Gold steadies at near two-week high as investors weigh Fed rate-cut bets

Gold prices remained steady on Thursday after hitting a more than one-week high in the previous session, as market participants weighed the possibility of an interest rate cut in December amid conflicting signals from the US Federal Reserve.

FUNDAMENTALS

* Spot gold was steady at USD 4,162.98 per ounce, as of 0047 GMT. US gold futures for December delivery fell 0.1% to USD 4,158.60 per ounce.

* Conflicting signals on the timing and magnitude of interest rate cuts have accelerated hedging flows into swaptions and derivatives tied to overnight rates, with investors seeking protection against heightened policy uncertainty.

* Some Fed officials, led by New York Fed President John Williams and Governor Christopher Waller, have stated a December rate cut may be warranted due to labor market weakness putting downward pressure on Treasury yields and reinforcing dovish bets in futures markets.

* Benchmark 10-year Treasury yields held near one-month lows in the previous session.

* Their stance, however, contrasted with several regional Fed presidents advocating a pause in easing until inflation shows a more convincing move toward the 2% target.

* Meanwhile, Kevin Hassett, who has emerged as a frontrunner to replace Jerome Powell as Fed Chair, like US President Donald Trump, has said interest rates should be lower.

* US rate futures are pricing in an 85% chance of a rate cut in December, according to the CME’s FedWatch tool.

* Non-yielding gold tends to perform well in low-interest-rate environments.

* Data on Wednesday showed that the number of Americans filing new applications for unemployment benefits fell last week, though the labor market is struggling to generate enough jobs for those out of work.

* US consumer confidence also weakened in November as households grew more concerned about jobs and their financial outlook.

* Elsewhere, spot silver was flat at USD 53.34 per ounce, platinum fell 0.3% to USD 1,583.94, and palladium lost 0.4% to USD 1,417.56.

(Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich)

Stocks rise on US rate cut hopes, yen still in intervention zone

SINGAPORE – Asian stocks rose on Thursday, and the dollar was soft on growing expectations of an interest rate cut from the Federal Reserve next month, while the yen stayed in the spotlight, with traders weighing the prospect of a rate hike before the end of the year.

A holiday-curtailed week has led to limited moves across markets, with stocks keeping a largely upbeat tone and currencies much more sedate. The US markets are closed for the Thanksgiving holiday on Thursday and are due to trade for a short session on Friday.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.27% higher, tracking gains from Wall Street and on course to snap a three-week losing streak. Japan’s Nikkei and South Korea’s Kospi surged over 1%.

Investor focus will also be on the Chinese property sector as property developer China Vanke seeks bondholder approval to delay the repayment of a 2 billion yuan (USD 282.6 million) onshore bond.

A public bond extension would be the first for the state-backed property developer, a household name with many projects in China’s biggest cities and could trigger a new wave of anxiety in both financial and property markets.

SURGING RATE CUT WAGERS

While the US data flow has resumed since the record 43-day government shutdown ended mid-November, most of the economic reports issued so far have been significantly dated and have offered very little insight into the health of the economy.

That has turned investors’ attention squarely on comments from Fed officials to gauge the US monetary policy path, with comments this week from San Francisco Federal Reserve Bank President Mary Daly and Fed Governor Christopher Waller boosting expectations of a rate cut.

Traders are now pricing in an 85% chance of a rate cut next month compared with just 30% a week earlier, CME FedWatch showed.

George Boubouras, managing director of K2 Asset Management, said there is enough on the labour market weakness to offset the current inflation pulse, with a December rate cut on balance looking reasonable.

“While core inflation is above target, the US 10-year breakeven inflation rate around 2.25% suggests that markets are broadly comfortable that inflation expectations remain reasonable. In the short-term, USD weakness is expected to persist but to be reversed in the March quarter 2026.”

The euro rose to its highest in more than a week at 1.16045 in early trading. The dollar index, which measures the US currency against six rivals, was little changed at 99.523, after dropping 0.28% on the previous day.

Data on Wednesday showed the number of Americans filing new applications for unemployment benefits fell to a seven-month low last week, suggesting layoffs remained low.

