Yen gains may facilitate the BoJ’s work

Asia market update: JP data appear inline with rate expectations; Yen gains may facilitate the BOJ’s work; CN trade surplus likely to attract attention from Trump; Upcoming RBA speakers confronted with weak data; Oil rises as the Saudis commented on attacks on Tues.

General trend and developments

- Saudi Energy Ministry noted energy facilities were targeted in the Southern region on Sept 8th's morning. As a result, operations at "several" energy sites have been halted.

-Recent Japan data releases appear consistent with the Sept BOJ rate hike expectations [Jul Real Wages]. However, the weaker than expected upward revision in GDP, also, seems to be consistent with a 25bps BOJ move, as opposed to something larger, perhaps 50bps. The BOJ would have less work to do if markets oblige and help the central bank through the FX channel. The Yen has extended gains on Tues. Meanwhile, Finance Minister Katayama has suggested that mortgage rates might be becoming restrictive. USD/JPY extended its decline in Asia, falling a further -0.3% to 153.80 [the lowest level since mid-Feb].

-Japanese cos. play down China’s move to raise import tariffs on silicon. Equity investors seem to agree. China announced preliminary anti-dumping move that imposes import deposits of up to 99.2% on Japanese dichlorosilane, a high-purity silicon precursor used in semiconductor manufacturing. Japanese companies such as Shin-Etsu and Nippon Sanso noted that the product represents only a small share of their overall business and expect limited earnings impact. On the other hand, Japan’s Chief Cabinet Secretary Kihara criticized the measure as defying international norms and pledged to prevent undue effects on Japanese firms, whilst Japan’s Trade Minister Akazawa stated that the government would look into the impact of China’s anti-dumping measures.

-China’s August foreign reserves readings rose above estimates to $3.438T (vs. $3.427T expected) and Hong Kong’s August foreign reserves reading declined to $442.9B from $447.9B in July. China’s August foreign reserves readings indicated that gold reserves increased to $350.1B from $306.4B m/m as holdings rose to 76.73M troy oz from 76.08M troy oz m/m, marking the 22nd consecutive month of gold purchases. The continuation of gold accumulation from China’s PBOC in Hong Kong to support trading hubs comes amid the backdrop of Hong Kong’s newly launched central gold clearing and settlement system (trial operations began in early-July) and its “Delivery Connect” link with the Shanghai Gold Exchange.

-At the same time, China’ rise in FX reserves reflected the country’s massive trade surplus, which rose m/m to >$119B in Aug. The trade surplus alone with the US widened to $29.2B v $28.0B m/m. China’s large surplus is expected to be a key topic when Trump and Xi hold their expected Sept meeting. China’s rare earth exports and soybean imports rose m/m during Aug. We ponder whether this has positive implications for the fragile US/China trade truce. Recall, Chinese executives may join President Xi's US trip, according to the SCMP [Aug 28th]. This comes as the two sides prepare to extend a one-year trade agreement reached in Busan [South Korea] last October 2025, said the newspaper.

- China’s August CPI and PPI are due tonight [September 8th, 2026], US August PPI along with the ECB’s interest-rate decision on Thursday [September 10th, 2026], and US August CPI and core CPI releases on Friday [September 11th, 2026].
-Australian confidence data battered by inflation and property market concerns.

-RBA Assistant Governor Hunter stated that the housing market remains an immediate impact channel from monetary policy decisions and that the RBA is paying ‘very close’ attention to rents in CPI, while noting that Australian recession is not the baseline forecast. This comes after the September Westpac Consumer Confidence Index fell to 84.4 (vs. 88.9 prior) as the housing downturn weighed on homeowner and homebuyer sentiment, and additionally, after Bathla [collapsed property developer] reached a short-term funding agreement with 5 lenders on 6 September. Westpac now sees the RBA raising cash rate by +25bps in November, RBA Deputy Governor Hauser is scheduled to speak later at 4:30am ET which would provide further clarity on rate path probabilities.

-Over the EU market open, Eurozone Q2 Final GDP growth recorded at +0.6% q/q (vs. +0.4% expected) and +1.2% y/y (vs. +1.0% expected), while employment growth remained unchanged from its preliminary reading at +0.1% q/q and +0.5% y/y respectively. Within the region, Germany’s July industrial production fell -1.1% m/m (vs. +0.2% expected) and -1.6% y/y (vs. +0.0% expected), underscoring continued weakness in the industrial sector.

-US equity FUTs +0.0% to +0.5% during Asia trading.

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

-Tue Sep 8th: TW Aug CPI, KR Aug Unemployment Rate, JP M2 & M3 Money Stock, CN Aug CPI/PPI, ID Aug Consumer Confidence, MY July Industrial Production).

