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

0517 GMT - European government bonds are cheap at current yield levels and hence attractive for long-term investors, say J.P. Morgan rates strategists in a note. J.P. Morgan, however, refrains from positioning outright given the current uncertainty in the Middle East, elevated beta to U.S. and short momentum positioning. "We however retain a strong conviction on cross-market divergence given a higher bar for a rally in the U.S. and hold longs in 10-year Germany versus U.S." (emese.bartha@wsj.com)

0514 GMT - Spain's 4 billion euro July 2047 green bond syndication on Tuesday brought the country's bond funding completion to 80.9% of the annual target, the Spanish treasury says. The new bond was issued at a yield of 4.268%, with the transaction attracting an order book of 68 billion euros. The new green bond is Spain's second since the launch of its green bond program in 2021. (emese.bartha@wsj.com)

0508 GMT - The dollar is likely to settle into a range centered around 155-160 yen over the medium term, with a fluctuation band of about 5.0 yen on either side, says Sony Financial Group analyst Maki Ogawa. Despite recent market expectations, the pace of Bank of Japan rate hikes is likely to be gradual, given that sharp tightening could damage economic growth, as well as the central bank's balance sheet, she says. "The Fed is also expected to embark on rate hikes next year, making it unlikely that the U.S.-Japan interest-rate differential will narrow dramatically," she adds. The dollar was last trading at 153.40 yen. (megumi.fujikawa@wsj.com)

0507 GMT - High and--in many places--rising sovereign debt remains a key focus for fixed-income investors, Lazard Asset Management's Michael Weidner says in a note. "Governments must address this issue, given that, with few exceptions, they have failed to curb excessive deficits over the course of several decades," the co-head of global fixed income says. For developed economies, Lazard AM anticipates a moderate steepening of yield curves, partly because term premia and curve steepness are currently not particularly high. "In our view, short-term government bonds, in particular, will not lose their status as safe havens," he says. At the long end, however, investors should be selective, as sovereigns lacking fiscal discipline will have to offer higher yields to compensate for rising credit risks. (emese.bartha@wsj.com)

0506 GMT - Lazard Asset Management​ sees the recent rise in long-end government bond yields less as a selloff and more as a repricing of fiscal risks, "in other words, as a structural adjustment rather than a break in the trend," says ​Michael Weidner,​ co-head of global fixed income. Fundamentally, bonds currently offer attractive return profiles, particularly in real terms, he says. Despite high energy prices, neither current inflation trends nor the outlook point to strong upward pressure, suggesting that market participants can expect solid real yields​, he says. (emese.bartha@wsj.com)

0501 GMT - Bank of Japan's hasty rate increases could delay a recovery in consumption and other domestic demand, Crédit Agricole says in a note. Inadequate monetary and fiscal support could disrupt momentum in capital expenditures amid heightened geopolitical risks, the French bank says. Weak capex would leave Japan behind in the global competition for strategic investments and impair future supply capacity, the bank says. It is crucial for Japan to continue supporting the capex cycle while alleviating the negative impact of a cheap yen through foreign-exchange intervention and other economic measures, Crédit Agricole says.