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

0203 GMT - Japan's imports should normalize over the longer term if Middle East tensions ease and energy prices cool, says Mizuho Securities economist Yasuhisa Irie. "As energy prices drop and import volumes stabilize, overall import values will likely settle back down to pre-conflict levels and move generally flat," he notes. While trade deficits may persist in the near term, Japan's trade balance is expected to gradually improve, reflecting a slowdown in energy costs, Irie adds. Japan's imports rose 27.8% from a year earlier in July, government data showed Thursday. The import growth highlights progress in the Japanese government's efforts to secure alternative oil sources.(megumi.fujikawa@wsj.com)

0155 GMT - The dollar is attempting to hold above 158 yen, which is near the weekly "S1" pivot point on technical charts, StoneX's Matt Simpson says in commentary. If the greenback can manage a minor bounce against the yen, dollar bears may seek to "fade into moves towards resistance areas" versus the yen, the senior market analyst says. These include the dollar's resistance area around Y158.60 or the weekly pivot point around Y158.80, Simpson says. On the downside, a dollar break below Y158 brings the weekly volume point of control at Y157.65 into focus, the analyst adds. The dollar is 0.2% higher at Y158.53, LSEG data show. (ronnie.harui@wsj.com)

0141 GMT - Japan's exports are likely to remain resilient over the longer term, supported by steady economic growth among key trading partners, says Mizuho Securities economist Yasuhisa Irie. Robust investment in artificial intelligence should continue to drive solid U.S. demand for Japanese semiconductor-related products, Irie notes. However, U.S. tariff policies will likely weigh on other shipments, leaving Japan's overall trade surplus with the U.S. generally flat, he adds. "Exports to other countries and regions are also expected to remain on an uptrend thanks to firm economic fundamentals." Japan's total exports rose 23.2% from a year earlier in July, government data showed Thursday. (megumi.fujikawa@wsj.com)

0124 GMT - The U.S. Treasury's slew of measures including its announcement to buy back more longer-term debt points to softer dollar, says State Street Investment Management's Masahiko Loo in an email. "While these steps may improve market functioning, they do little to change the bigger picture of inflation and fiscal concerns, rising term premiums, and AI-driven capital demand," the senior fixed income strategist says. "In the grand scheme of things, that points to a softer dollar and continued support for gold, as investors revisit de-dollarization and currency debasement concerns," Loo adds. U.S. Dollar Index is steady at 98.871, LSEG data show. (ronnie.harui@wsj.com)

0122 GMT - Japan's trade deficit is likely to persist in the short term as high energy prices keep import costs elevated, says Mizuho Securities economist Yasuhisa Irie. Until passage through the Strait of Hormuz normalizes, import prices will remain high, Irie notes. Even if Middle East tensions ease and supply constraints lift, a rebound in import volumes could significantly expand total import values, he adds. "Exports are expected to continue expanding thanks to robust AI-related investment. However, the potential surge in imports triggered by eased supply constraints will likely outpace export growth, keeping the trade balance in the red overall." Japan recorded a 634.5 billion yen deficit in July, government data showed Thursday.(megumi.fujikawa@wsj.com)

0048 GMT - Asian currencies are mixed against the dollar, but may be buoyed by the U.S. Treasury Department's announcement on Wednesday that it'll buy back more of its longer-term bonds. The dollar seems to be under pressure, strategists at OCBC Group Research say in a research report. The Treasury's announcement "helped cap long-end U.S. yields," they say. It "signals Treasury's discomfort with the rise in long-term yields and should help restrain further increases in long-end yields in the near term," they add. The U.S. dollar falls 0.3% to 4.0420 ringgit, but is little changed at 1.2713 Singapore dollar and is 0.2% higher at 1,390.70 won, LSEG data show. (ronnie.harui@wsj.com)

0043 GMT - The U.S. dollar fell by around 0.8% in U.S. and European trading, weakening against all major currencies. The main catalyst was the U.S. Treasury's announcement that its buyback operations for securities dated from 10 to 30 years were being increased. The buyback operations allow the Treasury to buy older off‑the‑run bonds and replace them with Treasury bill issuance. The news was widely interpreted as a signal that Treasury Secretary Scott Bessent was concerned about the recent surge in long‑end yields, says Kristina Clifton, FX strategist at CBA. The 10-year and 30-year yields fell by around 7 and 10 basis points, respectively. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0026 GMT - The JGB yield curve flattens in the early Tokyo session, tracking U.S. Treasurys' yield curve flattening overnight. JGBs and Treasurys tend to move in tandem. The U.S. Treasury said Wednesday that it'll buy back more of its longer-term bonds in order to mitigate a sharp increase in borrowing costs. "What the Treasury has done is kind of bought a bit of reprieve from the [rising yield] trend, and we've certainly that in a fallback in longer-end yields," says Taylor Nugent, senior economist at NAB, in commentary. The 10-year JGB yield falls 4.5 bps to 2.845%, while 20-year yield drops 7.5 bps to 3.700%. (ronnie.harui@wsj.com)

0015 GMT - Japanese shares are higher in early trade, tracking Wall Street's gains overnight. Following the recent surge in Treasury yields, the U.S. government "calmed investors by announcing plans to expand purchases of long-dated debt, which eased liquidity concerns and signaled officials are prepared to step in to stabilize markets when borrowing costs rise too far, too fast," says Axel Rudolph, chief technical analyst at IG, in an email. Among the best performers on Japan's benchmark index, Shimano rises 4.9%, Daiichi Sankyo adds 4.7%, and Shiseido is 4.0% higher. The dollar is at 158.33 yen, compared with Y159.15 around Wednesday's Tokyo market close. The Nikkei Stock Average is up 0.6% at 65745.13. (ronnie.harui@wsj.com)

2338 GMT - Japanese stocks may rise, tracking Wall Street's gains overnight. The U.S. government's announcement on Wednesday that it would buy back more longer-dated Treasurys may calm market fears over a further bond selloff and spur investors to flock back to the stock market. Nikkei futures are 540 points higher at 66370 on the SGX. The dollar is at 158.25 yen, compared with Y159.15 around Wednesday's Tokyo market close. The Nikkei Stock Average closed 3.2% lower at a two-week low of 65326.42 on Wednesday. (ronnie.harui@wsj.com)

2322 GMT - The U.S. buyback of longer-dated debt, while immediately reducing 30-year bond yields by about 7 basis points, is relatively small, says Kieran Davies, chief macro strategist at Coolabah Capital. While the purchase of bonds and open-ended comments by policymakers can have a sustained effect on yields, the purchases usually have to be extremely large to have significant effect, he says. The Treasury announcement also does nothing about the drivers of higher bond yields, such as the demand for debt from government and tech companies, and the continuing risk of that inflation stays above the 2% target, he adds. (james.glynn@wsj.com; @JamesGlynnWSJ)

1950 GMT - Treasury yields settle mixed as the U.S. government plans to buy back more of its long-term debt. The Treasury department doubles to $4 billion the cap for buybacks of 10- to 30-year maturities. A 20-year bond auction shows signs of firm demand, although the 5.204% yield is the highest since 2023. Fed minutes reveal increasing concern about inflation, but that was before a soft July CPI. Markets mostly price a Fed hold next month. The 30-year yield sheds 0.090 percentage point to 5.194%, the deepest drop since October. The 10-year falls 0.054 p.p. to 4.651%. The two-year rises 0.004 p.p. to 4.178%.