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

0344 GMT - The key issue at this week's Bank of Japan meeting is how firmly it keeps the door open to further rate increases to avoid the yen's material depreciation against the dollar, says David Clewell at T. Rowe Price. Markets are focused on the path of monetary policy beyond this week, the co-portfolio manager says in a note. A September rate increase is largely reflected in market expectations, while markets are also pricing in between three and four increases over the next 12 months. The yen may be volatile as the market wrestles with messages from Fed Chairman Kevin Warsh and BOJ Gov. Kazuo Ueda in the coming days. The dollar is at Y156.10. (monica.gupta@wsj.com)

0340 GMT - Malaysia's consumer-price index likely rose 1.8% on year last month, the same pace as in July, according to the median estimate of seven economists polled by The Wall Street Journal. Inflation is expected to be stable, with price pressures contained by targeted fuel subsidies and steady domestic demand, despite higher food prices, DBS economists Taimur Baig and Chang Wei Liang say in a note. The CPI data for August are due Friday. (yingxian.wong@wsj.com)

0334 GMT - A 6% yield on 10-year U.S. government bonds remains well within the range of possible outcomes given rising sovereign debt supply, sticky inflation and unattractive valuations in long-maturity U.S. Treasuries, says Arif Husain, head of global fixed income at T. Rowe Price. There is a lot of issuance for markets to absorb, raising the question of how much compensation investors will ultimately demand to absorb that supply, he says. Persistent inflation uncertainty can challenge the case for owning duration, he adds. (james.glynn@wsj.com; @JamesGlynnWSJ)

0330 GMT - The Fed's latest meeting signals that it won't take much to push the central bank to three hikes and potentially more if needed, says Robert Sockin, chief U.S. economist at PGIM. This was a hawkish hike and the Fed signaled one additional rate hike this year. Eight out of 18 Fed officials who submitted forecasts signaled three hikes in the current cycle by the end of 2027. Chairman Kevin Warsh noted that "the Fed removed a 'dose of accommodation,' which sounds like he and other participants view [Wednesday's] action as just a modest step toward tightening financial conditions--suggesting that there is likely more to come," Sockin says in a note.Risks remain tilted to the Fed doing more if inflation continues to run high, Sockin adds. (monica.gupta@wsj.com)

0308 GMT - The Indonesian auto market's recovery suggests resilient vehicle demand despite continuing macro uncertainties, which supports Maybank Sekuritas Indonesia's constructive view on the sector. Car sales rose 1% on month in August and notched the strongest monthly volume recorded so far in 2026, she says. Improving consumer confidence, manageable financing conditions and growing electric-vehicle adoption should support industry volumes into 2H, says analyst Paulina Margareta in a note. However, incumbent manufacturers face increasing pressure to defend market share from aggressive Chinese competitors, she says. Conglomerate Astra International, which also sells vehicles, is likely to focus on maintaining its market leadership amid accelerating EV penetration and evolving competitive dynamics, she says. (megan.cheah@wsj.com)

0251 GMT - Markets risk overinterpreting the tone of Federal Reserve Chairman Kevin Warsh's press conference after its meeting, says BlackRock Investment Institute's Jean Boivin in a note. The Fed helped reestablish the new chairman's credibility with its decision to hike rates, Boivin says. He notes the emphasis on the strength of the U.S. economy was a notable feature of the post-decision press conference, which markets interpreted as hawkish. The head of the BlackRock Investment Institute notes--against the backdrop of stronger economic growth--the rate hike may not be bad news for risk assets. "We think it is important to distinguish the need to safeguard the Fed's credibility from the start of a sustained hiking cycle," says Boivin. (megan.cheah@wsj.com)

0234 GMT - Finding a pulse in Australia's property market is difficult at the moment, but it is there. The housing auction clearance rate gradually improved last week, rising to 52.6% from 49.3% the week prior, says property research group Cotality. It was the strongest result in 19 weeks. The improvement also came despite a higher volume of auctions with 1,585 auctions held across the combined capital cities, up from 1,431 the week prior. House prices are weakening as interest rates increase, with the downward momentum expected to continue in the coming months. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0233 GMT - The main motivation behind the Fed's decision to hike rates this time was credibility, given bond market pricing and recent developments in oil markets, says Christian Scherrmann, DWS Chief U.S. Economist. If U.S. inflation doesn't cool down in coming quarters, one or two rate hikes by the Fed may not suffice. One or two rate hikes will also likely not solve problems caused by external shocks, such as rising oil prices and renewed uncertainty from tariffs, Scherrmann says in a note. Nevertheless, there are good reasons to believe that inflation will trend lower and that tightening to the point where domestic demand slows will be unnecessary, Scherrmann adds. (monica.gupta@wsj.com)

0216 GMT - If the Federal Reserve raises interest rates as markets project--more than three hikes by the middle of next year--rate differentials between the U.S. and Japan will narrow little under the current policy path priced in for the Bank of Japan, says Mitsubishi UFJ Morgan Stanley Securities strategist Keisuke Tsuruta. The wide rate gap has been a major driver of the yen's weakness. Investors are likely to stay sensitive to the possibility of faster BOJ tightening, given that some board members have pointed to global monetary shifts when considering Japan's own policy, he says. The yield on 10-year Japanese government bonds was last down 0.5 bp at 2.990%. (megumi.fujikawa@wsj.com)

0148 GMT - Fixed mortgage interest rates in Australia are rising ahead of the central bank's policy meeting at the end of the month. Markets expect the Reserve Bank of Australia to raise the official cash rate by 25 basis points. The likely hike comes as house prices are in a sharp retreat. After weeks of inactivity, fixed rates have now started to move, and they're on the way up, not down, Canstar says. NAB and ANZ on Thursday raised their fixed rates by up to 20 basis points. This takes the number of lenders hiking fixed rates in the month of September to nine. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0137 GMT - If the Bank of Japan raises its policy rate Friday as widely expected and signals a hawkish stance on further monetary tightening, it could trigger a sharp appreciation in the yen over Japan's upcoming long weekend, says Daiwa Securities analyst Eiji Kinouchi. The setup risks mirroring the posthike market turmoil of summer 2024, when a BOJ rate increase, alongside speculation over the Fed's policy path, prompted a surge in the yen and a steep selloff in Tokyo equities, he says. Central bank officials have been more cautious in their market communications since that episode. Japanese financial markets will be closed for national holidays from Monday through Wednesday. (megumi.fujikawa@wsj.com)

0129 GMT - The Reserve Bank of New Zealand was non-committal at its September policy meeting about when the next interest rate hike might come but was clearly leaning toward a pause at the next meeting in October, says Matthew Galt, an economist at ANZ. Global developments since then have been suggesting it would be prudent to hike sooner rather than later, and the resilience shown in 2Q GDP data adds further pressure in that direction, he adds. ANZ continues to expect a 25-basis-point hike by the RBNZ in October.