Japanese authorities are facing renewed pressure to combat a sustained depreciation in the yen, as investors eye prospects of higher-for-longer U.S. interest rates while the Bank of Japan remains wedded to its super low interest rate policy.

The yen strengthened sharply against the dollar on Tuesday, leading some market participants to believe Japanese policymakers had intervened to support the currency, although others said the size of the move was not convincing enough.

Below are details on how yen-buying intervention works:

Japan bought yen in September of last year, its first foray in the market to boost its currency since 1998, after a Bank of Japan (BOJ) decision to maintain its ultra-loose monetary policy drove the yen as low as 145 per dollar. It intervened again in October after the yen plunged to a 32-year low of 151.94.

Yen-buying intervention is rare. Far more often the Ministry of Finance has sold yen to prevent its rise from hurting the export-reliant economy by making Japanese goods less competitive overseas.

But yen weakness is now seen as problematic, with Japanese firms having shifted production overseas and the economy heavily reliant on imports for goods ranging from fuel and raw materials to machinery parts.

When Japanese authorities escalate their verbal warnings to say they "stand ready to act decisively" against speculative moves, that is a sign intervention may be imminent.

Rate checking by the BOJ - when central bank officials call dealers and ask for buying or selling rates for the yen - is seen by traders as a possible precursor to intervention.

Japan's top currency diplomat Masato Kanda told reporters on Wednesday authorities will take "appropriate steps against excessive moves, without ruling out any options." Kanda, who has made similar comments in recent weeks, declined to say whether Tokyo intervened overnight on Tuesday.

Kanda may be relying on psychological tactics to fight yen bears, as Tokyo did last October by holding off on immediately confirming whether intervention took place.

By staying mum, authorities can keep investors guessing and discourage speculators from testing the yen's new lows - a tactic known as "stealth intervention."

Investors will know whether Tokyo intervened, and if so how much it spent, when the Ministy of Finance releases monthly intervention data, usually at the end of each month.

Authorities say they look at the speed of yen falls, rather than levels, and whether the moves are driven by speculators, to determine whether to step into the currency market.

With the dollar having breached the psychologically important 150-yen level, many market players see 151.94 yen, where Japan last intervened, as the next threshold, then 155.

The decision is highly political. When public anger over the weak yen and a subsequent rise in the cost of living is high, that puts pressure on the administration to respond. This was the case when Tokyo intervened last year.

While inflation remains above the BOJ's 2 per cent target, public pressure has declined as fuel and global commodity prices have fallen from last year's peaks.

If the yen's slide accelerates and draws the ire of media and public, the chance of intervention would rise again.

The decision would not be easy. Intervention is costly and could easily fail, given that even a large burst of yen buying would pale next to the $7.5 trillion that change hands daily in the foreign exchange market.

When Japan intervenes to stem yen rises, the Ministry of Finance issues short-term bills, raising yen it then sells to weaken the Japanese currency.

To support the yen, however, the authorities must tap Japan's foreign reserves for dollars to sell for yen.

In either case, the finance minister issues the order to intervene, and the BOJ executes the order as the ministry's agent.

Yen-buying intervention is more difficult than yen-selling.

While Japan holds nearly $1.3 trillion in foreign reserves, these could be substantially eroded if Tokyo intervened heavily repeatedly, leaving authorities constrained over how long they can defend the yen.

Japanese authorities also consider it important to seek the support of Group of Seven partners, notably the United States if the intervention involves the dollar.

Washington gave tacit approval when Japan intervened last year, reflecting recent close bilateral relations. U.S. Treasury Secretary Janet Yellen said last month the question of Washington giving the greenlight over another yen-buying intervention by Japan "depends on the details" of the situation.

The global stock market has finally closed the book on what has been the most challenging month of the year. Both the S&P 500 and the tech-heavy Nasdaq fell by nearly 5% in September, while the Dow Jones declined by 3.2% for the month. The big question on everyone's mind is whether this downtrend can be reversed in the months ahead. What are the key factors to watch for into the final quarter of the year?

