The Japanese yen strengthened after comments from President Trump expressing concern about the currency's weakness, with Japanese Minister Kiuchi adding that Abenomics is over and super-low interest rates are no longer needed. The yen had been weakening toward levels that prompted reported verbal intervention at the back end of last week, and the remarks gave it a boost. The problem for the Bank of Japan is that even as it finally sounds more aggressive on its hiking cycle, the Fed and the ECB are also tightening, and if the BOJ hikes only once a quarter while others move faster, that will not help the yen or Japan's effort to avoid falling behind the curve. In Asia, Hong Kong stocks fell as markets judged the Trump-Xi summit delivered only the bare minimum, with a trade truce extension and niceties but few concrete deals so far. In bonds, rising real yields and energy price swings are weighing on the market, and with more supply coming, pressure for rates to go higher may continue unless oil prices fall.
Yen strengthens on Trump's concern over yen weakness and Kiuchi saying Abenomics is over and super-low rates no longer needed.
BOJ seen lagging peers on hiking while Fed/ECB tighten and rising real yields plus more supply push JGB yields higher.
