Global Market Recap: Yen Surge, Middle East Escalation, and Fed Rate Hike Odds

Tuesday, September 8, 2026 | Daily briefing on Yen surge, Gulf energy threats, Fed hike odds, and tech divergence.

Daily Summary

Our view: We expect the rally in the yen to remain at the center of the market today, with the unwinding of the carry trade putting pressure on risk assets, particularly Japanese equities. Oil holding at $97–$98 and the 10-year yield remaining around 4.8% ahead of Friday’s CPI data will likely keep the dollar weak, support gold and copper, and limit Bitcoin within the $77,000–$80,000 range. In the first post-holiday session for US equities, we expect the Dow to lag due to energy and Canadian tariffs, while tech decouples driven by the Asian chip rally.

The yen hit a seven-month high. USD/JPY fell as low as 152.89, breaking below the July intervention level, and now sits at 153.5, gaining 4.5% in a week. Japanese real wages rose 2.4%, the fastest pace since 2021, making a BOJ rate hike next week almost certain. All yen crosses dropped 1.5%–1.7%.

Oil rose for a third consecutive day, with $100 back in conversations. Brent stands at $97.95 and WTI at $93.3, with post-holiday WTI catching up to Brent with a 2% gain. Iran threatened “economic war,” targeting Gulf energy infrastructure. Goldman raised its December Brent forecast to $85.

The probability of a Fed rate hike anchored at 60%. Friday’s nonfarm payrolls came in at 162k (vs. 53k expected). The 10-year yield sits at 4.79%. Thursday’s PPI and Friday’s CPI are the final two data points.

The US dollar trades at a two-week low while copper hits a record high. The Dollar Index sits at 98.8. Copper jumped 2.8% to $6.78, surpassing its 52-week high; Chinese exports grew 25% in August, and the yuan traded at its strongest level in 3.5 years.

Wall Street futures are mixed. Dow futures are down 300 points (-0.6%), while Nasdaq futures are higher; Canada’s $20 billion retaliatory tariffs take effect today, and Trump targeted Bombardier. KOSPI rose for a second day to 7,039, the Nikkei fell due to the yen, and the ASX dropped 1%.

Bitcoin trades at $78,700, failing to close above $80,000 for two weeks. Zcash dropped 5% but remains the weekly top performer (+33%). Out of 4,000 Bitcoins on the Liquid Network, 3,400 have been returned.

Today: Germany and France trade balance; Canadian tariffs; earnings from Casey’s and GameStop.

Story of the Day

Yen: The Carry Trade Unwinds

Summer is officially over, and the first major move of the season came from the yen. The Japanese currency gained 1% against the dollar on Tuesday morning to reach 152.89—its strongest level since February, just weeks after hitting a 40-year low at the end of July that triggered joint US-Japan intervention. The rate stood at 160 at the start of last week and is at 153.5 today, marking a 4.5% gain in one week. A 1.2% surge during thin trading on the Monday US holiday kicked off the move, and today’s data release reinforced it. Japan’s Q2 GDP growth was revised higher due to corporate investment, while real wages surged 2.4% year-over-year in July, the fastest rate since May 2021. According to Capital Economics, with wage growth this strong, the case for the BOJ to accelerate its tightening pace is becoming “increasingly compelling”; the market is now pricing in a hike next week and a extended policy path into next year.

The mechanics of the move matter. According to Khoon Goh of ANZ, once the yen started strengthening, breaking critical levels triggered numerous stop losses, creating a self-sustaining momentum move. Whether it persists depends on whether short yen positions remain to be covered, with the next key level at 150. In short, this is not the effect of intervention, but a positioning unwind: carry trades funded for years by low-interest yen are being unwound. James Ooi of Tiger Brokers raises the core question: given that previous intervention rounds had a limited impact because the US-Japan yield differential remained wide, is this rally sustainable? Ooi also notes that a BOJ hike could induce Japanese capital repatriation, exerting sell pressure on US Treasuries; however, he considers this outcome “more manageable” than an excessively weak yen forcing Japan into a large-scale Treasury sell-off to defend its currency. The narrative of “Japanese capital returning home” that we covered last week has materialized in the FX market, with Japanese equities paying the first price. The Nikkei opened 1% lower due to the strong yen before closing flat, whereas the KOSPI surged over 2% in favor of South Korea, which competes with Japan in memory chips.