Sterling rose to USD 1.3247, a one-month high, after UK finance minister Rachel Reeves’ budget helped alleviate some concern about Britain’s long-term finances.

YEN WATCH

The Japanese yen strengthened a bit to 156.16 per dollar as investors kept an eye on possible intervention from Tokyo after weeks of verbal jawboning from authorities to stem the currency’s relentless slide.

Prime Minister Sanae Takaichi ruled out on Wednesday the possibility that Japan could face a British-style “Truss moment”, or loss of market confidence stemming from her expansionary fiscal policy.

The Japanese currency has weakened by nearly 10 yen since the start of October as Takaichi took over the helm amid worries the administration’s spending plans will need heavy borrowing, and on doubts over the timing of the next rate hike from the Bank of Japan.

Sources told Reuters that the BOJ is preparing markets for a possible rate hike as soon as next month, as it may take a more consistent rate hike path to alter the trajectory of the currency.

Bitcoin was back above USD 90,000 on Thursday, on track to snap a four-week losing streak with a nearly 3% gain. Gold was flat at USD 4,164.81 per ounce, after rising 0.8% in the previous session.

(Reporting by Ankur Banerjee in Singapore; Editing by Shri Navaratnam)

Global stocks to edge higher in 2026 but lag this year’s strong run

BENGALURU – Most major global stock indexes should trade higher by the end of 2026 but will struggle to repeat this year’s surprisingly strong performance, according to a Reuters poll of equity strategists, with over half expecting a correction in the coming months.

In April when the White House suddenly imposed sweeping tariffs not seen since the 1930s, the move sent the benchmark US S&P 500 tumbling over 10%. Since then the index has recovered all of its losses and is up around 40% with tech and artificial intelligence stocks leading the charge.

But, as many of those trade restrictions remain in place, there are plenty of risks ahead for the global economy and, by extension, stock markets, particularly of a potential sell-off in AI shares that could spill into broader market sentiment.

A 56% majority of analysts, 49 of 87, in the November 13-25 poll said a correction in most of the 15 global stock indexes surveyed was likely or very likely, while 38 participants said it was unlikely, including six that viewed such an event as very unlikely.

Back at the start of the year, a slightly smaller majority of analysts had expected a correction to hit stock prices in three months.

“This year’s strong gains will be difficult to replicate … This suggests slower returns and potentially higher volatility in 2026,” said Angelo Kourkafas, senior global investment strategist at Edward Jones.

Twelve of 15 global stock indexes surveyed will post fewer gains in 2026 than they have so far this year, poll medians showed.

Although India’s BSE, NSE, and France’s CAC 40 were expected to notch slightly higher gains over the next 12 months, the projected outperformance was just a modest 1% or less.

Meanwhile, fueled by gains in technology stocks – and especially AI-related companies – the S&P 500, which is up 14% for this year, will rise 11.7% from its current levels to 7,490 by the end of 2026, the sample’s median estimate showed.

However, lofty technology valuations and an exuberance over the AI trade are pressuring stocks as market valuations approach their highest since the dot-com bubble 25 years ago, according to LSEG Datastream.

“Investors appear to have grown complacent – after all, things have gone well so far. But this is precisely where the danger lies for markets. Ignoring risks doesn’t make them disappear,” said Berndt Fernow, deputy director at LBBW.

“From an investor’s perspective, another source of concern is the unprecedented concentration of market capitalization in just a few AI-driven companies.”

An improving economic environment, combined with still low valuations relative to the US, is expected to help European shares repeat this year’s strong gains in 2026.

The pan-European STOXX 600 index is expected to rise to 623 points by the end of 2026, gaining around 11%. The index has rallied 10.9% this year.

“We currently see a more favorable situation in Europe than the US, primarily due to lower concentration risks. Unlike the US, where relatively few mega-cap stocks dominate the main indices, Europe currently offers a broader and more diversified set of investment opportunities,” said Michael Heldmann, chief investment officer, systematic equity at Allianz Global Investors.