Wall Street kicked off the first trading day of October and the last quarter of the year on a cautiously positive note. The S&P 500 finished marginally higher, and the Nasdaq gained nearly 0.7%. The day was marked by a better-than-expected ISM Manufacturing PMI, signaling the beginning of the fourth quarter with hints of a potential easing in the contraction of the U.S. manufacturing sector and associated price pressures.

Notably, the prevailing sentiment stemming from the Federal Reserve's September meeting, which suggested that interest rates would remain elevated for an extended period, continues to serve as the backdrop for the equity market's risk landscape. Consequently, even though there is no Federal Open Market Committee (FOMC) meeting in October, discussions surrounding the price pressure are expected to remain a focal point for the month ahead.

Furthermore, from the second week of October, the Q3 U.S. earnings season will provide more insights into corporate revenues and profits. Currently, it appears that the third-quarter earnings season may witness another decline in earnings, further squeezing corporate margins. According to Factset, by the end of September, 64% of companies providing earnings per share (EPS) guidance are projecting negative EPS. This percentage is above the 5-year average of 59%.

However, it's worth noting that in the past two earnings seasons, despite the overall results being less impressive, a significant number of companies still exceeded expectations and outperformed the consensus forecasts. For instance, during the April to June quarter, 79% of reporting companies surpassed their forecasts, above the five-year average of 75%.

In fact, despite the sharp decline from August to September, the S&P 500 remains 10% above its opening position in 2023. Historically, the chances of the fourth quarter preserving yearly gains after a mid-year correction are not uncommon. According to the chart below, in the past 12 instances when the S&P 500 followed a similar pattern to that of 2023, the fourth quarter enjoyed a minimum 2.14% and an average 8.39% quarterly return.

The daily chart of the U.S. 500 has depicted a clear downward trajectory from the year's peak above 4500.

Last week's retreat has brought the S&P 500 to a vital support area, which includes the 200-day moving average, the year-long trend line from October 2022, and the peak from August 2022, situated between 4258-4287.

Based on the price action in the past five sessions, it appears that the significance of this level has notably eased the selling pressure and successfully pushed the RSI out of oversold territory for the time being. On the other hand, a significant resistance zone lies between the August low and the 20-day SMA at 4340 to 4376.

The crude oil markets rose for the third consecutive month in September on improved demand outlooks and expectations for OPEC + to keep supply tight by cutting production further. The WTI futures jumped 21%, and the Brent futures rose 26% in the past three months. However, both benchmark prices fell three days in the past four trading days, making traders doubtful about whether the oil market can re-claim the $100 per barrel. The 100-mark might be achievable, given the increasing demand and reduced supply by OPEC + in the past few months. However, crude prices might not be able to sustain above the level due to global economic uncertainties.

On the supply side, the International Energy Agency(IEA)'s report showed that OPEC+'s output reduction took the cartel's oil production to 50 million barrels per day (bpd) in July to nearly a two-year low as the leader of the organization, Saudi Arabia, voluntarily cut production by an extra 1 million barrels per day and may extend the reduction to the end of 2023. The organization's output sharply declined by 2 mb/d from January this year. At the same time, non-OPEC producers ramped up their production by 310 kb/d to 50.2 mb/d, which may take the global oil output to hit a record of 101.5 mb/d in 2023. The U.S. oil production is the biggest contributor to the increase. At the same time, the cartel's supply had hit a bottom in July and rose for the second consecutive month in September. The monthly Reuters survey showed that production increased by 120,000 bpd due to higher output in Iran and Nigeria in August, with Iran's production hitting a new 2018 high of 3.15 million bpd. The OPEC oil production had risen for the first time since February.

