Katayama finds a way to strengthen Yen without intervention, focus on SK Hynix $26.5B US IPO Friday

General trend and developments

-Japanese Yen bounced +0.6% against the greenback and Japanese bond yields tumbled as much as 10-11bps as Japan Fin Min Katayama said she plans to encourage Japanese pension funds, including the world’s biggest, GPIF, to increase their holdings of domestic financial assets. The size of Japanese pension funds alone ($2T in the case of GPIF), could create a structural tilt to how Takaichi’s govt may fund its ambitious growth targets including through increased bond issuance and special public-private investment funds for key areas such as AI, chips and energy. A shift in Japanese pension funds’ current 50% allocation to foreign investments toward domestic investment would create a lot more inflows for domestic assets and be supportive of the embattled Yen as well as equities and bonds. Japan govt’s “Honebuto” ("big-boned") economic framework policy document now said to be released on the 21st July.

-The ever-volatile Kospi led Asia, up over 5% at its best, following on the from Nasdaq which itself was up +1.6% overnight, continuing its strength despite the end of the US-Iran ceasefire and higher oil prices (which have now come off their highs of a day ago). Nikkei also strong, +1.6%

-SK Hynix is raising $26.5B later today in its Nasdaq listing (trimmed from $28-29B) but still marks the 3rd largest IPO in history behind SpaceX and Saudi Aramco. There will be interest in how US tech equity markets handle a further $26B of liquidity demand after hundreds of billions in equity and bond raises by US hyperscalers thus far in 2026.

-Taiwan stock exchange closed due to incoming Typhoon Bavi, and Taiwan Semi postponed its June Revenues release to Monday, July 13th.

-China’s PBOC still appears to be comfortable with the higher level of the Yuan as it set the fix today below 6.8 for first time since Feb 10th, 2023.

-No fresh reports of US bombing or Iranian retaliation since the US session, although a new twist to the resumption of US widespread bombing of Iranian targets this week as Israeli sources revealed that Iran reportedly devising a new plot to assassinate Pres Trump.

- Flexport in its weekly Global Logistics Update said that TPEB (Trans- East-bound) capacity for July is at its highest level in at least three and a half years, with continued low cancellation rates, as shippers continue to front-load cargo ahead of the July 24 expiration of the US Section 122 import tariffs.

-US Fed Chair Warsh provided more information of the new Fed Task Forces; External advisors with “deep expertise” will work independently of the Fed to examine areas key to monetary policy.

-Japan's producer price inflation (PPI) hit a 3-year high due to higher fuel costs from the Middle East conflict and the weak Yen. Wholesale prices in June surged 7.1% from a year earlier, with the Yen-based import price index rising 29.7% y/y, accelerating from a revised 26.1% gain in May.

-Malaysia Central Bank held rates at 2.75% for its 6th straight pause under the easing cycle. The Statement sees solid Q2 growth and both 2026 headline and core CPI to remain contained from impact of Middle East conflict.

-Major Nikkei component Fast Retailing (Uniqlo owner) fell as much as -4% despite handily beating last year’s results and raising guidance.

-US equity FUTs -0.2% to -0.1% during Asia trading.

Looking ahead (Asian-weighted focus, using Asian time zone)

-Fri July 10th: US IEA Monthly Report.

Holidays in Asia this week

-Fri July 10th: New Zealand.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens flat at 8,765.

-(AU) Follow up: Australia reports first case of H5 bird flu in an Australian seabird.

-(AU) ACCC [Australia competition regulator]: East Coast gas market to be well supplied in Q4 2026, but more investment needed to meet long-term demand.

China/Hong Kong

-(CN) Shanghai Composite opens -0.1% at 4,031; (HK) Hang Seng opens +0.8% at 24,213.

-(CN) China unveils 2026-2028 energy conservation, emissions plan.

-(CN) Top China brokerages revise compensation systems to align with latest regulatory requirements - Shanghai Securities News.

-(CN) China Stats Bureau: National Summer grain output reached 150.7M tons, +0.7% y/y.

-(CN) China saw 369M inbound and outbound trips in H1, 2026 - Xinhua.

-(CN) China PBOC sets the yuan mid-point at 6.7989 v 6.8036 prior (strongest level since 10th February, 2023).

-(CN) China PBOC Open Market Operation (OMO): Sells CNY20B in 7-day Reverse Repos; Net drains CNY43B v drains CNY279B prior.

