Core Viewpoint - Japan is on the verge of intervening in the currency market for the third time in recent years due to a persistently weak yen, but analysts believe such intervention may be ineffective and could lead to further selloffs [1][4]. Currency Market Situation - The yen has reached a 10-month low, declining alongside bonds since Sanae Takaichi assumed leadership of Japan's ruling party, with proposals for increased government spending [2]. - Japan's cabinet has approved a stimulus package worth 21.3 trillion yen ($135 billion), and Finance Minister Satsuki Katayama has issued warnings about potential yen intervention if market movements become disorderly [3]. Intervention Expectations - Analysts anticipate that the government may issue verbal warnings before actual intervention occurs, likely around the 158-162 yen per dollar range [3]. - Previous interventions in 2022 and mid-2024 were successful in strengthening the yen, but current conditions may make similar outcomes more challenging due to a lack of significant short positions against the yen [4]. Market Reactions - Initial intervention could lead to increased short positions, resulting in more selling pressure on the yen shortly after the intervention [5]. - The current exchange rate is at 156.7 yen per dollar, approaching a critical level of 160 yen, which could trigger significant market reactions if no intervention occurs [6]. Speculation and Market Sentiment - Traders recall the intervention levels from the previous year, around 157 to 162 yen, and if no action is taken as the yen nears 160, speculation about a weaker intervention stance may lead to aggressive selling of the yen [7].

Group 1: Depreciation of Assets - The rapid depreciation of chips used by hyperscalers raises questions about the accuracy of asset valuation [2][4] - There is a concern regarding whether hyperscalers are marking their assets correctly, particularly the accelerators and chips [2][4] - A significant investment, such as 100 billion USD in accelerators, may lose value within 6 to 12 months, prompting scrutiny from councils [3] Group 2: Treasury Market Reactions - The Treasury market is responding to weak US labor market data, leading to expectations of rate cuts from the Federal Reserve [5][6] - The market's reaction is notable as it is the first opportunity to respond to the ADP figures indicating a weakening labor market [6] - There is a split among Federal Reserve speakers regarding inflation and labor market concerns, creating uncertainty about future monetary policy [6][7] Group 3: Japanese Yen and Market Intervention - Japanese officials have specific thresholds for market intervention to stabilize the yen, which are not yet met [10] - The rhetoric from the Japanese administration regarding currency stabilization is increasing as the yen remains under pressure [11] Group 4: SoftBank and Nvidia Stake - There is uncertainty surrounding SoftBank's sale of its Nvidia stake and its implications for company valuation [12][14] - The market reaction to SoftBank's trading has been volatile, reflecting broader concerns about valuation in the tech sector [13][14]