In Asia, Japan’s Nikkei, which has had a stellar run with the index gaining nearly 22% in 2025, is expected to rise 13% in 2026 on strong corporate earnings and economic growth driven by Prime Minister Sanae Takaichi’s government stimulus.

India’s benchmark BSE Sensex is predicted to rise 9% from current levels to reach a record high of 92,400 by the end of 2026 on strong domestic investor demand.

Canada’s main stock index was forecast to gain about 5% to reach another all-time high next year, but that would be well short of this year’s near 24% rise.

(Reporting by Hari Kishan; additional reporting and polling by correspondents in Bengaluru, Buenos Aires, London, Mexico City, Milan, New York, San Francisco, Sao Paulo, Tokyo, and Toronto; editing by Mark Heinrich)

Yields drop as bond market anticipates dovish Fed tilt

NEW YORK – US Treasury yields fell on Tuesday for a fourth straight session as data reinforced expectations the Federal Reserve will cut interest rates next month, with the rally accelerating on a report that White House economic adviser Kevin Hassett has emerged as the leading contender to become the next Fed chair.

Some of the economic data releases, including retail sales and producer prices data for September, had been delayed by the 43-day government shutdown, leaving some investors skeptical about their reliability in providing a picture of US economic health. Others saw the figures as confirming a general trend of slowing economic momentum, with price pressures remaining sticky.

“There’s no real trade here, because this September data is not going to change the picture much here,” said Slawomir Soroczynski, head of fixed income at Crown Agents Investment Management.

US retail sales rose 0.2% in September, slowing from August’s unrevised 0.6% gain and coming in below economists’ expectations for a 0.4% increase, the Commerce Department said on Tuesday.

Separately, the Labor Department reported that the Producer Price Index for final demand increased 0.3% in September, in line with forecasts, following an unrevised 0.1% decline in August. On a year-on-year basis, the PPI rose 2.7%, matching August’s increase.

“It’s not just that (the data) is old, it really wasn’t much of a surprise to move the needle,” said Jack Ablin, chief investment strategist at Cresset. “In fact, in many respects, it confirmed what a lot of economists and investors suspect, and that is that spending is weakening, but prices are still pretty persistent,” he added.

DOVISH TILT, STEEPER CURVE

A Bloomberg news report that Hassett could replace Jerome Powell when his Fed chairmanship ends in May next year boosted expectations of a dovish Fed tilt, even if the White House said any discussion on the new chair remained speculative until a final decision.

The yield curve steepened on the news, said Tom di Galoma, managing director at Mischler Financial Group. “The market rallied, and the front end led … he (Hassett) has been saying over and over that rates are too high.”

US Treasury Secretary Scott Bessent said on Tuesday he was concluding a second round of interviews later in the day for a new Fed leader, and there was a good chance President Donald Trump would announce his pick before Christmas.

Rates future traders were assigning an 85% probability to an interest rate cut by the Fed next month, in line with Monday and up from 50% a week ago, CME Group data showed.

The rate cut expectations had gained consensus after comments from Fed officials in recent days favoring further easing by the central bank.

Benchmark 10-year yields were last at 4%, over three basis points lower than on Monday and at their lowest in almost one month. They went below 4% during the session for the first time since late October.

Two-year yields, which more closely reflect market expectations on changes in monetary policy, were last at 3.461%, over four basis points lower on the day and at their lowest since October 24.

The curve comparing two- and 10-year yields steepened to 54 basis points from 53 on Monday, due to two-year Treasuries rallying more than the 10-year securities.

FIVE-YEAR AUCTION TAILS

A USD 70 billion five-year notes auction on Tuesday was met with tepid demand, partly because it came after the rally extension triggered by the Hassett headline, said di Galoma at Mischler.

The notes were sold with a high yield of 3.562%, which BMO Capital Markets said was half a basis point above the market at the bidding deadline, indicating investors demanded a small premium to absorb the issuance.

(Reporting by Davide Barbuscia, Editing by Nick Zieminski)

US tech valuations stretched further as earnings contribute less

US tech companies’ share of S&P 500 earnings has been slipping even as their contribution to the index’s market value remains near multi-decade highs, raising concerns that their prices are further removed from underlying profit trends.

