meeting, Capital Economics' Marcel Thieliant says in commentary. While the central bank in June had "argued that downside risks to economic activity had diminished, we suspect that the renewed rise in crude oil prices since then will have dented the bank's optimism," the head of Asia-Pacific says. Meanwhile, the BOJ will "surely stick to its view that risks to inflation are tilted to the upside," Thieliant adds. Capital Economics expects the BOJ to raise the policy rate, currently at 1.0%, to 1.25% in October. (ronnie.harui@wsj.com)

0150 GMT - President Trump's decision to slap a 12.5% tariff on Australia on grounds that the country has inadequately enforced bans on goods produced by forced labor is "ludicrous," says David Bassanese, chief economist at Betashares. "This is obviously just a lame excuse to justify replacement tariffs for those struck down by the U.S. Supreme Court earlier this year," he adds. For the U.S., the tariff adds another source of price pressure just as the inflationary effects of earlier tariff increases were starting to ease, he says. Higher tariffs only increases the risk the U.S. Federal Reserve will raise interest rates later this year, he says. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0135 GMT - The Monetary Authority of Singapore is likely to stand pat on policy at next Monday's decision, Maybank analysts say in a FX research report. Singapore's inflation remains tame despite the oil shock. Also, the Singapore dollar nominal effective exchange rate has stayed resilient within the upper half of its band since the MAS's tightening in April, the analysts say. "For now, the situation in Singapore looks under control. MAS could also opt to retain the policy space to tighten in the future, should inflationary pressures exacerbate," they add. (ronnie.harui@wsj.com)

0133 GMT - Singapore's central bank is likely to tighten its monetary policy in its July statement due on Monday, says Citi Research's Wei Zheng Kit, who acknowledges the central bank's stance is at odds with consensus projections. While the city-state's June core consumer-price index growth was lower than expected, he points to a pick up in both core goods and core services inflation. Resurgent oil prices, core inflation persistently over 2% and higher inflation expectations could also support the case for tightening, he says. The economist sees a 70% probability of the central bank tightening its settings by steepening the policy band by 50bps. The Monetary Authority of Singapore uses the exchange rate as a policy tool for maintaining price stability, given the city-state's small and open economy.(megan.cheah@wsj.com)

0115 GMT - The U.S. dollar index remains in a solid uptrend, based on the weekly chart, StoneX's Matt Simpson says in commentary. Also, the daily chart shows the index's momentum is clearly turning higher and realigning with the broader bullish trend, the senior market analyst says. The 20- and 50-day exponential moving averages are "behaving like a support cloud," while the notable increase in trading volume on Thursday suggests strong bullish participation following the rebound from 20-day EMA, he says. The May high of 101.82 and the 102.00 level appear within sight for dollar bulls, Simpson adds. The U.S. dollar index is 0.1% lower at 101.372, LSEG data show.(ronnie.harui@wsj.com)

0111 GMT - Japan Flash PMI data suggests the economy continues to shrug off energy cost shock, says Marcel Thieliant, head of economics for Asia at Capital Economics. The report indicates that the economy remains resilient and still points to a sharp acceleration in inflation, he adds. The composite PMI edged up from 52.8 to a four-month high of 53.1 in July, which is consistent with above-trend GDP growth of around 1.5%, he says. That improvement is difficult to explain because both the services and the manufacturing PMI softened, Thieliant adds. It could be that Japan is finally starting to benefit from stronger demand for AI-related products, he says. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0015 GMT - Japanese stocks fall amid renewed concerns about higher energy costs. Technology, chip and airline stocks are leading declines. SoftBank Group drops 5.2%, Kioxia Holdings is 3.5% lower and Japan Airlines is down 3.3%. The dollar is at 163.84 yen, up from Y163.07 as of Thursday's Tokyo stock market close. Investors are closely watching developments in the Middle East and oil prices after Brent crude topped $100 a barrel for the first time in two months. The Nikkei Stock Average declines 2.3% to 64904.21. (kosaku.narioka@wsj.com; @kosakunarioka)

0011 GMT - The yen consolidates near a 40-year low against the dollar, and could weaken further, analysts say. "Growing expectations of further interest rate hikes in the United States have strengthened the US dollar," SMBC's Hirofumi Suzuki says in an email. "Heightened tensions in the Middle East have pushed up crude oil prices, placing selling pressure on the currencies of energy-importing countries. Within Asia, the Japanese yen and Thai baht are particularly vulnerable to this pressure," the chief FX strategist says. Also, the pace of the BOJ's tightening has been extremely gradual, Suzuki adds. The dollar is flat at 163.83 yen after touching 163.98 yen overnight, the highest intraday level since 1986, LSEG data show. (ronnie.harui@wsj.com)

0004 GMT - JGBs edge lower in the morning Tokyo session, tracking overnight price declines in U.S. Treasurys. Both JGBs and Treasurys tend to move in tandem. JGB prices may also be weighed down by the recent surge in crude oil prices and yen weakness, which typically leads to higher inflation in Japan and could prompt the BOJ to raise rates more quickly. "With crude oil prices approaching their recent peaks and the yen falling to fresh lows against the dollar, the [central] bank's concerns about upside risks to inflation won't have dissipated," says Marcel Thieliant, head of Asia-Pacific at Capital Economics, in commentary. The 10-year JGB yield is 2.5 bps higher at 2.795%. (ronnie.harui@wsj.com)

2346 GMT - Japanese stocks may fall due to renewed concerns about higher energy costs and following overnight stock declines on Wall Street. Nikkei futures are down 1.1% at 65505 on the SGX. The dollar is at 163.82 yen, up from Y163.07 as of Thursday's Tokyo stock market close. Investors are focusing on developments in the Middle East and oil prices after Brent crude topped $100 a barrel for the first time in two months. The Nikkei Stock Average rose 0.5% to 66422.60 on Thursday. (kosaku.narioka@wsj.com)Auckland International Airport handled fewer passengers in June than a year earlier and this will reinforce investor concerns about a sluggish recovery in traffic, says Citi. Auckland International Airport said domestic and international traffic fell around 4-5% on year, and are running 13-16% below pre-pandemic levels. "Rising Middle East tensions and elevated oil prices threaten further capacity cuts in first-half FY27, posing downside risks to consensus FY27 passenger forecasts and earnings," analyst Suraj Nebhani says. Weak traffic pressures other high-margin revenue streams, including retail and car parking. "Consequently, we see near-term downside to the share price heading into the August results and retain our neutral rating," Citi says. Still, it's upbeat about the medium-term outlook. Auckland International Airport is down 0.1% at NZ$8.56 today. (david.winning@wsj.com; @dwinningWSJ)

2231 GMT - Power generator Mercury NZ's strong end to FY26 means it will comfortably beat earnings guidance, Forsyth Barr says. Mercury NZ was able to expand profit margins in 4Q as a result of improved electricity trading. Conditions in the quarter, with hydro-generation volumes some 18% above average and wind-power output up 6% on year. Forsyth Barr expects Mercury NZ's Ebitdaf totaled NZ$1.069 billion in FY26. That is 2% above the power company's own guidance. "Looking ahead, further earnings growth will come from its new generation projects (Ngā Tamariki, Kaiwera Downs 2, and Kaiwaikawe), partially offset by falling electricity futures prices, its Manawa hedge contract repricing and, in the near term, expected El Niño impacts," analyst Andrew Harvey-Green says. Forsyth Barr retains a "neutral" call on the stock. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

July 23, 2026 22:02 ET (02:02 GMT)

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