Oil breaks US$100, Wall Street retreats and bond yields rise, inflation is becoming the market’s biggest risk again Global markets are starting Thursday in a more defensive position. Brent crude has broken above US$100 a barrel , U.S. Treasury yields are pushing higher, and Wall Street fell for a third straight session as investors reassess whether central banks may need to keep tightening rather than easing. For Malaysian investors, the key chain today is increasingly clear: Oil → inflation → interest rates → bond yields → USD/MYR → Bursa valuations. 30-second market snapshot Market / Asset Latest 🇺🇸 S&P 500 7,636.36, -0.48% 🇺🇸 Dow Jones 52,380.66, -0.77% 🇺🇸 Nasdaq 26,253.34, -0.64% 🇲🇾 FBM KLCI 1,714.34, virtually flat 💵 USD/MYR ~4.06 🇺🇸 U.S. 10Y Treasury ~4.84% 🇺🇸 U.S. 2Y Treasury ~4.42% 🥇 Gold ~US$4,396/oz 🛢️ Brent crude US$101.21/bbl 🛢️ WTI crude US$96.05/bbl ₿ Bitcoin ~US$79,300 🇯🇵 Nikkei ~64,760, -0.6% this morning Brent jumped about 3.4% Wednesda...
Hedge funds turned bullish on the yen just before dovish comments by Japan’s new prime minister, Shigeru Ishiba, and a robust US jobs report caused the yen’s worst weekly drop since late 2009. Data from the Commodity Futures Trading Commission (CFTC) showed that speculative investors flipped to a net long position on the yen for the first time since mid-August.
Expectations for a more hawkish stance by the new prime minister were upended when Ishiba said Japan wasn't ready for further rate hikes. Additionally, stronger-than-expected US nonfarm payrolls data bolstered demand for the US dollar, leading the market to price out another major Federal Reserve rate cut.
As a result, Japan's currency plunged 4.4% against the dollar last week, marking its worst loss since 2009. With the dollar-yen exchange rate heading toward 150 per dollar, some investors have begun re-loading short yen bets in risky carry trades, reflecting continued bearish sentiment.
Hedge funds were the most bullish on the yen since early 2021, but the surprise economic data and Ishiba's commentary have forced a reevaluation. US inflation data later this week will provide further insight into the Fed's future policy and the yen's trajectory.
Despite the recent selloff, some strategists see this as an opportunity to buy yen, anticipating the Bank of Japan will hike rates next year, which could strengthen the currency. The dollar-yen rate is expected to reach 140 in the second quarter of 2025, according to median forecasts.
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