04/08/2026

BIZ & FINANCE TUESDAY | AUG 4, 2026

17

Yen leaps as Japan confirms joint intervention with the US

BEIJING: China’s manufacturing sector expanded at its slowest pace in four months in July, as output and new orders rose more slowly, while export orders returned to growth after a contraction, a private-sector survey showed yesterday. The RatingDog China General Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 50.9 in July from 51.7 in June, missing analysts’ forecast of 51.5. The 50-mark separates growth from contraction. An official survey released on Friday showed China’s factory activity un expectedly slipped into contraction in July, reinforcing concerns over slowing growth, weak domestic demand and elevated production costs. The private survey showed growth in new orders slowed to its weakest pace since January. New export orders returned to growth after contracting in May and June, though the increase was only marginal. The backlogs of work rose for a sixth consecutive month, though at the slowest pace in that stretch. Price pressures eased further. Input price inflation slowed to a six-month low, while output prices were broadly flat as firms held off on raising charges. Firms remained optimistic about output over the next 12 months, the survey showed. Meanwhile, India’s manufacturing sector expanded at its slowest pace in nearly five years in July as overall demand remained soft while a third consecutive month of slowing job creation also signalled a loss of TOKYO: The yen leapt yesterday, while Japanese stocks and bonds fell after Tokyo confirmed a rare joint intervention with Washington to pull the Japanese currency off four decade lows. The yen jumped as much as 1.4% to 155.20 per US dollar, a level last seen on May 6. The sudden surge raised speculation among market participants of another round of intervention, following the joint action last week, when the yen surged 3.8% over Thursday and Friday. In a statement yesterday, Japan’s finance ministry said Friday’s yen buying intervention with the US Treasury Department “countered excessive volatility and disorderly movements in the Japanese yen in recent months”. “We will not hesitate conducting further coordinated intervention,” Finance Minister Satsuki Katayama told reporters. Katayama declined to comment on whether her ministry had inter vened yesterday. “The coordinated intervention has materially raised the cost of betting against the yen,” said Charu Chanana, chief investment strategist at Saxo.

0.4% on the day. US Treasury Secretary Scott Bessent said Washington “will not hesitate to participate in further joint intervention”, while repeating calls for further interest rate hikes from Japan’s central bank. The BOJ kept its policy rate steady on Friday, but warned for the first time that underlying inflation could exceed its target and said future policy discussions would focus on upside price risks. “Bessent’s comments arguably carry more weight than the inter vention itself,” said Matt Simpson, senior market analyst at StoneX. “It feels like a safe bet that the Japanese yen has troughed for the year.” – Reuters

much as 6.5 basis points to a record high 2.09%. The 10-year yield climbed as much as 3.5 basis points to 2.83%. “Japan and the US conducted joint currency intervention, which means Japan is under pressure to support the yen with fundamentals this time, such as with monetary policy,” said Rinto Maruyama, senior strategist of FX and rates at SMBC Nikko Securities. Japan’s currency has been under pressure for years, undermined by the BOJ’s gradual approach to monetary policy tightening, which has kept yield differentials wide between Japan and the rest of the world. The yen changed hands at 156.82 per dollar as of 0648 GMT, up around

for domestic exporters. Losses had narrowed by the close, though, with the Nikkei ending down about 1% at 63,754.90 and the Topix shedding 1.1% to 3,960.03. Automakers were among the worst performers, with Toyota slumping 3.4% and Suzuki sliding 6.7%. Japanese government bonds declined, sending yields higher as some investors took joint inter vention as a signal for an accelerated pace of Bank of Japan (BOJ) policy tightening. The yield on Japan’s two-year government bond, the tenor most sensitive to monetary policy expect ations, rose 5.5 basis points to 1.56%, a three-decade high. The five-year JGB yield climbed as

momentum, a survey showed. The S&P Global HSBC India Manufacturing PMI fell to 53.5 in July from 54.2 in June, its lowest reading since August 2021, and slightly below a preliminary estimate of 53.9. New orders – a key gauge for demand – rose at the second-weakest rate in over four years as challenging market conditions and reduced client interest weighed on sales growth. Export orders rose at the fastest pace since April but remained modest after falling to a 39-month low in June. In contrast, eurozone factory output surged at its fastest pace in nearly 4½ years in July but growth was largely driven by firms clearing order backlogs rather than rising demand, pointing to a fragile recovery, a survey showed. Conflict in the Middle East has disrupted supply chains and sent energy costs soaring, causing difficulties for manufacturers. The headline S&P Global Eurozone Manufacturing PMI rose to 51.9 in July from June’s 51.4, its highest reading since April but just below a preliminary estimate of 52.0. An index measuring output, which feeds into a composite PMI due today, bounced to 52.9 from 51.7, its highest level since March 2022. Orders rose only marginally in July, well below the pace of output growth, suggesting factories are running hot on old work rather than new business. Export orders fell again, with declines in France, Spain, Italy and Austria more than offsetting gains elsewhere. – Reuters o Currency hits 3 month high, stocks and bonds decline “It not only caught speculative positioning offside but also increased the risk of follow-up action, which should make investors more cautious about rebuilding aggressive short-yen positions.” The sudden gain in the yen weighed on Japanese stocks. The Nikkei retreated sharply from Friday’s one-week high, sliding as much as 2.6%, while the Topix tumbled 3.1%. A stronger yen slashes the value of overseas revenue

