Yen has continued to gain while JGB yields extend drop ahead of Masu comments

Asia market update: Focal points include the escalating US/Canada trade war, latest US/Iran military exchange; Yen has continued to gain while JGB yields extend drop ahead of Masu comments [Sept 10th]; CN inflation hotter but still tame; US price data due on Thurs-Fri.

General trend and developments

- US equity futures opened modestly lower, the Nasdaq FUTs opened -0.1% at ~29,493 (vs. 29,523 prior) and the S&P 500 FUTs opened -0.1% at ~7,669 (vs. 7,677 prior). Before the equities reopened, US Treasury Secretary Scott Bessent stated that the US bond market is performing better than other bond markets and that officials are now focused on “slowing things down,” while stating that 3% GDP growth would allow the US to grow its way out of rising debt. (Reminder August 19th: The US national debt passed the $40T milestone.).

- Oil prices have remained elevated as US and Iranian military forces had further exchanges during the NY afternoon on Tues. Limited material impact has thus far been reported. As a reminder, Iran has said it expects to reach an agreement on a temporary Strait of Hormuz route in the coming days. Specifically on Mon [Sept 7th], Iran’s Top Security Official outlined plans of a restricted zone to be announced outside the Strait of Hormuz in the coming days, extending from the line of the US Navy’s blockade into the Gulf. Vessels entering the zone will face sanctions, with Iran and Oman expected to sign maps defining authorized shipping routes in the coming days. Meanwhile, uncertainty remains regarding any impact from the Yemeni Houthis Mon-Tues attacks on energy assets in Saudi Arabia.

- During the post-U.S. market session, the U.S. expanded restrictions on Canadian imports, including new Section 338 import bans on dairy, alcohol and motorcycles, while maintaining 50% tariffs on certain Canadian goods, including autos. The Section 338 tariffs apply to covered goods regardless of USMCA eligibility and are imposed in addition to existing Section 232 tariffs. The latest tariff changes will take effect on Sept 15th. The trade prohibitions become effective on Sept 29th. The Trump Administration also continued to warn Canadian plane maker Bombardier.

- Even still, the White House appeared to exhibit some restraint in its latest retaliation, as both sides remain open to talks and Canada has held off from announcing further measures, for now. US officials, further, affirmed auto tariffs on Canada are set to remain at 50%, effective on January 1st, 2026. Overall, a US official said the measures were only in the ‘single digit billions’, in terms of the scope.

- By comparison, Canada’s retaliatory tariffs of 15–50% on ~$20 billion of U.S. products across 700 categories (including steel, aluminum, dairy, appliances, clothing, and other products) took effect today on September 8, 2026, following trade talks with the Trump administration that collapsed in late-August.

- The most recent Trump measures against Canada had been previously flagged. The US was weighing more trade measures against Canada after retaliation, according to press reports from Aug 25th. The additional actions were speculated to include higher tariffs and 'other' trade actions.

- China’s Aug inflation data showed acceleration amid the impact of energy prices and the Iran-war. CPI was expected to be supported by food prices, commodity costs and services consumption, according to the Chinese press. Even with the hotter monthly inflation, CPI remains significantly below the government’s target [~2.0%], leaving ample easing room for the PBOC, especially given the recent yuan strength. The focus will now shift to the US Aug PPI and CPI figures which are expected to be released on this upcoming Thurs and Fri.

- In the capital markets, China is tightening IPO approvals for humanoid robotics startups, raising scrutiny over valuations and market stability in the robotics sector. The move comes after shares of Unitree have collapsed since debuting in mid-Aug. There have been hints that China might try to slow its robotics industry, especially in the face of the ongoing “tech war” with the US. In late Aug [28th], the country’s top planning body [NDRC] stated robot development must be tailored to local conditions and pursued in a sound and orderly manner.

- Following up from RBA Assistant Governor Hunter comments yesterday, RBA Deputy Governor Hauser later reinforced his hawkish tilt, stating the key question is whether “more is needed on interest rates” and that the RBA “stands ready to raise rates again if needed”, while noting recent inflation and GDP data have come in above expectations. This aligns with the ASX RBA Rate Tracker, which indicates a 66% probability of a +25bps rate hike to 4.60% in November (vs. a 34% probability of rates being left unchanged).

