Traders price in roughly 60% odds of a 25bp Fed hike next week after Friday’s strong jobs report, while this week’s inflation data and expected ECB tightening are next. US-Iran fighting also kept oil and inflation risks in play.

Japan’s 10-year yield fell to around 2.89% as the yen reached a seven-month high, easing inflation pressure. Carry trade unwinding, repatriation bets and US calls for tighter policy supported the currency, while a BOJ hike is expected this month and another could follow by January. Wages grew at their fastest pace since 1997, and Q2 GDP was revised higher.

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