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

0925 ET - The Bank of Japan answered U.S. Treasury Secretary Scott Bessent's call to raise rates, but the yen is still weaker, potentially creating a new concern for Bessent, who helped lead the first coordinated support for the yen since 1998 earlier this summer. "The result was that while the BoJ certainly did shift hawkish, it was not enough to meet market expectations ramped up by US Treasury Secretary Bessent who had talked up his 'asymmetric information' in his battle to strengthen the Yen," says Krishna Guha of Evercore ISI. "The BoJ's reticence to signal more aggressive policy will strain his efforts to strengthen the Japanese currency." The Japanese yen is off 1% against the U.S. Dollar at 157.73 JPY. (patrick.sheridan@wsj.com)

0909 ET - Prime Minister Carney's inaugural Canada Investment Summit this week drew some of the world's biggest capital managers, where they were pitched investment opportunities in shovel-ready developments. Any push to boost an underwhelming record on foreign direct investment is welcome, though National Bank's economists note the summit wasn't needed to spur foreign portfolio investment. Non-resident investors remain enthusiastic buyers of Canadian securities this year, confirmed by recent international securities transactions data, they note. Non-residents through July picked up a record year-to-date C$179 billion in Canadian portfolio securities, spurring a big swing in capital flows as Canadians have been net buyers of foreign securities but at a slower pace. (robb.stewart@wsj.com; @RobbMStewart)

0905 ET - Treasury yields edge higher and the curve flattens as markets price in a more hawkish Fed. Wednesday's hike boosts confidence in the Fed's commitment to fighting inflation. That makes shorter-term yields rise faster than long-term ones. The 10-year yield is at 4.973% and the two-year at 4.722%, both slightly higher than yesterday but below highs set earlier this week. The spread between the two benchmarks is on pace to settle at the narrowest level since March 2025. (paulo.trevisani@wsj.com; @ptrevisani)

0854 ET - U.K. consumers continue to demonstrate a strong willingness to spend, helping the economy even with elevated energy prices and the prospect of higher interest rates, Pantheon Macroeconomics' Rob Wood and Elliott Jordan-Doak say in a note. Some of August's 0.5% rise in retail sales volumes was flattered by earlier-than-usual promotions in June weighing on July's sales figures. "But that misses the big picture that households' spending has been strong for months now, despite the barrage of headwinds," the economists say. The trend in retail sales volumes has risen 2.4% month-to-month annualized over the past six months, they note. However, consumer spending is set to slow with climbing energy costs and higher mortgage rates ahead, they add. (edward.frankl@wsj.com)

0851 ET - U.K. Chancellor John Healy faces significantly less fiscal flexibility ahead of the autumn budget, Sanjay Raja and Maui Brennan at Deutsche Bank say in a note. They estimate fiscal headroom at just over 8.5 billion pounds, less than half the level at the Spring Statement, while headroom under the secondary debt rule has fallen to 17.2 billion pounds. Interest rates are higher than expected in the spring, adding roughly 13 billion pounds to government debt-interest costs by 2030-31, the economists say. Higher inflation from the energy shock will also add around 2 billion pounds to borrowing. Meanwhile lower immigration--which reduces the working-age population and tax base--could add a further 2 billion pounds, they add. (don.forbes@wsj.com)

0840 ET - The Federal Reserve's decision Wednesday to raise interest rates and signal further tightening leaves the euro at risk of falling further against the dollar in coming weeks, ING analysts say in a note. The euro could fall below $1.14 with risks extending to the $1.132 June lows if oil prices jump again and the Fed lifts rates further as soon as October, they say. However, the Fed is likely to raise rates again in December along with the European Central Bank, which should have a neutral impact on the exchange rate, they say. ING still expects the euro to rise to $1.16 by year-end if oil prices ease and risk sentiment improves. The euro falls 0.1% to $1.1462. (renae.dyer@wsj.com)

0709 ET - The dollar rises to a seven-week high against a basket of currencies as markets bet on further U.S. interest rate rises after the Federal Reserve lifted rates by 25 basis points on Wednesday. Fed officials penciled in at least one more rate rise by year-end. The Fed has "given the green light to markets to fully price in a hike in October if data and energy prices suggest so," ING's Francesco Pesole says in a note. The dollar is also helped by a weaker yen after the Bank of Japan lifted rates by 25bps Friday but its signals about future increases failed to meet aggressive expectations. The DXY dollar index rises to as high as 100.448. (renae.dyer@wsj.com)

0635 ET - The Debt Management Office's supply of U.K. government bonds, or gilts, is projected to rise in future after the Bank of England said it would no longer sell gilts directly to investors, Mizuho's Evelyne Gomez-Liechti says in a note. The BOE on Thursday said it would sell 20 billion pounds in gilt holdings, annually, to the DMO. "This removes the Bank as a direct seller into the long end and places the timing and maturity of eventual issuance with the DMO," Gomez-Liechti says. As a result, the DMO is expected to issue more bonds in future, she says. Thirty-year gilt yields rise 0.9 basis points to last trade at 5.745%, having hit a three-week low of 5.725% on Thursday, Tradeweb data show. (miriam.mukuru@wsj.com)

0616 ET - The Japanese yen extends its losses against the dollar after the Bank of Japan raised interest rates by 25 basis points to 1.25% but its signals about further tightening failed to meet lofty expectations. Governor Kazuo Ueda struck a careful balance in his press conference, HSBC economists say in a note. While Ueda indicated future rate rises, he had no specific pace in mind, they say. "We therefore maintain our baseline view that the BOJ will pause until the first quarter of 2027, when we expect a further 25 basis-point hike to lift the policy rate to 1.50%." The dollar rises 1.2% to a two-week high of 158.05 yen, according to LSEG. (renae.dyer@wsj.com)

0614 ET - The yield difference between short- and long-dated gilts drops after the Bank of England on Thursday announced they would no longer sell very long-dated gilts. This calmed concerns about heavy supply of long-maturity gilts, causing 30-year gilt yields to drop to a three-week low of 5.725% on Thursday. The gap between 2-year and 30-year gilt yields has narrowed to around 94 basis points following the announcement, from around 110 basis points beforehand, Tradeweb data show. (miriam.mukuru@wsj.com)

0602 ET - Although U.K. retail sales defied expectations in August, headwinds for consumers are mounting, Ellie Henderson at Investec Economics says in a note. "This is an encouraging report and suggests that the consumer is still willing to spend on retail items," she says. U.K. GDP came in stronger than expected in July, while PMIs also remain in expansionary territory. However, borrowing costs have jumped recently, driving up mortgage rates, Henderson says. Households could also face higher energy bills if the war in Iran continues to push up global energy prices, while Ofgem might continue raising the energy price cap. Bills could rise as much as 25%, she says. "This raises the question of how long the consumer can shrug off mounting cost pressures." (don.forbes@wsj.com)

0541 ET - The Japanese yen could weaken further after the Bank of Japan dampened expectations for more aggressive policy tightening, MUFG Bank's Derek Halpenny says in a note. The BOJ voted 7-2 to raise rates by 25 basis points to 1.25% on Friday. The split vote is weighing on the yen, along with the BOJ adjusting its statement to say real rates adjusted for inflation are low rather than negative, he says. BOJ Governor Kazuo Ueda's signals about potential rate rises are also probably not strong enough. "Hence, some giveback from recent yen strength makes sense to us over the short-term." The dollar rises to a two-week high of 157.90 yen, LSEG data show.