On the demand side, the U.S. commercial crude oil stockpiles decreased by 2.2 million barrels by the week ending 22 September from the previous week. The crude imports increased by 8.2% on average over the past four weeks from the same period last year. The latest IEA's report shows that global oil demand "is set to expand by 2.2 million barrels per day (mb/d) to 102.2 mb/d in 2023, with China accounting for more than 70% of growth. In June and August, global oil demand hit a record of 103 mb/d as major economies had faster growth than forecast in the second quarter. China's improvement in its recent economic data has also fuelled the oil market's rally. However, the momentum may not be sustained in 2024 as the U.S. Fed's rate hikes and China's economic slowdown may dampen demands globally. Also, the increase in electric vehicles will weigh on fuel demands. The IEA expects the global demand will slow to 1 mb/d in 2024.

The uptrend is still intact in the WTI, as it has been moving in an ascending channel since the end of June. However, an oversold signal in the RSI may have caused the correction. In the short term, the price may be able to test the recent high of about 95 again. A bullish breakout of this level can take it to above 101, which is a 61.80% Fibonacci retracement. The near-term key support can be found at the 50-day moving average of 85.33, and then about 80 at the 23.60% Fibonacci retracement.

Brent oil rebounded from the lower band of the ascending channel, and it may continue the uptrend and test the recent key resistance of about 96, a bullish breakout of this level may take the price to 100, which is the 50% Fibonacci retracement and is the previous resistance in November 2022. In the near term, the potential key support can be found at the 50-day moving average of 89. A breakdown of this level could press the Brent price further to test about 84.59 at the 23.6% Fibonacci retracement.

The New Zealand dollar has been sliding for two consecutive days, down 1.55% so far this week. This is due in part to the strength of the US dollar and higher US Treasury yields, as well as the Reserve Bank of Australia's decision to hold interest rates for a fourth straight time.

The Reserve Bank of New Zealand is expected to maintain the cash rate at 5.5% when it meets on Wednesday. If the RBNZ does pause, it would be for the third straight time, and this could weigh on the New Zealand dollar.

The RBNZ is facing a difficult challenge, as it needs to balance the need to combat high inflation with the risk of tipping the economy into a recession. Inflation in New Zealand is currently at 6%, which is double the upper band of the central bank's target range.

However, the RBNZ may be reluctant to raise interest rates any further, as the economy is already showing signs of slowing. Domestic consumption is weak and global demand for exports is declining. The central bank has projected a recession, and an end to tightening would be appropriate if it weren't for inflation running at a 6% clip.

The key question is how long the RBNZ is willing to wait for inflation to fall before hiking again. If the central bank signals that it is prepared to pause for a longer period of time, this could lead to further weakness in the New Zealand dollar.

The U.S. House of Representatives for the first time in its history has booted its speaker out of the job, as infighting in the narrow and bitterly divided Republican majority toppled Kevin McCarthy from the position.

Here is a look at what comes next:

Immediately following Tuesday's 216-210 ouster vote, Republican Representative Patrick McHenry, a McCarthy ally, was appointed acting speaker pro tempore. He can serve for only a very limited time - up to three legislative days in this case.

The acting speaker pro tempore's duties are vague, according to a guide to the chamber's rules and procedures:

That person "may exercise such authorities of the office of the speaker as may be necessary and appropriate pending the election of a speaker or speaker pro tempore."

While the speaker sets the overall legislative agenda in the House, it is the House majority leader who schedules specific bills to be debated and voted upon in the chamber.

Republican Representative Kelly Armstrong told reporters that McHenry's main task will be to "get us a new speaker."

Anything further, he said, would spark a move to oust McHenry.

Until a House speaker is installed, it is unlikely that further action will be taken on bills to fund the government, with lawmakers facing a Nov 17 deadline to provide more money or face a partial government shutdown.Battles over those bills and anger over McCarthy's failure to win extremely deep spending cuts sought by hard-right conservatives sparked the successful move by Representative Matt Gaetz to unseat him.

The House's 221 Republicans and 212 Democrats huddled privately to figure out their next steps - both political and legislative.

Each party was expected to try to settle on a candidate for speaker. That's fairly easy for Democrats as they are solidly behind Minority Leader Hakeem Jeffries, who ran for speaker in January against McCarthy and other candidates.

Republicans, because of their obvious divisions, especially among a small group of hard-line conservatives seeking very deep cuts in federal spending, could have a harder time settling on a candidate.