According to a Reuters analysis, tech companies accounted for 20.8% of the S&P 500’s total earnings in the third quarter, down from 22.8% three quarters earlier. At the same time, their share of the index’s market capitalization rose to 31.1% as of Friday, compared with about 30% at the start of the year.

Analysts warn that this disconnect, combined with the sector’s outsized weight in passive portfolios, could magnify any disappointment in earnings and trigger broader index-level declines.

“The wider gap between the tech sector’s percentage in the S&P 500 market cap is partly justified by genuine future earnings power and FCF (free cash flow) growth, but not entirely,” said Illia Kyslytskyi, head of research at Yaru Investments.

Tech stocks have driven the market to fresh record highs on expectations that AI will generate outsized profits, leaving valuations increasingly dependent on rapid earnings growth.

The tech-heavy Nasdaq Composite Index was trading at a forward P/E of 29.28 based on current-year earnings estimates, well above its 10-year average of 23.48 and higher than the S&P 500’s 24.35.

Although the tech sector delivered strong profits in the September quarter, led by AI names such as Nvidia, some analysts said the outlook for future earnings hinges on how effectively AI translates into revenue for clients, and how efficiently providers deploy their spending.

Alexander Lis, chief investment officer at Social Discover Ventures, said the so-called “Magnificent 7” tech stocks saw margins temporarily boosted by AI-related capex, with suppliers booking revenue upfront, suggesting profitability could normalise as spending slows.

The Nasdaq index is up 18.4% so far this year but has fallen over 3.5% this month.

Derek Izuel, portfolio manager at Shelton Capital Management, said tech stocks could see a mid-single-digit pullback if earnings fail to keep pace with valuations.

“A more severe pullback that results in the risk premium back to normal would be closer to a double-digit decline.”

(Reporting By Patturaja Murugaboopathy; with additional reporting by Gaurav Dogra in Bengaluru; Editing by Vidya Ranganathan)

Nikkei to rise about 7% by mid-2026 on corporate earnings, economic stimulus

TOKYO, Nov 26 (Reuters) – Japan’s Nikkei share average is seen rising about 7% by June next year, supported by strong corporate earnings and economic growth driven by Prime Minister Sanae Takaichi’s government stimulus.

The cabinet last week approved a 21.3 trillion yen (USD 136 billion) economic stimulus package, the largest since the COVID-19 pandemic, to help households cope with persistent inflation.

Since Takaichi took office last month, expectations for aggressive economic stimulus have driven sharp gains in Japanese equities. In October, the Nikkei crossed the 50,000 mark for the first time and climbed 16.64%, its biggest monthly gain in 35 years.

Super-long bond yields have recently hit record highs and the Japanese currency 10-month lows. The Nikkei hit an intraday record high of 52,636.87 on November 4, but has since eased back.

The index is forecast to trade at 52,000 at the end of June in 2026, according to the median estimate of 16 analysts polled November 13-25, from Tuesday’s close of 48,660.

It is forecast to exceed all-time highs marked this month by the end of next year, rising to 55,000, up about 13%.

“The rally in October was too fast, and there was a risk of retreat,” said Kazunori Tatebe, chief strategist at Daiwa Asset Management.

“But the fundamentals have not worsened, and the market will continue to see positive market-moving cues, such as inflation, governance reforms, and corporate share buybacks”.

The index retreated from its peak in recent sessions as US stocks lost ground on divided views on the Federal Reserve’s rate path and concerns over valuations of artificial intelligence-related technology shares.

The latest Nikkei rally was supported by a few beneficiaries of the AI sector, such as chip-related Advantest and Tokyo Electron, as well as technology investor SoftBank Group.

Some strategists said there was a chance of a correction of more than 10% in the Nikkei in the next three months.

“The US market could fall as it is in the transition from the liquidity-driven market to profit-driven,” said Hiroshi Namioka, chief strategist at T&D Asset Management. “That decline may affect the Japanese market.”