-Wed Sep 9th: TW Aug Trade Balance, US 10-Year Note Auction, (Wed night, TH Aug Consumer Confidence, ID July Retail Sales, DE Aug CPI).

-Thu Sep 10th: OPEC Monthly Report, EU ECB Interest Rate Decision, US Aug PPI, US Aug Existing Home Sales, US 30-Year Bond Auction, (Thu night, NZ Aug Business PMI, JP Q3 BSI Large Manufacturing Conditions, JP Aug PPI, MY July Unemployment Rate, UK July GDP & Industrial Production & Trade Balance).

-Fri Sep 11th: IEA Monthly Report, RU Interest Rate Decision, US Aug CPI & Core CPI, US Sep Preliminary Michigan Consumer Sentiment, WASDE Report, RU Q2 GDP & Aug CPI.

-Sat Sep 12th: CN Aug New Yuan Loans & Total Social Financing & M2 Money Stock.

Holidays in Asia this week

-No holidays in Asia this week.

-Mon Sep 7th: (Note: “Labor Day” – U.S. markets closed, reduced liquidity).

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens -0.1% at 9,000.

-(AU) Reserve Bank of Australia (RBA) Assistant Governor Hunter: Housing market important transition mechanism for monetary policy; RBA monitoring Bathla situation for financial stability risks - Sydney Forum.

-(AU) Australia Sept Westpac Consumer Confidence Index: 84.4 v 88.9 prior.

-(AU) Australia ANZ Roy Morgan Weekly Consumer Confidence: 71.9 v 74.9 prior (hitting six-week lows).

-(AU) Australia Aug NAB Business Confidence: -8 v -7 prior.

-(AU) Westpac now sees RBA raising cash rate by +25bps in November [2026].

-(AU) Australia nears treaty with Solomon islands in bid to 'limit China's influence' - SCMP.

-(AU) Australia sells A$400M v A$400M indicated in 5.00% June 2036 Bonds: Avg Yield: 5.1874% v 4.9208% prior; bid-to-cover: 5.76x v 4.10x prior.

-(AU) [Australian co.] Firmus Technologies: Surpasses 900MW contracted capacity, adds OpenAI as anchor customer and expands into Malaysia.

-(NZ) New Zealand Q2 Manufacturing Activity Q/Q: 3.1% v 3.1% prior.

-(NZ) RBNZ Monetary Policy Committee (MPC) Board Member Prasanna Gai: It’s plausible key rate already in neutral zone; neutral rate may shift as conditions evolve.

China/Hong Kong

-(CN) Shanghai Composite opens +0.1% at 3,936; (HK) Hang Seng opens -0.6% at 25,252.

-(CN) China Aug trade balance: $119.1B V $119.1BE.

-(CN) China Aug trade balance (CNY-denominated): 809.3B V 767.1B PRIOR.

-(CN) China Aug Foreign reserves: $3.438T V $3.427TE [EU market open].

-(CN) China reportedly to levy up to 99.2% import deposit on Japanese silicon imports - press [EU market open].

-(CN) China Premier Li: To deepen energy, investment and AI cooperation with Qatar - follows meeting with Qatar FM in Beijing [EU market open].

-(CN) PBOC signals no rush to ease policy broadly in latest reverse repo operations - Daily.

-(CN) China Foreign Ministry: China's special envoy for Afghanistan visited Pakistan, Saudi Arabia for consultations.

-(CN) Myanmar military intensifies operations to retake China project areas - Nikkei Asia.

-(CN) AI, chip firms among bidders for flagship Northern Metropolis tech hub at border - SCMP Exclusive.

-(CN) China has tightened rules in order to accelerate automakers' payments to suppliers, announces new financial rules for carmakers - Press [update].

-(CN) Guangdong housing department has met with property developers to assess how the new housing policies are impacting projects - Local press.

-(CN) DEEPSEEK.IPO To hire 150 additional engineers - Report.

-(CN) RIO.AU China tells steel mills to hold off on buying Rio Tinto's ores.

-(CN) USD/CNY China PBOC sets the yuan mid-point at 6.7804 v 6.7795 prior.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY1B in 7-day Reverse Repos; Net drains CNY4B v drains CNY5B prior.

-(HK) Hong Kong Aug Foreign Reserves: $442.9B v $447.9B prior [EU market open].

-(HK) 9868.HK Comments: Robots scheduled to enter mass production by year-end.

Japan

-(JP) Nikkei 225 opens -0.8% at 65,835.

-(JP) Japan Q2 final GDP Q/Q: 0.4% V 0.3% prelim; GDP annualized Q/Q: 1.4% V 1.1% prelim.

-(JP) Japan July labor cash earnings Y/Y: 4.7% V 3.8%E (biggest jump since January 1997).

