• ING: China’s domestic demand engine sputtering despite stronger headline PMI
• BOJ board tilts more hawkish on paper, but dovish dissent count could double
• China factory PMI beats forecast at 50.3 as AI-linked exports drive expansion
• RBA stood ready to hike again as minutes flag excess demand, weak housing
• China June Manufacturing PMI 50.3 (expected 50.1) Services 50.2 (49.9)
• PBOC sets USD/ CNY central rate at 6.8109 (vs. estimate at 6.7877)
• Now Japan’s fin min weighs in: Will respond appropriately to currency moves at any time
• Yen hits its weakest since 1986 … where is the intervention Danger Zone?
• Japan Chief Cabinet Secretary Kihara: always ready to take necessary action on forex
• Bank of Japan board member Sato will speak with media at 0800 GMT / 0400 US Eastern time
• Former BOJ insider flags potential inflation running at 3% as case for early hike builds
• Japan data – May industrial production +0.5% m/m (expected +1.1%)
• Japan May unemployment rate 2.5% (expected 2.5%, prior 2.5%)
• US authorizes temporary suspension of some duties on Moroccon phosphate fertilizer imports
• UK shop prices hold steady in June but business confidence slips on surging cost fears
• Rare earths, export controls and WTO reform headline new EU-China trade framework
• Emerging markets bulls hold firm despite Middle East conflict and oil import risks
• Morgan Stanley sees European equities broadening as AI volatility drives diversification
• Fed hawkishness and energy slump drive dollar higher, but MUFG sees gains fading
• Iran’s President on Trump: “Unreasonable boasting and unfounded threats”
• investingLive Americas market news wrap: A bad day for Japan all around

Session wrap: USD/JPY breaks above 162, China data beats, RBA holds tightening bias

• USD/JPY broke above 162 for the first time since December 1986, brushing highs near 162.40, with verbal intervention from Chief Cabinet Secretary Kihara and Finance Minister Katayama failing to halt the move
• China’s official June PMIs beat across the board: manufacturing back in expansion, non-manufacturing at 50.2 versus 49.9 expected, composite at 50.6, though strength was concentrated in tech-linked exports while domestic demand stayed soft
• PBOC doubled its overnight reverse repo injection to 600 billion yuan on its second day of operations, keeping the rate unchanged at 1.25% to help institutions through month-end funding needs
• China reportedly clamped down on issuance of higher-yielding offshore debt, per Bloomberg
• RBA June minutes showed the board holding rates but maintaining an explicit tightening bias, citing excess demand still in the economy
• USD firmer broadly but the yen was the main story; oil rangebound, gold slipped back under $4,000
• Nikkei rose nearly 1%, while Hong Kong and mainland Chinese equities weakened

The yen was the dominant story of the session, with USD/JPY pushing through 162 for the first time since December 1986 and printing highs around 162.40. Japanese authorities attempted to head off the move before it happened, with Chief Cabinet Secretary Kihara reiterating that Tokyo stood ready to take necessary action on currency markets while USD/JPY was still trading under the 162 level. Traders either dismissed the warning or simply ran through it, and the pair extended losses regardless. Finance Minister Katayama followed with her own intervention rhetoric, repeating that Japan will respond appropriately to currency moves as needed and that any action could be decisive, in line with the joint statement previously agreed with the United States. As of writing, the yen had recovered little of the ground lost. Attention now turns to a 5pm Tokyo time press conference from the Bank of Japan’s newest policy board appointee, which will be watched for any signal on how the board’s newest member views the currency and rate outlook.

On data, China’s official PMIs for June came in better than expected across the board. Manufacturing activity returned to expansion, while the non-manufacturing PMI, covering services and construction, improved to 50.2 from 50.1, beating the 49.9 consensus. The composite measure rose to 50.6 from 50.5. The improvement was driven almost entirely by sectors tied to global technology demand, while domestic conditions remained considerably weaker, a divergence that continues to characterise the recovery.

The People’s Bank of China kept its overnight reverse repo rate unchanged at 1.25% on Tuesday, the tool’s second day of operation, while doubling the size of its liquidity injection to 600 billion yuan, roughly $88.3 billion, from the prior day’s debut operation. The rate remains 15 basis points below the 1.4% seven-day reverse repo rate that currently serves as the PBOC’s primary policy benchmark, and the larger injection was aimed at helping financial institutions manage typical month-end funding pressures. Separately, Bloomberg reported that China has moved to clamp down on the issuance of higher-yielding offshore debt.

In Australia, minutes from the RBA’s June meeting reaffirmed that the board sees monetary policy needing to remain restrictive to unwind excess demand in the economy, with members reiterating a willingness to raise the cash rate target further if conditions warrant.

Beyond the yen-driven moves, the dollar firmed modestly on a broader basis. Oil traded mostly rangebound through the session, while gold slipped back below the $4,000 mark. In equities, Japanese stocks advanced, with the Nikkei up just shy of 1%, while Hong Kong and mainland Chinese shares both weakened.

New BoJ policy board member will speak at 5pm Tokyo time.

This article was written by Eamonn Sheridan at investinglive.com.