(USD 1 = 156.7100 yen)

(Reporting by Junko Fujita; Additional reporting by Rocky Swift; Polling by Aman Kumar Soni and Jaiganesh Mahesh; Editing by Ross Finley and Louise Heavens)

Bitcoin on thin ice after sinking in flight from risk

SINGAPORE/LONDON — Bitcoin dropped to a seven-month low on Friday, closing in on the USD 80,000 level below which some analysts say much heavier losses are likely for the world’s largest cryptocurrency.

Bitcoin fell to USD 80,553, and ether hit a four-month low, as cryptocurrencies led a broad flight from riskier assets, spurred by investor worries over lofty tech valuations and uncertainty over near-term U.S. interest rate cuts.

Cryptocurrencies are often viewed as a barometer of risk appetite and their slide highlights how fragile the mood in markets has turned in recent days, with high-flying artificial intelligence stocks tumbling and volatility spiking.

Bitcoin is down 12% for the week. Its slide follows a stellar run this year that propelled it to a record high above USD 120,000 in October, buoyed by favorable regulatory changes towards crypto assets globally.

But analysts say the market remains scarred by a record single-day slump last month that saw more than USD 19 billion of positions liquidated.

As it plunged through USD 100,000 last week and headed for USD 80,000 on Friday, some analysts said bitcoin was reaching levels that corporate and institutional investors on average paid for their tokens, and where they might have to sell to prevent losses.

Bitcoin has erased all its year-to-date gains and is now down 12% for the year, while ether has lost close to 19%.

“If it’s telling a story about risk sentiment as a whole, then things could start to get really, really ugly, and that’s the concern now,” Tony Sycamore, a market analyst at IG, said of the fall in bitcoin.

Crypto Treasuries

The plunge on Friday will compound problems for so-called crypto treasury companies, which have been big buyers of bitcoin and other cryptocurrencies this year.

These companies hold the crypto on their balance sheets in the hope the price rises. Standard Chartered has estimated that a drop below USD 90,000 for bitcoin could leave half of these companies’ holdings “underwater” – a term which typically refers to holding assets worth less than what was paid for them.

Analysts say the companies could be forced to raise new funds or sell down their crypto holdings, putting further downward pressure on prices.

Listed companies collectively hold 4% of all the bitcoin in circulation, and 3.1% of ether, Standard Chartered estimates.

“The procyclical nature of bitcoin treasury companies is fully obvious now, if it wasn’t obvious six months ago,” Brent Donnelly, president at analytics firm Spectra Markets, said in a note.

“They buy high and now some of them are selling low.”

Citi analyst Alex Saunders said USD 80,000 would be an important level as it is around the average level of bitcoin holdings in exchange-traded funds.

About USD 1.2 trillion has been wiped off the market value of all cryptocurrencies in the past six weeks, according to market tracker CoinGecko.

Shares in the bitcoin buyers soared earlier this year but have fallen sharply in recent months. Strategy, the biggest of the treasury firms, has seen its shares tank 61% since a July peak, leaving them down nearly 40% year-to-date.

JP Morgan said in a note this week that Strategy could be excluded from some MSCI equity indexes, which could spark forced selling by funds that track them.

Japanese peer Metaplanet has tumbled about 80% from a June peak.

Donnelly notes that bitcoin selloffs in 2018 and 2022 saw prices drop around 75% to 80%, which if repeated could see a plunge to as low as USD 25,000.

“I am not saying we are in crypto winter. Just offering a reminder that 75%/80% drawdowns have been part of the game in bitcoin,” he wrote.

(Reporting by Rae Wee, Niket Nishant and Vidya Ranganathan. Editing by Kevin Buckland and Mark Potter)

Asian stocks sink as US jobs fail to clear rate outlook, tech hammered

SYDNEY – Asian shares extended a global rout on Friday as the much anticipated US jobs data failed to provide clarity on interest rates, with investors returning to dumping riskier assets even after Nvidia’s earnings dazzled.

Japan’s Nikkei tumbled 2% on Friday, Australia’s resources-heavy shares slid 1.4%, while South Korea plunged almost 4%.