-(JP) Japan sells ¥2.5T VS. ¥2.5T indicated in 5-year JGB bonds; AVG yield: 2.2390% V 2.1630% PRIOR; bid-to-cover: 3.42X V 4.15X PRIOR.

-(JP) USD/JPY Breaks below recent lows <155.00; Last seen at 154.80 (lowest since mid-Feb 2026) [EU market open].

-(JP) USD/JPY LSEG Data: Declines by -0.3% to 153.80 [lowest since Mid-February].

-(JP) Japan July Current Account Balance: ¥2.989T v ¥2.850Te.

-(JP) Japan Aug Bank Lending Y/Y: 5.4% v 5.4% prior.

-(JP) Japan August 1-20th: Exports Y/Y: +18.0%; Imports Y/Y: +26.1%.

-(JP) Japan Aug corporate bankruptcies Y/Y: +3.1% v +7.0% prior.

-(JP) Japan Aug Eco Watchers Current Survey: 46.4 v 46.2e.

-(JP) Follow up: Japan Cabinet reshuffle may begin as early as Sept 16th - Japan press [EU market open].

-(JP) Japan Chief Cabinet Secretary Kihara: China anti-dumping move targeting Japan defies norms; Will act to prevent undue impact from China anti-dumping.

-(JP) Japan Trade Minister Akazawa: US investment initiative is making progress steadily; Will look into impact of China anti-dumping move.

-(JP) Japan bonds had largest 2-month foreign outflow since 2023; cites MOF data; foreigners sold ¥1.63T of JGBs in Jul following sales of ¥2.4T in Jun - US financial press.

-(JP) Japan Health Min Ueno: Market hasn't diverged too much from GPIF assumption - Tokyo News Conference.

-(JP) Japan's Ishin party seeks special mission post in reshuffle - Mainichi.

-(JP) Japan LDP Policy Chief Kobayashi to retain post - Yomiuri.

-(JP) Mitsubishi Gas Chemical, Eneos Xplora, and Toyota announces strategic partnership to invest A$14.5M in Gold Hydrogen (GHY on the ASX).

-(JP) 4063.JP Comments: Examining China anti-dumping measures; China anti-dumping has no impact on earnings.

-(JP) 4091.JP Comments: Limited impact from China's anti-dumping measures.

Korea

-(KR) Kospi opens +0.7% at 7,046.

-(KR) SOUTH KOREA Q2 PRELIMINARY GDP Q/Q: 0.6% V 0.6% ADVANCE; Y/Y: 3.7% V 3.7% ADVANCE.

-(KR) South Korea-US deal confirmed to include plan for 8 nuclear plants in the US; the article mentions South Korea-designed APR1400 and US-developed AP1000 reactors - Daily.

-(KR) South Korea Defense Minister Ahn: North Korea is fortifying the DMZ beyond precedent, dialogue needed to resolve issue.

-(KR) PKX To invest KRW480B in new auto steel plant in South Korea - US financial press.

-(KR) 011200.KR Awarded KRW4.7T long-term shipping contract with Vale International S.A.

Other Asia

-(PH) Philippines July Unemployment Rate: 6.0% v 4.9% prior.

-(PH) Philippines July M3 Money Supply Y/Y: 10.3% v 10.6% prior.

-(PH) Philippines Central Bank (BSP): Philippine debt plans leave room for private borrowers.

-(IN) US Commerce Department: India joins effort to ensure 6G network security - post on X [update].

-(IN) India announces details of upcoming bond sale (held on Fridays); to sell combined INR320B in 2029, 2033 and 2056 bonds on Sept 11th.

-(ID) Indonesia reopens Jakarta, Bandung airports as eruptions ease.

-(ID) Indonesia Agency: Still potential for flight disruption after Mt Anak Krakatau eruptions, depending on wind direction, ash height.

-(ID) AIABF Follow up: Resumes flights impacted by the Mount Anak Krakatau volcanic eruption.

-(MY) Malaysia Economy Minister Akmal: National energy efficiency action plan aims 11.6% cut in energy demand.

-(MY) Malaysia plans to add ~9GW of gas-fired power capacity - STAR.

-(SG) Singapore PM: Government accepts recommendations to increase ministerial salaries.

-(SG) C6L.SG Singapore Transport Minister: SIA is a listed company that funds investments from its own balance sheet, has not sought further capital from shareholders; To grow further SIA must grow overseas because there is a limit to how many will fly to or from Singapore.

-(TH) Thailand Aug Consumer Confidence: 53.2 v 51.8 prior.

-(TH) Thailand Central Bank sells THB60B vs. THB60B indicated in 3-month bills; Avg Yield: 0.94262% v 0.94619% prior; bid-to-cover: 1.15x v 1.65x prior.

