The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

2152 ET - The area for any Japanese government currency intervention is likely in a zone with the dollar around 162 yen to Y165, rather than a specific level, says State Street Investment Management senior fixed-income strategist Masahiko Loo. The yen strengthened sharply against the dollar overnight on suspected intervention, which Loo says was the right moment: after the Federal Reserve meeting, a touch softer U.S. inflation data, and immediately ahead of the Bank of Japan's policy decision later Friday. "The message is clear: intervention risk remains alive and well," Loo says. The dollar was last trading at Y160.57.(megumi.fujikawa@wsj.com)

2148 ET - Market participants are likely to be cautious over near-term bets on the yen, given the balance of risks, MUFG Bank's Michael Wan says in a research report. Net yen short positions remain elevated close to all-time highs and Japanese "authorities may be looking to flush out these positions," the senior currency analyst says. Whether the yen extends Thursday's gain of as much as 3.3% will probably "depend on how the market reacts post the Bank of Japan policy meeting," Wan says. "Overall, we would as such be cautious on the [dollar-yen] pair heading into the weekend and early next week. The dollar is 0.7% higher at 160.61 yen, according to LSEG data. (ronnie.harui@wsj.com)

2133 ET - Any surprise intervention by the Japanese government to prop up the yen is likely nothing more than a stopgap measure to buy time, says Daiwa Securities' chief currency strategist Kenta Tadaide. "To maximize the impact of currency intervention, monetary policy must align in the same direction," he says. "While the Bank of Japan is widely expected to hold its policy rate steady at today's decision, market attention is focused on the message sent through its policy statement and Gov. [Kazuo] Ueda's news conference," he adds. The yen surged against the dollar overnight on suspected intervention, but weakened back to around 160.55 Friday morning. (megumi.fujikawa@wsj.com)

2030 ET - The yen's focus is on BOJ Gov. Ueda's guidance at his post-meeting press conference today, following suspected yen-buying intervention by Japanese authorities on Thursday, StoneX's Matt Simpson says in commentary. "If policymakers want to capitalise on the yen's renewed momentum, even a slightly hawkish tilt--such as higher growth or inflation forecasts, or guidance that leaves the door open to further tightening--could help extend Thursday's gains," the senior market analyst says. The U.S. dollar rises 0.4% to 160.21 yen, the Australian dollar gains 0.3% to Y113.83, and the euro adds 0.4% to Y184.64, LSEG data show. (ronnie.harui@wsj.com)

2019 ET - Japanese stocks are higher in early trade following gains in U.S. technology stocks overnight. Electronics and bank stocks are leading the gains. Mitsubishi Electric is up 4.7% and Mizuho Financial Group is 3.6% higher. The dollar is at 160.22 yen, down sharply from Y163.60 as of Thursday's Tokyo stock market close. Investors are closely watching earnings, developments in the Middle East and the Bank of Japan's rate decision due later Friday. The Nikkei Stock Average is up 2.7% at 63549.20. (kosaku.narioka@wsj.com; @kosakunarioka)

2017 ET - The macroeconomic environment needs to change to reverse the trend of yen weakness, despite suspected yen-buying intervention by Japanese authorities overnight, ING's Chris Turner says in a research report. "If the ING house call of unchanged Fed rates in September is correct, Japanese authorities have a chance of turning this trend," says the global head of Markets. "We're less convinced that a decisive [dollar-yen] move lower will be driven by the BoJ hawkishness, unless there is a huge surprise at BoJ meeting," Turner says. The dollar is 0.5% higher at 160.27 yen after falling as much as 3.3% to Y157.96 on Thursday, lowest intraday level since May 14, LSEG data show.(ronnie.harui@wsj.com)

2009 ET - JGBs edge lower in price terms in early Tokyo trade ahead of the BOJ's rate decision due today. With Japan's central bank likely to leave rates unchanged, "focus will be on forward guidance," J.P. Morgan Private Bank's Yuxuan Tang says in an email. "Markets currently price only one additional full rate hike by year-end," says the Asia Head of Rates & FX Strategy. "On the BOJ's explicit mandates of inflation and economic activity, the case for materially tighter policy remains limited," Tang adds. The 10-year JGB yield is up 0.5 bps at 2.800%. (ronnie.harui@wsj.com)

1942 ET - Japanese stocks may rise following U.S. technology stock gains overnight. Nikkei futures are up 3.3% at 63900 on the SGX. The dollar is at 160.12 yen, down sharply from Y163.60 as of Thursday's Tokyo stock market close. Investors are focusing on the Bank of Japan's rate decision due later Friday as well as developments in the Middle East. The Nikkei Stock Average rose 0.7% to 61867.43 on Thursday. (kosaku.narioka@wsj.com)

1604 ET - Treasury yields are mixed as markets get mixed signals from the Fed while the U.S.-Iran war heats up. U.S. GDP slows in 2Q and PCE inflation cools in June, as expected. Tomorrow, consumer sentiment is expected to tick higher, according to WSJ consensus. Markets price an interest rate increase in September, following the Fed hold with three hike dissents. But Chairman Warsh's comments are perceived by many observers as an indication that it won't take much to convince the FOMC to hold again. The 10-year yield rises 0.041 percentage point to 4.662%. The two-year, which is more sensitive to Fed moves, slips 0.007 p.p. to 4.227%. (paulo.trevisani@wsj.com; @ptrevisani)

1503 ET - Fed Chairman Warsh's remarks after yesterday's hold are seen as dovish, and that may have pushed the BoJ to step in to boost the yen, TS Lombard's Rory Green writes. Markets speculate that intervention may be behind a 2.7% decline of the dollar versus the yen. Green says a dovish Fed may have offered an opportunity for the Ministry of Finance to intervene. He also notes that previous interventions have been followed by interest rate increases. "A move tomorrow would still be a surprise, but the meeting is now live," Green says. The strengthening yen comes as the WSJ Dollar Index falls 1% and the greenback weakens 0.5% against the euro. (paulo.trevisani@wsj.com; @ptrevisani)

1437 ET - A note from Oxford Economics says lower-income households will need to rebuild their savings cushion after this year's energy price surge. "The personal saving rate is hovering at 2.7%, below its 2025 average of 4.6%," they say. The personal savings rate has not been this low since June 2022, when it was 2.2%. Further gains in household net wealth will remain a tailwind to spending by older, wealthier consumers, Oxford Economics adds. (jessica.coacci@wsj.com)

1409 ET - The yen will likely need more than government intervention to gain sustainable strength, Insight Investment's Alex Moloney says. The dollar weakens 2.7% against the Japanese currency, fueling unconfirmed speculation that Tokyo has stepped in to support the yen. Authorities have recently moved to dissuade locals from sending money overseas, as a way to boost demand for yen assets. Moloney says a more hawkish central bank is needed. "If we were to see the Bank of Japan get to the head of the curve and start to hike rates more aggressively, more speedily, then that would support the yen going forward." The BoJ is expected to hold rates steady Friday.