The yen slumped after Japanese Prime Minister Ishiba resigned under party pressure, with USD/JPY and crosses hitting multi-month highs. Revised Japan GDP showed stronger-than-expected growth, while China’s August trade data disappointed, led by a sharp drop in exports to the U.S.
Japan PM Ishiba resigns, yen falls:
- Yen is off to a weak start with the resignation of Japanese Prime Minister Ishiba
- Japanese media reports that the ruling party leadership election could be in early October
- Yen may weaken as Japan leadership change clouds BOJ outlook, MUFG says
Other:
- China's August yuan terms exports +4.8% y/y (prior +8.0%) (+4.4% in USD terms)
- Monday - Xi, Putin to attend BRICS trade summit on U.S. tariffs; Modi skips
- Trump Fed candidate Hassett stresses central bank independence from politics
- China - Shenzhen lifts home-buying limits across key districts
- Japan sells 0.6 trillion yen in JGBs at enhanced-liquidity auction
- Citigroup and Nomura warn that the PBOC may refrain from lowering interest rates, RRR
- PBOC sets USD/ CNY reference rate for today at 7.1029 (vs. estimate at 7.1317)
- Goldman Sachs says it keeps its Brent/WTI price forecast unchanged for 2025
- Trump to foreign firms: Respect U.S. immigration laws, train American workers
- Japan’s Q2 GDP revised higher to 2.2%, fifth straight quarter of growth - recap
- Japan's Topix has risen to its highest ever
- Japan Q2 GDP: +0.5% q/q (preliminary was +0.3%)
- UK pay settlements hit lowest since 2021 as hiring and wages weaken
- Trump says not happy with Russia-Ukraine 'situation' - EU leaders coming to the US Mon/Tue
- SNB sets high bar for negative rates as Schlegel warns of side effects
- El Salvador buys gold for first time since 1990 to diversify reserves (away from Bitcoin)
- USD/JPY - we got a gap to fill!
- USD/JPY update, around 148.10. ICYMI, JPY slammed lower after Japan PM Ishiba resigned
- China to reopen bond market to Russian energy firms amid deepening ties
- China eyes offshore RMB stablecoin to accelerate yuan internationalization
- OPEC+ to raise oil output in October as Saudi pushes market-share strategy
- China adds gold for 10th month as bullion surges past $3,500 an ounce
- Weekend - Czech central bank signals longer restrictive policy to curb inflation risks
- Monday open levels, indicative FX prices, 8 September '25. Japan PM Ishiba quit, yen lower
- Newsquawk Week Ahead: US CPI, BLS revisions, ECB, OPEC, French Vote, China CPI, Japan GDP
The big market mover from the weekend was the resignation of Japanese Prime Minister Ishiba, who stepped down under heavy pressure from his party after a historic election defeat. Ishiba, who came to power in October 2024, saw his coalition lose its majorities in both the lower and upper houses of parliament.
The yen gapped lower in thin early Asia trading, with USD/JPY and crosses jumping before liquidity built in Tokyo, Hong Kong and Singapore pushed it weaker still. EUR/JPY and GBP/JPY touched fresh 12-month highs, while USD/JPY climbed as far as 148.57 before easing back towards 148.00. While some gap-filling is possible, political uncertainty is likely to keep the yen under pressure and the Bank of Japan sidelined until a new leader is in place. The leadership election is expected in early October, with the firm date to be announced Tuesday. Japanese equities gained on the news.
On the data front, revised GDP showed the economy expanding at a stronger-than-expected 2.2% annualised pace in Q2 (0.5% q/q), up from the 1.0% preliminary estimate. The upgrade reflected firmer private consumption and marked a fifth consecutive quarter of growth.
From China, August trade data revealed exports rising but missing expectations, with year-on-year growth the slowest since February. Shipments to the U.S. plunged 33% y/y, underscoring the drag from tariffs.
Apart from yen moves, other major FX pairs traded relatively quietly.
Asia-Pac stocks:
- Japan (Nikkei 225) +1.5% (Japan's TOPIX index hit a record high)
- Hong Kong (Hang Seng) +0.35%
- Shanghai Composite +0.11%
- Australia (S&P/ASX 200) -0.27%