China factory growth in July slows to 4-month low: Survey

HK debuts offshore China government bond futures HONG KONG: Hong Kong launched offshore Chinese government bond futures yesterday, giving foreign investors a new risk-management tool as Beijing steps up efforts to expand the yuan’s global use through the Asian financial hub. Regulatory Commission (CSRC), told a ceremony here. 500,000 yuan, half that of the onshore equivalent, and will be cash settled with no physical delivery of the underlying bonds. China and Hong Kong government officials and regulators at the listing ceremony for offshore Chinese government bond futures at the Hong Kong Stock Exchange yesterday. – REUTERSPIC

The new bond futures contracts would strengthen Hong Kong’s offshore yuan hub status and “help foreign investors hold Chinese bonds with greater confidence”, Wu said. China has pushed for greater connectivity with Hong Kong, having announced a series of measures to bolster currency, bond and gold trading in the city, and has been promoting cross-border investment. The CSRC chairman pledged yesterday to strengthen cooperation with Hong Kong to facilitate the launch of more yuan-based investment products, as well as exchange-traded funds to expedite global asset allocation toward China. The offshore five-year CGB futures contracts for September delivery were traded 1.1% higher at 107.660 around noon. Each contract has a size of

GF Securities said in a note that investors can use the new tool to hedge risks, make directional bets, or seek arbitrage between China and Hong Kong. Global demand for yuan assets has continued to grow, with overseas investors adding Chinese government bonds to their portfolios since the Iran conflict broke out, drawn by their low correlation with Western markets. China and Hong Kong regulators are actively preparing to include RMB-counter and real estate investment trusts (REITs) into the cross-border Connect scheme, CSRC’s Wu said. The Hong Kong Stock Exchange’s RMB-counter allows eligible stocks listed in the city to trade in the yuan. – Reuters

The offshore five-year CGB futures, the only such contract listed outside mainland China, began trading on Hong Kong Exchanges and Clearing (HKEX). The instrument is traded and settled in yuan. The launch marks another milestone in Beijing’s effort to internationalise the yuan and further open its financial markets, following a decision in April to allow qualified foreign investors to trade onshore treasury bond futures for hedging purposes. “Global investors currently hold 3.2 trillion yuan (RM1.9 billion) of Chinese bonds, and their needs to manage interest rate risks keep growing,” Wu Qing, chairman of the China Securities unveiled plans for a direct US listing, aiming to capitalise on stronger valuations in the US market, such a deal would mean a UK-based company would effectively be buying a major US pharmaceutical champion. AstraZeneca declined to comment, while Bristol Myers did not immediately respond to a Reuters request for comment. AstraZeneca’s share price has more

AstraZeneca, Bristol Myers said to have held talks on US$400 billion megadeal NEW YORK/WASHINGTON: Astra Zeneca Plc and Bristol Myers Squibb held preliminary discussions about a possible combination that would create one of the world’s biggest pharmaceutical companies with a combined value of nearly US$400 billion (RM1.6 trillion), according to a person familiar with the situation. whether the talks are ongoing. A potential deal would carry regulatory risk because of concerns about how it might be assessed by US antitrust authorities under President Donald Trump’s administration, the person said on condition of anonymity. Trump has been focusing on domestic investments in the sector and expanding US manufacturing. While AstraZeneca last year than quadrupled during Pascal Soriot’s 14-year tenure as CEO, soaring above the wider FTSE 100 index and main British rival GSK. Second-quarter results last week showed strong demand for cancer and rare-disease drugs continues to drive AstraZeneca’s growth. Cancer treat ments accounted for about US$25 billion in 2025 sales, nearly half of the total, followed by cardiovascular, renal Oncology drugs accounted for more than 40% of Bristol Myers’ overall sales in the first six months of 2026, and the two companies’ cancer immunotherapies directly compete. Bristol Myers has been doing smaller deals to gain new drugs as it faces declining sales of older medi cines. – Reuters The Financial Times first reported the news. Reuters could not determine and metabolism treatments worth about US$12 billion.