North America

-(US) Panama canal warns of possible transit cuts due to climate change; Number of daily transits could fall to 27 v 32 now - FT [EU market open].

-(US) Secretary of State Marco Rubio to meet with Colombia President Espriella at 2pm [local time] in Colombia on Tuesday [September 8th, 2026].

-(US) White House: US President Trump to participate in a Steel event at 10:35am ET; To sign executive orders at 1:00pm ET on Tuesday [September 8th, 2026]-(US) Pres. Trump: Oil prices will drop precipitously, like everything else is dropping (but more!), when we WIN the wa... - post on Truth Social.

-(US) FAA issues ground stop at San Francisco International Airport due to traffic volume.

-(US) ANTHROPIC.IPO Anthropic and OpenAI bankers push for top-tier credit ratings post-IPO - FT.

-(MX) Mexico Aug Vehicle Production: 344.9K v 302.7K prior [EU market open].

-(CO) Colombia Aug CPI M/M: 0.4% v 0.3%e; Y/Y: 6.2% v 6.2%e.

-(AR) Follow up: Argentina to file complaints over Falkland Oil.

-(PE) Peru shows the limits in the US anti-China push - NYT.

Europe

-(EU) Eurozone Q2 final GDP Q/Q: 0.6% V 0.4%E; Y/Y: 1.2% V 1.0%E [EU market open].

-(EU) Eurozone Sept Sentix investor confidence: 5.1 V 2.0E (highest since Feb 2022) [EU market open].

-(DE) Germany July industrial production M/M: -1.1% V 0.2%E; Y/Y: -1.6% V 0.0%E [EU market open].

-(RU) Russia Aug Official Reserve Assets: $769.0B v $720.3B prior [EU market open].

-(RU) Kremlin spokesperson: Does not rule out Russia-US-Ukraine talks resumption, too early to speak about time and venue [EU market open].

-(EU) Commission Pres Von der Leyen: To provide €200M for Greenland as part of package in 2026/27; Reflects EU choice to be more present in Arctic [EU market open].

-(UR) Ukraine City Officials: Two residential buildings damaged in Ukraine's Kyiv in Russian air strike.

-(UK) Chancellor Healey: Committed to meet fiscal rules with buffer against uncertainty; To build on Reeve's move to recover fiscal discipline; Borrowing costs are at a historic high; No comments on tax policy ahead of budget - (first major economic speech) [EU market open].

-(UK) King Charles to host exclusive AI gathering later this month - Politico [EU market open].

-(UK) Aug BRC Sales Like-For-Like (LFL) Y/Y: 0.5% v 1.0% prior.

-(DK) Denmark PM Frederiksen: Want to work with U.S on security and defense; Need to strengthen arctic security [EU market open].

-(IE) Ireland Aug Construction PMI: 50.7 v 53.0 prior.

-(SE) Sweden Aug Maklarstatistik Housing Prices: 3.9% v 3.4% prior.

-(NL) Netherlands Aug CPI M/M: 0.3% v 1.6% prior; Y/Y (final): 3.3% v 3.3% prelim.

Middle East

-(IR) Iran official: Negotiations with Oman on Hormuz reached final stages; To reach accord on temporary Hormuz route in coming days [EU market open].

-(SA) Saudi Energy Ministry: Energy facilities targeted in Southern region on Sept 8th's morning; Operations at "several" energy sites halted.

-(SA) ARAMCO.SA *REPORTEDLY ARAMCO'S JIZAN Oil refineries on the red sea hit in new strikes on Monday; damage being assessed - FT [EU market open].

-(IR) WSJ: Oil dollars are drying up for Iran - update.

-(IR) Iran Former Pres Rouhani proposes referendum on ending war - UK press (in line) [EU market open].

-(IR) Iran Top Security Official: Has recalibrated posture toward US warships, bases - post on X.

-(IR) On Monday, Strait of Hormuz shipping traffic continued to slow; cites shipping data - financial press.

-(SA) Saudi-led Coalition: Houthi attacks dangerous escalation; 73 people injured in Houthi attacks on Saudi Arabia; will firmly respond to the Houthi attacks.

Levels as of 01:20 ET

Nikkei 225 -0.3%; ASX 200 -0.9%; Hang Seng -0.5%; Shanghai Composite +0.3%; Kospi +1.1%.

Equity S&P500 Futures +0.0%; Nasdaq100 +0.5%; DAX -0.0%; FTSE100 -0.1%.

EUR 1.1635-1.1621; JPY 154.41-152.89; AUD 0.7224-0.7206; NZD 0.5889-0.5851.

Gold +0.4% at $4,423/oz; BTC -1.1% at $78,956; WTI Crude Oil +2.0% at $93.30/bbl; Copper +1.2% at $6.7873/lbs.