- In Japan, Asahi reported that the Japanese Cabinet reshuffle is set for September 17th, 2026.

- Finally, the top US diplomat in Taiwan stated that preserving peace in the Indo-Pacific remains a top priority for the US under the Trump administration, framing the upcoming US-China summit as an opportunity to further advance a relationship of strategic stability. Scarborough Shoal (also known as Huangyan Dao or Panatag Shoal) has long been a disputed coral atoll in the South China Sea, highlighting tensions between China/Taiwan/Philippines. China has maintained effective control of the disputed feature since 2012 despite competing Philippine claims, with tensions varying periodically. On July 21st, 2026, Chinese Foreign Minister Wang Yi stated during ASEAN remarks in Manila that China would continue to work with ASEAN based on the principles of peace, development, cooperation, and mutual benefit.

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

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

-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” – US markets closed, reduced liquidity).

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens +0.1% at 8,932.

-(AU) RBA Dep Gov Hauser: Question is whether more is needed on interest rates; RBA stands ready to raise rates again if needed [EU market close].

-(AU) Australia to invest A$2.4B in air and missile defense capabilities through Lockheed Martin partnership.

-(AU) Australia sells A$800M v A$800M indicated in 3.75% May 2034 bonds; Avg Yield: 5.0672% v 4.3260% prior; bid-to-cover 4.46x v 3.91x prior.

-(AU) WGX.AU Guides FY27 (A$) Gold Production 385-425Koz, AISC 2.98-3.38Koz.

-(AU) YAL.AU Australia's Mining & Energy Union-Workers at premier coal mine 'overwhelmingly' voted in favor of protected industrial action.

-(NZ) RBNZ Assistant Governor Silk urges market players to improve repo transparency.

China/Hong Kong

-(CN) Shanghai Composite opens +0.1% at 3,943; (HK) Hang Seng opens 'little changed' at 25,328.

-(CN) CHINA AUG CPI Y/Y: 0.8% V 0.8%E.

-(CN) China tightening approval for humanoid startups IPO following Unitree's volatile debut - The Information [Exclusive].

-(CN) USD/CNY China PBOC sets the yuan mid-point at 6.7769 v 6.7804 prior (strongest level since February 8th, 2023).

-(CN) China plans to allow the $568B social security fund to access the Southbound Bond Connect program.

-(CN) China auctions 2-month and 3-month bills.

-(CN) China sells 50-year special sovereign bonds.

-(CN) China PBOC Open Market Operation (OMO): Sells CNY0B in 7-day Reverse Repos; Net injects CNY0B v drains CNY4B prior (first straight nil injection, thirteenth time since 2020).

-(CN) 600028.CN Research Unit: China on track to meet peak carbon target before 2030.

-(CN) DEEPSEEK.IPO On Tues, US agencies published an alert warning the top China AI companies have 'systematically' mined cutting-edge AI models from US cos. since 2024 - NBC.

-(HK) JPM: Hong Kong may hike luxury home stamp duty in policy address.

Japan

-(JP) Nikkei 225 opens -0.1% at 65,153.

-(JP) Japan Cabinet reshuffle set for September 17th, 2026 - Asahi.

-(JP) Japan Aug M3 Money Supply Y/Y: 1.2% v 1.3% prior.

-(JP) Japan Defense Min Koizumi said to cancel planned visit to Indonesia - Kyodo.

-(JP) Japan sells ¥3.0T vs. ¥3.0T indicated in 6-Month Bills; Avg Yield: 1.2887% v 1.1753% prior, bid-to-cover: 3.87x v 3.66x prior.

-(JP) Bank of Japan (BOJ) Results related to today's outright bond buying operations.

-(JP) BOJ Outright Bond Purchase Operation for 1~3 Years; 5~10 Years; >25 years; (Inline with planned amounts for Q3, 2026).

-(JP) 285A.JP Follow up: CEO dismisses prospects for closer ties with SK Hynix.

Korea

-(KR) Kospi opens +0.3% at 6,973.

-(KR) South Korea Aug Unemployment Rate: 2.7% v 2.8%e.