Japan

-(JP) Nikkei 225 opens +1.2% at 68,526.

-(JP) Japanese cabinet set to decide on 'Honebuto' ("big-boned") economic framework policy document on the 21st July, 2026 - US financial press.

-(JP) Japan Fin Min Katayama: To support financial asset investment by GPIF, other pension funds; Won't comment on specific bond yield levels.

-(JP) Japan Jun PPI (domestic CGPI) M/M: 0.4% v 0.4%e; Y/Y: 7.1% v 6.8%e.

-(JP) Follow up: Japan's GPIF Spokesperson: Aware of Finance Minister Katayama's comments, decline to comment.

-(JP) Japan Econ Min Kiuchi: Government has consistently communicated it's stance of taking policy that heeds to fiscal sustainability; We are in process of revising draft of government economic blueprint taking into account views of ruling coalition lawmakers.

-(JP) Japanese "benchmark" 10-year JGBs yields fall -6bps to 2.815%; Japanese 40-year JGBs yields fall -7bps to 3.965%; Japanese 30-year JGBs yields fall -8bps to 3.947%; Japanese 20-year JGBs yields fall -8bps to 3.815%; Japanese 5-year JGBs yields fall -0.5bps to 2.025%.

-(JP) Japanese Yen strengthens in a few minutes to ¥162.10/USD (v ¥162.40/USD prior) following comments from Japan Fin Min Katayama on measures to support investment in assets by GPIF and other pension funds.

-(JP) 9983.JP Follow up: Shares fall -3.7% following release of 9M earnings results.

-(JP) 3382.JP Follow up: Shares fall -2.4% following release of Q1 earnings results.

Korea

-(KR) Kospi opens +3.6% at 7,552.

-(KR) South Korea Forex Authority: Dollar-Won market still disaligned compared to economy's fundamentals.

-(KR) SKHY Confirms to price US listing at $149/ADR; Sold 177.9M shares for gross proceeds ~$26.5B (lower than prior estimates of $28-29B); Trading expected to start trading on Nasdaq on 10th July, 2026.

-(KR) SKHY US listing approached ~$200B in demand; Top 25 accounts took > 2/3rds of ADR sale, with the top ten accounts taking in nearly 50% - press citing filing terms [US market close].

-(KR) SKHY Follow up: Shares rise +3.2% following confirmation of pricing for it's ADR sale.

-(KR) South Korea, Mongolia Central Banks sign MOU towards expanding cooperation.

-(KR) South Korea Presidential Policy Chief Kim: South Korea to hold discussion on property market on July 14th-16th - speaks to reporters in Seoul.

-(KR) Korea Exchange activates sidecar on Kospi following Kospi 200 FUTs rising by +5%, programme trading halted for 5 minutes; Korea exchange activates sidecar to Kosdaq following Kodaq 150 FUTs rising by +6%, programme trading halted for 5 minutes.

Other Asia

-(MY) Malaysia Central Bank (BNM) leaves overnight policy rate unchanged at 2.75%; As expected [EU market close].

-(TW) Taiwan Stock Exchange: Market closed Friday due to Typhoon.

-(TW) 2330.TW *REPORTEDLY SAYS TO POSTPONE JUNE'S MONTHLY SALES ANNOUNCEMENT TO JULY 13TH, 2026 (was due for release today, July 10th) - US financial press [citing a statement].

North America

-(US) Jun Existing Home Sales: 4.09M v 4.20Me [US market close].

-(US) US Fed Chair Warsh: Provides information on Task Forces, such as the leaders, that will work independently of the Fed to examine areas key to monetary policy conduct [US market close].

-(US) (US) Flexport Global Logistics Update: Planned TPEB capacity for July is at its highest level in at least three and a half years; Forward data for Weeks 28 to 30 point to continued low cancellation rates (update) [US market close].

-(US) Initial Jobless Claims: 215K v 217Ke; Continuing Claims: 1.814M v 1.814Me [US market close].

-(US) OpenAI CEO Altman: Every enterprise is thinking about spend; Latest AI model is 54% more token efficient on agentic coding; Lot of inaccuracies in report I pushed for government to take 5% stake - CNBC [US market close].

-(US) USTR Greer: Trump wants trade deficit with Mexico to come down; Spoke to Mexico counterpart yesterday on balancing trade [US market close].

