Yen hits two-month high as bond yields plummet
Yen rose in European trade against dollar for the fifth straight session, marking two-month highs as US bond yields tumble.
Haven demand is surging on yen as well amid mounting geopolitical tensions around Taiwan ahead of a visit by US officials and Chinese opposition.
USD/JPY fell over 1% to 130.39, the lowest since June 3, after rising 1.2% yesterday, the fourth profit in a row.
US Yields
US 10-year bond yields fell 2.3% on Tuesday on track for the fifth loss in a row, marking four-week lows at 2.516%.
A weaker dollar naturally underpin yen's strong gains as the yield gap widens between Japan and the US.
Traders now expect a more bearish pace by the Fed in tightening policies as the US economy faces recession.
Taiwan Tensions
US officials prepare to visit Taiwan today in an official visit, amid strong opposition by Chinese authorities and US attempts to calm Chinese nerves.
However a deliberately obtuse stance by the US on Taiwan makes it more difficult to ascertain the true purpose of the visit.
China responded by imposing new tariffs on Taiwanese goods, with several Chinese military aeroplanes flying near Taiwanese borders.
Estimates
Analysts now expect yen to move higher against dollar, potentially breaking the 130 barrier and hitting multi-month highs.
Wall Street climbs as August opens up
US stock indices rose as August opened up, while still buoyed from the recent powerful gains in July.
Markets are continuously assessing the Federal Reserve's decision last week to hike rates by 75 basis points to less than 2.50%.
Dow Jones rose 0.1% to 32,848 as of 14:46 GMT, while S&P 500 climbed 0.1% to 4,134, while NASDAQ gained 0.5% to 12,458.
Oil prices decline to two-week lows on global demand concerns
Oil prices skidded in European trade to two-week lows, sharpening losses for the second straight day on concerns about weakening global demand on fuel, especially in the US and China.
Conversely, global oil production is surging to one-month highs with more expected output upcoming.
Global Prices
US crude fell 5.5% to $92.91 a barrel, the lowest since July 14, while Brent shed 4.3% to $99.29 a barrel, the lowest since July 15.
Brent tumbled 3.75% on Friday amid concerns about the US and global economy.
Global Demand
A spate of negative US and Chinese data is casting shadows on global oil demand this year.
The US officially entered recession in the first half of the year, while China's manufacturing PMI fell to 50.4 in July from 51.7 in June.
US output
Official US data showed US output rose by 200 thousand bpd to a total of 12.1 million barrels, a month-high.
This is the highest US oil output since April 2020.