-(KR) South Korea Aug Total Bank Lending To Households (KRW): 1,198.3T v 1,194.8T prior.

-(KR) Ex-BoK Governor Rhee: No need to panic over short-term won moves.

-(KR) South Korean Presidential Office: South Korea and France discussed contributions to the Strait of Hormuz security, but not troop deployment

-(KR) Fitch comments on South Korea 2027 budget: 2027 Budget Strengthens Metrics, but Gains May Prove Temporary.

-(KR) Bank of Korea (BOK) sells KRWT in 2-year Monetary Stabilization Bonds (MSB): Avg Yield 3.805% v 2.640% prior.

Other Asia

-(TH) Bank of Thailand (BOT) releases Aug rate meeting minutes: Affirms monetary policy should remain accommodative; sees limited impact from further monetary policy easing.

-(TW) Top US Diplomat in Taiwan: US under Trump Administration has made preserving peace in the Indo-Pacific one of its top priorities; Upcoming US-China summit an opportunity to further advance a relationship of strategic stability, on the basis of fairness and reciprocity, that can avoid misunderstandings and miscalculations.

-(TH) Thailand Central Bank (BOT) Gov Ratanakorn: 2026 GDP growth forecast of 2.3% is too low.

-(TH) Thailand Finance Minister: Plans THB50B for rooftop solar scheme for households.

-(MY) Malaysia July Industrial Production Y/Y: 4.7% v 5.6%e.

-(ID) Indonesia Aug Consumer Confidence: 118.5 v 116.8 prior.

North America

-(US) Treasury Sec Bessent: [Repeats] US bond market performing better than others; Now trying to slow things down in bond market; When we intervene on yen, I have good insight, Have good insight into what BOJ, policymakers will do; With 3% GDP growth, can grow our way out of debt rise.

-(US) White House posts proclamation on Canada tariff scope: Products that will be subject to the import ban in this proclamation that were imported, but not yet entered for consumption, or withdrawn from warehouse for consumption, prior to September 29th, 2026, will remain subject to the 50% duty.

-(US) Transportation Sec Duffy sends letter outlining China concerns over partnerships and criticizing Ford's CEO over ties to China - press [US market close].

-(US) Aug NFIB Small Business Optimism: 98.7 v 99.3e [US market close].

-(US) TREASURY $58B 3-YEAR NOTE AUCTION RESULTS: DRAWS 4.474% V 4.291% PRIOR; BTC: 2.72X V 2.71X PRIOR [US market close].

-(US) JULY CONSUMER CREDIT: $18.1B V $11.7BE [US market close].

-(US) US Secretary of State Rubio: Trump has a desire to reach an agreement with Colombia on tariffs - Travels to Colombia, Ecuador, and Peru [9/8-9/10].

-(US) US steel capacity utilization [week ended Sept. 5th]: 78.3% - AISI.

-(US) SCOTUS declines State of Missouri's bid to use Republican-drawn Congressional map in the November mid-term elections - press.

-(US) Commerce Sec Lutnick reportedly plans to travel to Mexico for trade talks with Sheinbaum and Ebrard tomorrow - Politico.

-(US) Pres. Trump: Wow! The Populist Party in Germany just had a really big night. They finally got tired of the absolu... - post on Truth Social.

-(US) President Trump personally gifted $45,000 to some White House aides - WAPO.

-(US) GOOGL TTN Summary Goldman Conference: Gemini is seeing strong adoption across both large enterprises and small and medium-sized businesses, supporting broader commercial traction for Alphabet’s AI platform. [US market close].

-(US) GOOGL Google, Blackstone venture faces delays at data-center sites - US financial press [citing people familiar with the matter].

-(US) Flexport Inc EU freight market update 10:00 ET conf: Expects a softer remaining Q3 and a weaker-than-normal Q4 peak season on China-Europe airfreight; EU hurdles effective Nov. 1, including an additional fee per e-commerce item/carton, create further headwinds. [US market close].

-(US) F Spokesperson: Pushes back on Sec Duffy's letter, noting the letter's content are 'wrongheaded'.

-(US) ROKU US Department of Justice (DOJ) plans closer scrutiny of Fox's $22B Roku deal - Semafor.

