Tax-free JGB incentive could support yen, MUFG says

0905 ET - Japan potentially introducing tax-free opportunities to hold domestic government bonds would have positive implications for the yen, MUFG Bank's Derek Halpenny says in a note. It would possibly impact flows into foreign equity markets, supporting the yen, he says. 9 trillion yen in the three months to September. This captures household buying of foreign securities via the NISA tax-free investment program, Halpenny says.

" In July, Finance Minister Satsuki Katayama floated the idea of adding Japanese government bonds to NISA. 23 yen. S. and European high-yield credit continues to benefit from solid investor demand, Fitch Ratings says in a note.

" High-yield credit spreads remain below the average for the past 20-years, they say. com) 0900 ET - Treasury yields rise but stay below recent highs as oil prices ease. m. ET is forecast to tick higher, according to a WSJ consensus.

S. September CPI inflation due next week. The numbers are expected to guide the Fed's next decision, which is priced in so far as a hold. 232%.

753%. S. dollar after data showed Canada unexpectedly shed jobs again in September. Employers cut 68,300 jobs in September after 41,700 jobs lost in August.

Economists in a WSJ survey had expected a 9,000 increase in employment. The data dampen the prospect of the Bank of Canada raising interest rates on Oct. 28. S.

S. AI expansion which is spilling into other industries and economies, J. Safra Sarasin Sustainable Asset Management's Raphael Olszyna-Marzys says in a note. High energy prices are also likely to drive up inflation, causing central banks to raise interest rates, he says.

J. 0%, respectively, by 2027. com) 0746 ET - Spain's general election will hinge on the subject of housing, Pablo Muylle at ING says in a note. Expanding protections for tenants can ease the housing crisis, but such measures won't solve the underlying issue of insufficient supply.

Administrative bottlenecks and labor shortages have limited the construction of new homes, which has in turn driven up rents. In the upcoming election, the incumbent Socialist party favors rent caps and eviction protection, while the centre-right Popular Party is looking to strip back regulation to encourage investment. Each side holds part of the answer, Muylle says. "Tenant protection has clear social value...

But protection primarily determines how an existing shortage is distributed. P. Morgan analysts say in a note. The low-yielding franc was previously negatively correlated to European spreads widening as it was driven partly by central bank tightening, which encouraged carry strategies, they say.

Carry trades involve borrowing in currencies with low yields to invest in currencies with higher yields. The more aggressive widening in spreads recently reflects French debt concerns, causing markets to price in weaker growth and unwind carry trades. As a safe haven, the franc is sensitive to European growth, they say. com) 0717 ET - Morgan Stanley maintains its exposure to the intermediate segment of the Japanese government bond curve, expecting both shorter- and longer-tenor bonds to underperform.

"Faster Bank of Japan hike pricing could compress term premia through financial-conditions concerns, while super-long resilience appears vulnerable to a reversal in GPIF [Government Pension Investment Fund] repatriation expectations," strategists Koichi Sugisaki and Hiromu Uezato say in a note. Super-long JGB yields could face renewed upward pressure as pension rebalancing following yen strength likely shifts allocations from domestic to foreign assets. Meanwhile, yen weakness could sustain hawkish front-end pricing as markets focus more on political developments rather than economic fundamentals, they add.

com) 0713 ET - Evidence of economic resilience in Europe should help stabilize the euro after recent losses on French fiscal concerns, MUFG Bank's Derek Halpenny says in a note. 9% respectively. 0% estimate at the start of the year underlining the level of resilience," Halpenny says. This resilience will help maintain current market pricing for European Central Bank interest-rate rises, he says.

com) 0712 ET - French government debt poses greater risks than Greece did during the eurozone sovereign debt crisis, Commerzbank's Joerg Kraemer says in a note. Public debt across the eurozone currently averages around 90% of GDP, compared with 80% in 2009, Kraemer notes. Even a small country like Greece brought the currency area close to collapse, so the systematic risks posed by a French debt crisis are even greater. Openness to fiscal reform is also weaker today, he says.

Still, France has stronger institutions and greater financial capacity than Greece did, while eurozone banks are better capitalized. The ECB also has bond-purchase tools to contain market stress. com) 0644 ET - Germany's economic recovery is likely to continue after the country's economic prospects improved in September, according the Commerzbank's leading Early Bird indicator. "The global economic environment has improved compared to the previous month, and the weaker euro is making German products somewhat more competitive on the world market," economist Ralph Solveen says in a note.

The ECB's recent interest-rate increases have reduced the tailwind from monetary policy, but rates still remain comparatively low, supporting economic activity, he says. Higher government spending is also expected to continue supporting growth. com) 0627 ET - The cost of insuring French government bonds against default remains fairly high due to fiscal and political concerns. "These points to investors increasingly expressing concerns around France's medium-term fiscal and credit outlook," Barclays strategists say in a note.

The French five-year credit default swaps trade at 79 basis points, close to the multi-year high of 84bps reached last week, S&P Global Market Intelligence data show. com) (END) Dow Jones Newswires October 09, 2026 09:05 ET (13:05 GMT) Copyright (c) 2026 Dow Jones & Company, Inc. The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.