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

1036 GMT - The effects of currency intervention don't usually last long, says former Bank of Japan Gov. Haruhiko Kuroda, who has also served as the nation's top currency diplomat. "It's hard for intervention to stay effective unless there's something big enough to flip market sentiment and expectations upside down," Kuroda says. Central banks can adjust policy if foreign exchange rate fluctuations affect price trends, but they typically avoid coordinating with currency authorities to safeguard their independence from government influence, he adds. (megumi.fujikawa@wsj.com)

1024 GMT - The cost of insuring euro credit against default declines as markets are cautiously optimistic ahead of the U.S.-China summit this week. Investors hope the summit will lead to improved U.S.-China trade relations while they continue to hope for a resolution to the Middle East conflict. The iTraxx Europe Crossover index of euro high-yield credit default swaps falls 3 basis points to 281bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

1004 GMT - Sterling faces renewed falls as a leadership challenge for Prime Minister Keir Starmer remains a risk, MUFG Bank analysts say in a note. The "political turmoil is happening at the worst time given the upturn in global inflation risks due to the conflict in the Middle East," they say. With political uncertainty set to persist and potentially worsen, a period of renewed pound underperformance looks likely, they say. MUFG sees scope for the euro rise above 0.90 pounds if Starmer steps down and a new leader shifts policy to the left. The euro falls 0.2% to 0.8652 pounds after hitting a near three-week high of 0.8697 Tuesday, LSEG data show. (renae.dyer@wsj.com)

1004 GMT - The Japanese yen's fair value likely lies in a range between 120 and 130 against the dollar, judging from Japan's economic fundamentals, says former Bank of Japan Gov. Haruhiko Kuroda. While intervention fears may prevent the yen from sliding beyond the 160 mark, it is also difficult to expect a sharp recovery to the equilibrium rate, he says. "While the Japanese economy itself is moving steadily along a path of stable growth, we cannot avoid the impact of external uncertainties, such as exchange rate fluctuations and U.S. trade policy, making it necessary to manage fiscal and monetary policy with these risks clearly in mind," he says. The dollar was last trading at 157.85 yen.(megumi.fujikawa@wsj.com)

0954 GMT - Low volatility is contributing to keeping the euro in a narrow range versus the dollar, ING's Chris Turner says in a note. Three-month implied volatility--a measure of expected price swings in the options market--in the euro versus the dollar is last around 5.650% after reaching a 15-week low of 5.475% Tuesday, LSEG data show. That doesn't mean that a new trend cannot occur, Turner says. However, the price of a euro call option over a euro put option, known as risk reversals, is relatively flat and implies more range-bound trading, he says. Call options bet on an asset price rising while puts bet on falls. (renae.dyer@wsj.com)

0941 GMT - High yields on U.K. government bonds, or gilts, could help limit any sterling falls, ING's Chris Turner says. Gilt yields surged and sterling fell Tuesday as pressure mounted on Prime Minister Keir Starmer to resign. The prospect of loose fiscal policy under any new leader is negative for gilts and sterling. However, short-dated yields have more influence on sterling, Turner says. These are driven higher largely by expectations for U.K. interest-rate increases due to inflation risks, which are positive for sterling and help offset political risks, he says. "High yields are probably providing sterling with a little insulation." The euro falls 0.1% to 0.8660 pounds, having hit a near three-week high of 0.8697 Tuesday, LSEG data show. (miriam.mukuru@wsj.com)

0939 GMT - U.S. Treasury yields decline as oil prices move lower, stabilizing after Tuesday's rise following a higher-than-expected U.S. April inflation print. Meanwhile, the dollar rises slightly due to safe-haven demand amid continued uncertainty in the Middle East and as the inflation data "reinforced expectations that the Federal Reserve will maintain a cautious stance over monetary policy," says DHF Capital S.A's Bas Kooijman. The 10-year Treasury yield falls 0.8 basis points to 4.463%, according to Tradeweb. The DXY dollar index rises 0.3% to 98.570. (emese.bartha@wsj.com)

0907 GMT - Yields on U.K. government bonds edge lower on Wednesday, pulling away from Tuesday's multi-year highs after U.K. Prime Minister Keir Starmer vowed to stay on. However, yields are still at elevated levels as political jitters and concerns about inflation remain, Hargreaves Lansdown's Matt Britzman says in a note. "The worry is that pressure on Prime Minister Keir Starmer could eventually lead to looser fiscal policy," Britzman says. In addition, high energy prices caused by the Middle East conflict "are feeding expectations that the Bank of England may have to raise interest rates this year," he says. Ten-year gilt yields fall 1.6 basis point to 5.078%, having reached 5.135% on Tuesday, the highest level since 2008, Tradeweb data show. (miriam.mukuru@wsj.com)

0832 GMT - India's consumption curbs have begun with a duty increase on gold, silver and platinum imports. As external accounts face mounting pressure amid the prolonged Middle East conflict, India's dusting off a playbook used before to arrest non-essential demand, Barclays economists say. Surging gold prices and intermittently high volumes have significantly increased the country's import bill, but tariffs aren't going to make much of a difference. The move may dampen volume demand, but high international gold prices will likely outweigh that. Barclays expects the country's gold import bill to rise further in FY 2027 from FY 2026, offsetting the volume decline. It estimates a 6 bps bump in May CPI inflation, and a 10 bps boost to June's. (fabiana.negrinochoa@wsj.com)

0821 GMT - The recent appreciation of the Australian dollar and Norwegian krone is being helped by investors seeking higher yields in a low volatility environment, ING's Chris Turner says in a note. "Despite the unresolved crisis in the Middle East and inflation spreading around the globe, foreign exchange markets remain very relaxed." Low volatility supports demand for carry trades where investors borrow in low interest-rate currencies to invest in ones with higher rates such as the krone and Australian dollar. The euro falls 0.1% to 10.7628 krone after hitting a three-year low of 10.7312 Tuesday, LSEG data show The Australian dollar falls 0.1% to $0.7235 but remains close to the near four-year high of $0.7277 reached May 6. (renae.dyer@wsj.com)

0806 GMT - The Bank of Thailand could move to tighten its monetary policy if inflation comes in above target, ANZ Research's Kausani Basak and Sanjay Mathur say in a note. Headline inflation is expected to average 3.60% on year in 2Q, exceeding the upper range of the BOT's 1%-3% target. Although the central bank could look through the country's near-term inflation spike, breaching the higher end of its target would likely warrant policy action to anchor inflation expectations. ANZ expects BOT to begin hiking rates in August, delivering two consecutive 25bp hikes and taking the policy rate to 1.50% by October from the current 1.00%. (amanda.lee@wsj.com)

0802 GMT - India's government is likely to follow up its gold and silver tariff hikes with more moves to reduce precious metal imports, Nomura analysts say. The tariffs follow Prime Minister Narendra Modi's appeal to citizens to conserve foreign exchange and avoid purchasing gold and jewelry. With India's balance-of-payments deficit tracking at over $70 billion, Nomura sees the tariffs as aimed at reducing imports of precious metals and narrowing the current-account deficit. Nomura estimates that imports of precious metals--including platinum--have risen sharply to 2.7% of GDP. Modi's appeal suggestsreduced policy appetite for a further deepening of the twin deficits. Next steps could include disincentivizing other nonessential imports like electronics; a diaspora bond to mobilize FX deposits; or fuel-price increases to reduce the fiscal burden. (fabiana.negrinochoa@wsj.com)

(END) Dow Jones Newswires

May 13, 2026 06:36 ET (10:36 GMT)

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