01/09/2026
Geopolitical tensions have flared up again, driving oil prices higher and stoking inflation concerns alongside expectations of further monetary‑policy tightening. Asian bonds moved lower in tandem with US Treasury securities.
Government bond prices in Japan, Australia and New Zealand fell, after the benchmark 10‑year US Treasury yield rose 2 basis points to 4.77%, hitting its highest level since January 2025. Japan’s 10‑year government‑bond yield climbed to 2.965%, having touched a 30‑year peak in the prior trading session.
Renewed hostilities in the Middle East pushed Brent crude to extend its rally during Asian morning trade, briefly breaking above $91 per barrel. The United States and Iran exchanged fire for the first time in nearly a month: US forces struck an island in the Strait of Hormuz, and Iran retaliated with attacks targeting the United Arab Emirates and Jordan.
Meanwhile, the MSCI Asia Pacific Index was little changed, with market focus centred on the technology sector following Nvidia’s announcement of a $3.5‑billion investment in MediaTek to deepen ties with the Taiwan‑based chipmaker.
Escalating Middle‑East tensions dimmed prospects for normalised shipping through the Strait of Hormuz, lifting oil prices and amplifying inflation worries. After Federal Reserve Chair Kevin Walsh reaffirmed his resolve to bring down inflation at last week’s Jackson Hole symposium, money‑market bets on a September rate hike increased, and investors are now closely watching this week’s jobs report.
August US non‑farm payrolls are projected to reflect overall labour‑market stability, which would allow the Federal Reserve to keep its focus firmly on inflation.
Andrew Taylor of JPMorgan described Friday’s jobs report as “critical”. Even so, given Walsh’s view that the US economy has reached full employment, the consumer‑price index release due on 11 September will carry greater weight. He has adopted a “strategically cautious” stance on US equities in the near term, yet expects supportive conditions to persist, underpinned by economic data and corporate earnings.
Elsewhere across commodities, gold recouped part of its losses from the past two days and traded around $4,460 per ounce. Higher interest rates weigh on the non‑yielding metal, even so gold still posted a roughly 9.7% gain for August. The Bloomberg Dollar Spot Index fell for a second consecutive day on Tuesday.
In Asia, traders are keeping a close eye on the yen. With USD/JPY hovering near the 160 threshold, risks are rising that authorities will step in once more to slow the currency’s depreciation.
Though the yen strengthened modestly on Tuesday, it has given back more than half of the gains generated by record‑breaking official intervention since late July.
According to NHK, US Treasury Secretary Scott Bessent told Japanese Finance Minister Mayu Katayama and Bank of Japan Governor Kazuo Ueda that further interest‑rate hikes were warranted. Japan’s 10‑year bond yield closed just 6 basis points below 3% on Monday, a level not seen since 1996.
[Disclaimer] Forex trading involves risk; please invest with caution. This content is for informational purposes and objective analysis only, and does not constitute any investment advice, basis for buying/selling, or guarantee of returns. Investors should make independent decisions based on their own financial situation and risk tolerance, and bear their own investment risks.
Related Posts