The Gulf: “Economic War” and $100 Oil

Iran threatened the US with “economic war” on Tuesday, announced it had fired an advanced missile at US warships, and declared on Monday that in the event of new attacks, it would target Gulf energy infrastructure, including US oil and gas interests. The State Department used the term “war crime” regarding three tankers struck on Saturday. This pushed Brent up for a third straight day to $97.95; $100 oil, unseen since May, has been inching closer over the last three days. According to Suvro Sarkar of DBS, the escalation could “fundamentally” shift the market’s assessment of oil risk not just for the remainder of 2026, but into 2027. Daniel Hynes of ANZ expects a prolonged stalemate and measured military actions to keep Gulf supply constrained through year-end, delaying a return to pre-war volumes until Q1 or Q2 of 2027. Goldman Sachs factored this assumption into its forecast: raising December 2026 Brent to $85 and WTI to $80 ($5 higher), and 2027 forecasts to $80 and $75, respectively, citing disruptions to Middle Eastern shipping extending into 2027. Ed Meir of Marex believes the war will persist due to the sheer number of unresolved issues, keeping prices elevated through the end of the year.

Counter-narratives exist but remain weak. According to CoinDesk, Iran stated that an agreement with Oman to manage Strait of Hormuz transit is near completion, while Trump posted that once he wins the war, oil will “drop rapidly” and gasoline will fall below $3 or even $2. Trump’s early-June promise that “Hormuz will be open before Labor Day” fell flat as the deadline passed on Monday; traffic in the strait remains uncertain and started the week sluggishly. Ed Yardeni of Yardeni Research framed the week ahead: central bank meetings over the coming weeks will test the stock market’s composure; yields are rising globally, and the question is whether this reflects better-than-expected growth, higher-than-expected inflation, or looming fiscal debt crises.

The Fed: 60% Probability and Two Data Points

Friday’s August payrolls report came in at 162k against a 53k expectation. As noted by CoinDesk, a September rate hike—deemed “unthinkable” in the spring—is now priced in with a 60% probability, where it has held for a week. The 10-year yield sits at 4.79%, holding in its highest territory since November 2023, while the 2-year yield trades at its January 2025 high. Thursday’s PPI and Friday’s CPI represent the final macro data points prior to the September 15–16 meeting; a hot core reading would push the hike probability to two-thirds. Despite this, the Dollar Index sits at a two-week low of 98.8: yen buyers are positioning for the BOJ, and a structural shift identified by George Saravelos of Deutsche Bank offers little relief for the dollar—for the first time outside of the Global Financial Crisis, equity inflows into the US have outpaced fixed-income inflows, as foreign investors favor American equities over Treasuries. The trade front has also heated up again: Canada’s retaliatory tariffs on roughly $20 billion of US goods took effect today, a day after Trump posted that Bombardier cannot sell in the US without local manufacturing.

Market Wrap

Equities

Wall Street opens mixed following the holiday: Dow futures are down 300 points (-0.6%), the S&P is flat, and Nasdaq 100 futures are up 0.6%. The divergence stems from Friday’s ongoing rotation: oil and tariffs are hitting the industrial-heavy Dow, while the Asian chip rally supports tech. At Friday’s close, the S&P 500 fell 0.4% to 7,719, the Dow lost 0.5% to 53,414, and the Nasdaq 100 rose 0.2% to 29,544; Tesla fell 5.9% and Apple dropped 2.5%, while AMD gained 4.7%, ASML rose 4.2%, and TSMC added 2.9%. The VIX ticked up to 15.3. Asia presented a split picture today: the KOSPI gained 0.6% to 7,039, sustaining yesterday’s 4% surge to remain the world’s strongest index with a +12% monthly gain; the Taiex sits at 47,106, just 2% shy of its peak. The Nikkei slid 0.4% to 66,128 under yen pressure, the ASX lost 1% following a sharp drop in consumer confidence, the Hang Seng fell 0.3%, and the Sensex dropped 0.5%, remaining below its 200-day moving average. Chinese data was mixed: August exports grew 25% in line with expectations, while imports came in below expectations at 28.2%, yielding a trade surplus of $119 billion; demand for high-tech components for AI infrastructure is driving exports, while domestic demand remains soft. The BIST 100 gained 1% to 14,152, recovering for a second day and narrowing its weekly loss to 1.3%. European futures are flat, with the DAX at 26,007 awaiting the ECB.

