US core PCE inflation ran at 3.0% in August, below the 3.3% forecast, while headline PCE was 3.4% against 3.7% expected. Markets now price about a one-in-three chance of an October Fed hike, down from roughly even a day earlier, and Goldman Sachs pushed its forecast for the next hike to December. The 10-year Treasury yield still sits near 5.3%, close to its highest since 2007; Friday's payrolls are the next test.
Japan's Tankan index for large manufacturers rose to +24, the most confident since 2018, just below the +25 forecast. The Bank of Japan's rate is 1.25%, a 31-year high, but two board members opposed the September hike and odds of another move in October are near 20%. Dollar-yen trades near 158 after Tokyo spent a record 15.4 trillion yen supporting the currency in July and August. The BoJ decides on October 30.
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Japan's Tankan index for large manufacturers rose to +24, the most confident since 2018, just below the +25 forecast. The Bank of Japan's rate is 1.25%, a 31-year high, but two board members opposed the September hike and odds of another move in October are near 20%. Dollar-yen trades near 158 after Tokyo spent a record 15.4 trillion yen supporting the currency in July and August. The BoJ decides on October 30.
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