McHenry could have an advantage now that he is an acting speaker. It was unclear whether he wanted the job. McCarthy is not barred from running again.

The House finds itself in an unprecedented moment and so it was unclear exactly how quickly an election will be held in the full House.Normally, the elections for speaker are scheduled at the start of the new Congress every two years.

The leaders of both parties will have to decide when they are ready to enter into the process of electing a speaker.

The January endeavor was sloppy as McCarthy for days could not get enough votes to win and had to endure 15 ballots.

It could be at least as chaotic this time around for Republicans unless they conclude that such chaos is creating a public backlash that could doom their election prospects in 2024 and they unite.

Under the U.S. Constitution, the House speaker does not have to be a member of Congress.

That is the reason some Republicans have floated the name of former President Donald Trump for the job, even though he is running for president and has said he does not want the job.

With monthly inflation at 4.75% (close to our call of 4.7% and the market expectation of 4.9%), annual inflation continued to rise in September, reaching 61.9%. This compares to the government's full-year estimate of 65% as laid out in its medium-term plan and the central bank's forecast of 58%, which it announced towards the end of July. The last inflation report of the year on 2 November will provide further insights into how the central bank assesses the inflation outlook and whether it will change the forecast for 2024.

The data reflects a continued broad-based deterioration in price dynamics as both food and non-food prices, excluding the housing group, increased above the level seen last September. The rise in energy prices and continuing pressure in services are also attracting attention. Core inflation (CPI-C) came in at 5.3% month-on-month, rising to 68.9% on an annual basis. This was attributable to exchange rate developments, changes in administered prices and commodity prices. Accordingly, the underlying trend in the headline rate (as measured by the three-month moving average, annualised percentage change, based on a seasonally adjusted series) increased further in September though at a slower pace thanks to goods inflation. The services group has maintained its elevated trend due to continuing pressure in rent, catering and transportation services. This supports the Central Bank of Turkey's observation in the September rate-setting statement that the underlying trend is likely to decline in the period ahead.

September PPI, meanwhile, stood at 3.4% on a monthly basis, translating into 47.4% year-on-year. This elevated annual figure reflects a significant acceleration in the Turkish lira equivalent of import prices due to commodity and exchange rate increases and it implies that cost pressures have gained strength in recent months. While a slight decline from 49.4% YoY a month ago is a positive development, still-strong domestic demand at the end of the third quarter suggests that producers are likely to continue to pass on their cost increases i.e. recent electricity and natural gas hikes to consumers.

In the breakdown, all of the main expenditure groups positively impacted the headline. Among them, food turned out to be the major contributor, adding 0.88ppt, as both processed and unprocessed food products witnessed significant price increases. With the September figure, annual inflation in the group reached 75.1% vs. the CBT's assumption of 61.5% in the July inflation report. This was followed by transportation at 0.78ppt, on the back of rising energy prices and adjustments in transportation services. Housing, meanwhile, pulled the headline up by 0.71ppt due to rent, water fees and coal prices. Among non-food groups, education, alcohol-tobacco and household goods groups recorded strong increases. As a result, goods inflation rose to 52.4% YoY showing a moderate move from 51.5% YoY a month ago. Annual inflation in services, which is significantly influenced by domestic demand and minimum wage hikes, maintained its strong uptrend and reached another peak of 86.5% YoY.

Overall, given the deterioration in pricing behaviour, exchange-related effects, widespread increase in wages and tax adjustments, continuing strength in domestic demand and the upward reversal in global commodity prices, particularly oil prices, inflation will likely remain under pressure in the near term, as we have already seen a significant jump since the elections. However, a continuation of recent stability in the lira will likely keep the currency-related impact on the CPI basket under control. In this environment, the CBT has taken steps towards normalising interest rates and its exchange rate policy after the elections. The latest rate hikes in August and September were significant and likely raise expectations for the end of the current cycle. These moves and the impact on deposit and loan rates along with other macro-prudential decisions will be important in tightening financial conditions and controlling domestic demand.