AI infrastructure news flow continues: Nvidia-backed Australian firm Firmus signed a multi-year capacity agreement with OpenAI for two data centers in Malaysia, expanding its contracted capacity above 900 megawatts; the company is preparing for an IPO at a $10.5 billion valuation. In Taiwan, Nvidia supplier Wistron priced a $1.47 billion GDR offering at a 5.5% discount, causing its stock to fall 5%; after a 23% year-to-date gain, the cost of capital was priced in for the first time. Casey’s and GameStop report earnings today.

Foreign Exchange

The Dollar Index fell 0.35% to 98.81, hitting a two-week low and sitting a quarter-point above support at 98.56; its RSI stands at 43. As detailed above, the yen is the story of the week: USD/JPY trades at 153.49 with an RSI of 33, sitting 2.8% below its 200-day moving average and down 6.4% over the last two weeks, moving away from its 52-week peak. Yen crosses show a uniform downward trend: EUR/JPY fell 1.6% to 178.5, GBP/JPY lost 1.6% to 207.8, CHF/JPY dropped 1.6% to 189.7, and AUD/JPY slipped 1.6% to 111; RSIs across all four range between 27 and 43, with weekly losses spanning 3.4% to 4.2%. CHF/JPY sits 3.9% below its 200-day moving average, making it the weakest among the crosses. Dollar weakness against other major currencies remains subdued: EUR/USD trades at 1.1632, approaching its August high of 1.1711; GBP/USD is flat at 1.354; AUD/USD sits at 0.722 in an uptrend at a 20-day high; and NZD/USD stands at 0.588. Driven by strong export data, the yuan trades at 6.71, its strongest level in 3.5 years. Emerging market currencies saw the peso and rand pull back slightly, though their broader downtrends remain intact. USD/TRY hit a new high of 48.45, with an RSI of 85.

Commodities

Copper is the metal of the day: rising 2.8% to $6.78, breaking its 52-week high to set a new record. It sits 13% above its 200-day moving average in a clear uptrend, as supply shortage concerns combined with Chinese export data. Gold stands at $4,471 (spot at $4,428–$4,430), flat on the week with an RSI of 52; silver rose 2% to $67.3, platinum trades at $1,826, and palladium at $1,412. Precious metals are benefiting from dollar weakness, though the 4.8% 10-year yield is capping upside gains; Friday’s CPI is the event risk for this balance. Crude oil continues higher: Brent stands at $97.95 and WTI at $93.3, both trading near their upper Bollinger Bands, up 9.7% and 11.9% on the week, respectively. Natural gas is flat at $2.96. In grains, wheat jumped 6.2% back to 760.5, erasing yesterday’s correction in a single day; with an RSI of 56, the move is sharp and requires a second day for confirmation. Cocoa gained 2% to 6,175. The 9.7% drop in coffee stems from a contract rollover, making yesterday’s normalization temporary; commentary is withheld until the series stabilizes.

Crypto

Bitcoin trades at $78,704, down 1.4% over 24 hours. It has failed to close above $80,000 for two weeks, yet it is not giving back its August rally, remaining slightly green on the week and up 21% on the month. Pressure continues to stem from bond yields: as long as the 10-year holds around 4.8%, risk appetite remains constrained. According to Joel Kruger of LMAX, crypto has absorbed these headwinds “without meaningful technical damage”; Yusuf Fakhro of ARP Digital notes that the persistent fear of a bear market on option desks has dissipated, with long-term holders turning into net buyers in late August for the first time since the rally began. Funding rates remain low at 0.009%, open interest is flat, and RSI sits at 63; the 20-day high is at 82,300, and yesterday’s support at 78,000 held. A hot core CPI print would directly put the band floor at 77,000 into play. On the Liquid Network front, good news arrived: after patching nodes, the white-hat group returned 3,400 of the 4,000 Bitcoins to the federation wallet, while negotiations continue for the remaining ~598 Bitcoins ($47 million). The network remains offline pending resolution of the chain split and a safe restart; Samson Mow warned users not to send Bitcoins to peg-in addresses.