Wall Street dived overnight as jitters over inflated tech stock prices returned after temporary relief from Nvidia’s stellar forecasts, resulting in the Nasdaq’s widest one-day swing since April 9 when President Donald Trump’s “Liberation Day” tariffs spooked markets.

Data showed the US economy added more jobs than expected in September, but a rise in the unemployment rate and downward revisions to prior months painted an ambiguous picture for the Federal Reserve as it considers whether a cut in interest rates is needed next month to bolster the labor market.

Treasury yields fell as futures moved to imply a 40% probability of a US rate cut in December, up from 30% a day earlier, but still not enough to convince investors of a December move, with the next payrolls numbers available only after the Fed meeting.

“The markets had plenty to be positive about and initially Nvidia’s banging quarterly results meant Wall Street burst out of the gates. The US jobs data was probably as good as you could have hoped for too,” said Kyle Rodda, a senior analyst at Capital.com.

“However, the momentum simply was not there to carry the rally through, with the passing of two critical risk events – both with positive outcomes, no less – not enough to kill the bearishness gripping the markets currently.”

There are now more concerns about financial market stability among Fed officials, including the potential for a sharp drop in asset prices, as they debate when and even whether to cut interest rates further.

Cleveland Fed President Beth Hammack warned on Thursday that cutting rates further right now carries a wide range of risks for the economy. Fed Governor Lisa Cook sees a risk of outsized asset price declines.

In the currency markets, the dollar jumped on the risk-sensitive commodity currencies, hitting a three-month high on the Aussie and a fresh seven-month top on the kiwi.

It was steady at 157.50 yen, after scaling a new 10-month peak of 157.9 overnight, as traders stayed on high alert for intervention from Japanese authorities given the yen’s recent rapid fall.

Data showed Japan’s core consumer prices rose 3% in October, keeping alive expectations of a near-term interest rate hike. However, prospects of economic stimulus from Japan’s new government, led by Prime Minister Sanae Takaichi, have undermined the yen.

The government is set to unveil an economic stimulus package worth over 20 trillion yen, the biggest since COVID-19, on Friday.

Treasuries rose overnight as investors raised bets for a Fed cut next month. Two-year Treasury yields slipped 1 basis point to 3.545%, having fallen 4 basis points overnight, while the 10-year yield was steady at 4.092%, after easing 3 bps overnight.

Oil prices fell in early trade. US West Texas Intermediate crude dropped 0.9% to USD 58.47, and was down 2.7% this week.

Spot gold prices were flat at USD 4,077 per ounce, having been little moved overnight.

(Reporting by Stella Qiu; Editing by Shri Navaratnam)

Dollar set for weekly gain as Fed cut bets recede; yen intervention eyed

SINGAPORE – The dollar was on track for its best week in over a month on Friday as investors wagered the Federal Reserve is unlikely to cut rates next month, with the case for further easing made no clearer by a confounding US jobs report.

The yen briefly popped higher on Friday after Japanese Finance Minister Satsuki Katayama said intervention was a possibility in dealing with excessively volatile and speculative moves, in an escalation of jawboning from Tokyo to stem a sliding currency.

The release of the delayed US nonfarm payrolls report on Thursday painted a mixed picture of the country’s labor market, showing employment growth accelerated in September, but the jobless rate rose to 4.4%, its highest level in four years.

That reinforced the view that the Fed is likely to hold off on cutting rates at its December meeting, as policymakers continue to sail through an economic fog brought about by the US government shutdown.

Against the dollar, the euro was pinned near a two-week low and last bought USD 1.1528, on track for a weekly decline of 0.8%.

Sterling rose 0.11% to USD 1.3084, though was set to lose 0.7% for the week, with investors also anxiously awaiting Britain’s upcoming budget in a major test for the nation’s currency and bond markets.

The dollar index, which measures the greenback against a basket of peers, flirted with a 5-1/2-month peak and last stood at 100.20. It was on track to clock a weekly gain of 0.9%, its best performance in over a month.

“The shutdown-delayed September jobs report did not provide clarity on what the FOMC will do at its much-debated December meeting,” said economists at Wells Fargo in a note.