-(US) ANTHROPIC.IPO Anthropic training researcher Jacob Coxon quits over fears that companies are racing to build uncontrollable 'out-of-control AI,' self-improving systems, amid rapid advancements - WSJ [Exclusive].

-(US) BA Follow up: National Transportation Safety Board: Evidence suggests pilots considered aborting landing in Boeing 767 crash in Miami, United States.

-(US) AMZN Amazon: OpenAI is also introducing new enterprise plugins for ChatGPT work, extend Astra's browser-use capabilities across common business applications.

-(US) AAPL To unveil $2,000 foldable iPhone duo at high-stakes event - US financial press.

-(CA) Reportedly USTR's Greer and Canada's LeBlanc to speak today - Canadian radio [US market close].

-(CA) Canada International Trade Minister Leblanc: Assessing the latest tariffs from the United States.

-(CA) Pres. Trump: Directs GSA to REMOVE Canadian-origin products from GSA’s Multiple Award Schedules unless Canada restores full and fair reciprocity for American Farmers and Companies - Truth Social.

-(MX) Mexico's Finance Minister Amador presents budget plan to congress.

-(MX) Mexico Economy Minister: US Secretary of Commerce will be in Mexico City on Wednesday [September 9th, 2026] to meet with President Sheinbaum.

-(CO) US and Colombia sign MOU on critical minerals mining, processing and civil nuclear cooperation.

Europe

-(RU) Kremlin provides readout of Trump/Putin call that lasted one hour; Trump focused on trying to get a swift end to the war in Ukraine; Putin informed Trump that Russia has no hostile plans towards Europe; Discussion was constructive [EU market close].

-(EU) EU and Canada said to be working toward a new, all-encompassing relationship that will range from trade to security - press [US market close].

-(UK) BOE Gov Bailey, Dep Ramsden, Taylor and Greene: Rise in UK mortgage rates is larger than almost anywhere in G7 - Parliamentary testimony [EU market close].

-(UK) ANTHROPIC.IPO Anthropic withheld latest AI model from UK testing agency - FT.

-(DE) Germany Defense Min Pistorius: Ukraine expected to order several thousand IRIS-T missiles [EU market close].

-(NL) Netherlands July Consumer Spending Y/Y: 1.2% v 1.7% prior.

-(SI) Slovenia sells total €78.7M in 3-month, 6-month and 12-month Bills.

Middle East

-(IR) Iran press reports renewed explosions on Kharg Island [US market close].

-(IR) Iranian tanker was targeted and hit by US missile four miles from Kharg Island - Iran press [US market close].

-(IR) US CENTCOM: Confirms forces destroyed five Iranian crude oil carriers, Sept. 8th, after the Islamic Revolutionary Guard Corps (IRGC) targeted a US Navy warship with ballistic missiles twice over the past two days - post on X.

-(IR) Iran targets the Al-Azraq air base in Jordan with missiles in retaliation for US attacks on Iranian oil tankers - FARS.

-(IR) Commodity vessels transiting via Strait of Hormuz of 6 commodity vessels, remaining below the 10-day average [12 commodity vessels] - US financial press.

-(IR) UKMTO: Has received report involving merchant vessel in Strait of Hormuz.

-(SA) Saudi PIF plans to meet with some Wall Street firms later this week, incl Carlyle, KKR, Stonepeak, Apollo, Blackstone, and Brookfield - Semafor [EU market close].

-(QA) Qatar Interior Ministry: Civil defense brought fire on marine vessel at Al Wakra port under control, no injuries.

Levels as of 01:20 ET

Nikkei 225 -0.2%; ASX 200 flat; Hang Seng -0.4%; Shanghai Composite +0.1%; Kospi +1.0%.

Equity S&P500 Futures +0.1%; Nasdaq100 +0.2%; DAX -0.5%; FTSE100 -0.4%.

EUR 1.1635-1.1623; JPY 154.01-153.26; AUD 0.7232-0.7214; NZD 0.5864-0.5847.

Gold +0.7% at $4,384/oz; BTC +0.9% at $79,346; WTI Crude Oil +1.0% at $93.93/bbl; Copper -0.2% at $6.7623/lbs.