Altcoins experienced a general but shallow decline: Ether fell 1.2% to 2,477, Solana dropped 2% to 103.2, and XRP sits at 1.39. Zcash fell 5% to $1,125 but remains the clear leader among large caps with a +33% weekly gain, while Hyperliquid lost 3%, erasing its weekly gains. Dogecoin and BNB proved most resilient, up 9% and 7% on the week, respectively. Notable minor moves: AVAX gained 2.2% to 8.07, up 11.5% on the week and one step away from its 20-day high of 8.32; ENA is losing momentum, down 5% (though still up 84% monthly); Dash fell another 7.7% to 63.2, unwinding its +41% weekly rally. Adding a political dimension: Hunter Biden is launching the LAPTOP memecoin tomorrow on Base, named after the laptop left in Delaware in 2019; 20% of the supply will be airdropped to wallets holding losses on the TRUMP token, and 30% will be burned if conditions such as Democrats winning in 2028 or Bitcoin hitting a new record are met. TRUMP dropped from a $15 billion peak to 600 million; this is not an investment thesis, but another sign of how intertwined crypto and American politics have become.

Second Story: Foreign Investors Shift from Treasuries to Equities

A note from George Saravelos, Head of FX Research at Deutsche Bank, provides the clearest single-sentence proof of the bond story playing out in recent weeks: for the first time outside of the Global Financial Crisis, US equity inflows have exceeded fixed-income inflows. Foreign investors are not abandoning US assets; rather, they are shifting which assets they purchase—preferring to fund profit-generating corporations over a $40 trillion public debt burden. This serves as the third piece of the same puzzle, alongside Warsh’s observation last week that “corporations and the government are competing for the same dollar” and the domestic return of Japanese pension funds. The implications are identical: structural floors under long-term yields are rising, verbal intervention by the Treasury remains ineffective, and at the margin, European and Gulf capital are shifting alongside Japanese capital. The practical market implication is that the S&P remaining near record highs while the dollar weakens is not a contradiction; both are two sides of the same capital flow.

Levels to Watch

• USD/JPY (152.9 / 150): Today’s low and ANZ’s next threshold. A break below 150 signals the second phase of the carry unwinding, impacting the Nikkei and Asian risk assets more severely. BOJ meeting on September 18.
• Brent ($100): A psychological threshold unseen since May; the 20-day high of 97.6 has already been cleared. A confirmed Oman agreement points below $95, while an infrastructure attack pushes it above $100.
• Dollar Index (98.56): Half a point away. A breakdown could follow a moderate CPI print, opening the path for gold, copper, and emerging market currencies.
• US 10-Year Yield (4.80%–4.82%): A three-week ceiling; Thursday’s PPI and Friday’s CPI will either push yields past this range or pull them back toward 4.6%.
• Bitcoin ($77,000 / $80,000–$80,400): Range floor and resistance unreached for two weeks. A hot CPI tests the floor; a close above 80,400 opens the way to 82,300.
• Copper ($6.75): The broken 52-week high now acts as support; holding above it confirms a new wave in industrial metals.

Weekly Calendar

Date	Day	Event
Sep 8	Tuesday	Germany & France July Trade Balance; Canada retaliatory tariffs on US goods take effect; Earnings: Casey’s General Stores, GameStop
Sep 10	Thursday	US PPI; ECB Rate Decision (expected %2.25 → %2.50, guidance critical)
Sep 11	Friday	US August CPI (core expected %0.2, upside risk %0.3); last major data point before the Fed
Sep 15–16	Mon–Tue	FOMC Meeting (hike probability at 60%)
Sep 18	Friday	BOJ Meeting (hike almost certain; key day for the yen and carry trade)
Late Sep	—	Clarity Act in the Senate; Trump-Xi meeting; Nov 3 Midterms