“We remain of the view that what the Fed should do is cut the federal funds rate by 25 bps… That said, what the Fed will do is a separate debate entirely,” said the economists, who added that their call for lowering rates in December was a “close” one and that a hold “would not surprise us at this point”.

Markets are now pricing in just a 27% chance of the Fed easing rates next month.

In other currencies, the Australian dollar was up 0.09% at USD 0.6446, after sliding 0.6% overnight on a broad risk-off mood in markets.

The New Zealand dollar rose 0.11% to USD 0.5588, having also lost 0.4% on Thursday.

TUMBLING YEN RAISES INTERVENTION THREAT

Much of the focus in the currency market this week has been on a sliding yen, which has plumbed fresh lows as investors fret about the nation’s worsening fiscal position brought about by Prime Minister Sanae Takaichi’s lavish stimulus package.

The cabinet plans to approve the package set to be worth some 21.3 trillion yen (USD 135.29 billion) later on Friday.

“At the very heart the problem is politicians making promises to electorates which defy economic reality,” said James Athey, a fixed income portfolio manager at Marlborough in London, referring to the steep selloff in Japanese bonds and the currency this week.

The yen languished near a 10-month low and was last at 157.33 per dollar, having bottomed at 157.90 in the previous session. It was set to lose nearly 2% for the week, its worst performance in over a month.

“The elephant in the room now is mounting intervention risks,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho. “Interventions are likely to be opportunistic and short-lived. Essentially, speed bumps, not barricades.”

Tokyo last spent 5.53 trillion yen, or nearly USD 37 billion, in July 2024 intervening in the foreign exchange market to haul the yen away from 38-year lows.

Separately, data on Friday showed Japan’s core consumer prices rose 3.0% in October from a year earlier, staying above the central bank’s 2% target and keeping alive expectations of a near-term interest rate hike.

(USD 1 = 157.4400 yen)

(Reporting by Rae Wee; Editing by Jamie Freed)

US yields drop as unemployment rises in September

NEW YORK – US Treasury yields fell on Thursday after data showed that the US unemployment rate rose in September even as employers added more jobs than economists had expected during the month, with traders now seeing an increasing chance of a Federal Reserve rate cut in December.

Nonfarm payrolls increased by 119,000 jobs in September. Economists polled by Reuters had forecast 50,000 jobs would be added. The unemployment rate rose to 4.4%, from 4.3% in August.

“Depending on your priors from the Fed, it probably gives both the hawks and the doves something to confirm what they thought,” said Jan Nevruzi, US rates strategist at TD Securities in New York.

Treasuries rallied, however, with yields falling, as traders brought the pricing of a December rate cut back closer to 50-50, he said.

Traders have repriced for falling odds of a December rate cut in the past week as many Fed policymakers express concerns about further easing due to still elevated inflation.

Fed funds futures traders are now pricing in a 39% chance of a December rate cut, up from 30% on Wednesday, according to the CME Group’s FedWatch Tool.

The 2-year note yield, which typically moves in step with Fed rate expectations, was last down 3.8 basis points on the day at 3.56%. The yield on benchmark US 10-year notes fell 2.1 basis points to 4.11%.

The two-year, 10-year Treasury yield curve steepened to 54.8 basis points.

Other data on Thursday showed that the number of Americans filing new applications for unemployment benefits fell last week.

The federal government is pushing out delayed economic reports after reopening last week from a record 43-day shutdown. The data fog is adding to uncertainty over Fed policy as many policymakers express concerns about further rate cuts due to sticky inflation.

The US Bureau of Labor Statistics said on Wednesday it will release a combined jobs report
for October and November on December 16, after the Fed’s December 9-10 policy meeting. The October data will lack the unemployment rate, however, as it was unable to collect the data during the shutdown.

Minutes from the Fed’s October meeting, released on Wednesday, show that a divided Fed cut interest rate last month even as policymakers cautioned that doing so could risk entrenched inflation and a loss of public trust in the US central bank.

The Treasury will sell USD 19 billion in 10-year Treasury Inflation-Protected Securities on Thursday.

(Reporting by Karen Brettell, editing by Deepa Babington and Chizu Nomiyama )

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