-(US) Fed's Williams (moderate, voter): Fed minutes captured a ‘collective reaction function’; Policy may have to react if AI impact is sustained; It’s still early days on questions involving stablecoins; Stablecoins not displacing money market funds [US market close].

-(US) Fed’s Logan (voter, hawk): Strong markets must balance usage of leverage; Doesn't comment on policy or outlook [US market close].

-(US) New York Fed’s Perli: Ready to implement any FOMC-mandated changes in balance sheet; FOMC has given NY Fed flexibility in managing reserve management buying [US market close].

-(US) Treasury $22B 30-year bond reopening draws 5.058% v 5.020% prior; Bid-to-cover 2.44x v 2.33x prior and 2.42x over last 8 reopenings [US market close].

-(US) Weekly EIA Natural Gas Inventories: +61 BCF vs. +49 BCF to +59 BCF indicated range [US market close].

-(US) US Pres Trump reportedly fired all three Fed Election Commission (FEC) members - press.

-(US) NFLX Reportedly explores live TV and bundles options; Execs recently discussed adding live TV channels following a decline in subscriber engagement - WSJ.

-(US) OPENAI.IPO Launching the GPT‑5.6 family of models for general availability following limited preview, as expected.

-(US) OPENAI.IPO Reportedly Top Executive Fidji Simo to step down after extended medical leave; Will remain as a part-time advisor - WSJ.

-(MX) Mexico Central Bank (Banxico) Jun Minutes: Iran war remains major factor for prices; the Governing Board estimates that it will be appropriate to maintain the reference rate at its current level; Growth may slightly exceed 1.1% forecast in 2026 [US market close].

-(MX) Mexico Jun CPI M/M: -0.3% v -0.2%e; Y/Y: 3.4% v 3.5%e [US market close].

-(PE) Peru Central Bank (BCRP) leaves Reference Rate unchanged at 4.25%; as expected.

Europe

-(RU) Pres Putin said to likely escalate the war in Ukraine in coming months and rejects calls to negotiate peace while Ukraine strikes Russian territory - press [EU market close].

-(EU) ECB PUBLISHES ACCOUNT OF JUN MEETING (AKA MINUTES): All members supported the proposal to raise the three key ECB interest rates by 25bps; Did not want to flag series of hikes or one-off moves in June [EU market close].

-(RU) Russia reported fire at Taganrog Seaport following drone attack - Tass.

-(EU) EU Commission: Imposed anti-dumping duties on import of passenger car and light truck tires from China [EU market close].

-(EU) EU to prioritize European providers in critical public services - press [EU market close].

-(UK) BOE’s Pill (chief economist, hawkish dissenter): Will need to raise rates in the year ahead [EU market close].

-(FR) Bank of France (BOF): Raises Q2 growth to 0.2% (prior: flat); Sees upward risks to 2026 GDP forecast [EU market close].

-(NL) Netherlands May Manufacturing Production M/M: 0.1% v 1.6% prior; Y/Y: 4.9% v 4.9% prior.

-(NL) Netherlands Jun Producer Confidence: +1.3 v -2.0 prior.

Middle East

-(IL) Reportedly Iran is devising a new plot to assassinate Trump according to Israeli sources - WSJ.

-(IR) US CENTCOM: Iran does not control the Strait of Hormuz - X post.

-(IR) TankerTrackers.com: Anticipating a possible imminent resumption of the US Navy blockade, Tehran shipped out no less than 10 million barrels of crude oil and fuel oil overnight [EU market close].

-(IR) Iran said to claim US struck the Bushehr nuclear facility perimeter - IRNA [EU market close].

-(IR) Reportedly four Japanese-linked vessels remain in the Persian Gulf - Kyodo.

Levels as of 01:20 ET

Nikkei 225 +1.5%; ASX 200 +0.3%; Hang Seng +1.4%; Shanghai Composite +0.7%; Kospi +4.5%.

Equity S&P500 Futures -0.1%; Nasdaq100 -0.2%; DAX -0.1%; FTSE100 +0.1%.

EUR 1.1461-1.1429; JPY 162.46-161.29; AUD 0.6970-0.6934; NZD 0.5793-0.5748.

Gold -0.2% at $4,114/oz; BTC +2.2% at $63,986; WTI Crude Oil +0.3% at $72.30/bbl; Copper +0.9% at $6.3043/lbs.