July 31: Rates Reprice Higher

研报英文原文证据摘录

July 31: Rates Reprice Higher

UpdateMterm monetization and those facing open-ended spending requirements. The

VIX declined 6.4% to 15.99, suggesting that the equity rebound reduced

immediate hedging demand despite elevated cross-market volatility. Gold

fell 1.4% and silver declined 2.4% as higher real yields offset the modest

weakening in the dollar.

• The dollar weakened slightly (DXY: -0.1%), while JPY led G10 gains

following further indications of official support (USD/JPY: -1.3%). Japan

was estimated to have purchased approximately $53bn of yen on Thursday,

and US banks were reportedly asked by the New York Fed to check EUR/JPY

rates on Friday, increasing speculation around coordinated action. USD/JPY

fell to 157.40 after trading as high as 160.88, while yen futures volumes

remained elevated after reaching a 12-year high in the prior session. The BoJ

held its policy rate at 1%, but Governor Ueda emphasized upside inflation

risks, the stronger transmission of FX moves into prices, and the possibility

of accelerating hikes if financial conditions became too accommodative.

• JGBs initially opened weaker in the Tokyo session, tracking the rise in U.S.

Treasury yields overnight. While selling pressure eased ahead of the BoJ

policy announcement, the short-end remained elevated amid concerns that

the BoJ could adopt a more hawkish stance following the suspected FX

intervention overnight, whereas the super-long sector remained firm. The BoJ

MPM statement and Outlook Report were not materially more hawkish than

market expectations, and the initial market reaction was muted, leaving the

market without a clear direction. Movements in the short-end were relatively

modest, while sectors beyond five years steepened. As a result, the 2y JGB