By Pete Schroeder

WASHINGTON (Reuters) - A top U.S. bank regulator warned on Wednesday the agency may begin pushing back against the "worrisome trend" of states adopting laws meant to police national bank activities on political grounds.

Michael Hsu, head of the Office of the Comptroller of the Currency (OCC), said in a speech that such measures are pushing "greater fragmentation" of the financial system, and the OCC may begin challenging those measures.

"Increasingly, banks are being asked by states to pick a side in service of performative politics rather than deliberative policy. The OCC is a bulwark against this. Just as the advent of national banking was able to help unify a fragmented banking system in the late 1800s, it can help ensure that parochial overreach today does not splinter our banking system," he said, according to prepared remarks provided by the agency.

Numerous states have considered or passed legislation aimed at policing bank policies considered discriminatory on largely political grounds. Many of those measures have advanced in Republican-led states like Texas, which has enacted laws prohibiting banks from doing business with the state if they are deemed to discriminate against certain industries like fossil fuels or firearms.

Recently, Florida and Tennessee passed new laws that prohibited federally-chartered banks from denying services to anyone on the basis of their political or religious beliefs, and allowing the state to investigate any discriminatory claims. Banks have long maintained that they do not discriminate against particular industries or political beliefs.

Hsu said the OCC plans to "fortify and vigorously defend" federal preemption of state laws that are deemed to interfere with national bank operations and regulation, without naming specific states or laws. He said that preemption authority is "central" to the nation's banking system and has allowed it to thrive.

He added that safety and soundness of national banks, including compliance with federal laws and regulations, is "legally absolute and non-negotiable, and the OCC will act accordingly to defend that."

By Elena Fabrichnaya

MOSCOW (Reuters) - Russia should accelerate the creation of infrastructure for payments in cryptocurrencies but carefully weigh the associated risks, its money laundering watchdog said on Wednesday, ahead of a parliamentary vote on digital assets legislation.

Russia has faced significant delays in international transactions with major trading partners such as China, India, the United Arab Emirates and Turkey, after local banks, under pressure from Western regulators, have become more cautious.

The new legislation, expected to be reviewed by parliament on July 23, will allow the use of cryptocurrency transactions in international payments to maintain trade flows.

"This is a need for businesses, especially in cases involving sanction mechanisms, when they need to enter the international market, and it can't always be resolved through standard methods," said the watchdog's head, Yuri Chekhanchin.

Countries such as Venezuela already use transactions in cryptocurrencies to bypass international sanctions, prompting concerns among U.S. lawmakers who have raised the issue with the Biden administration.

Chekhanchin highlighted loose cryptocurrency legislation in some countries as the main risk and said his watchdog should have the right to block such transactions when they break Russian law. He did not name the countries he had in mind.

Cryptocurrencies are currently not allowed for payments inside Russia, and the new law is unlikely to change that. Earlier, the central bank admitted that payment problems were one of the key challenges for the Russian economy.

President Vladimir Putin also spoke on Wednesday at a government meeting on the use of digital currencies. Apart from his opening remarks, the meeting was closed to the public.
 

Putin praised the experimental introduction of a digital rouble, a blockchain-based asset backed by the central bank.

Russian and Iranian central banks are working to connect their digital currency systems, which would allow the two sanctioned countries to carry out bilateral transactions. Similar negotiations are underway with China and Belarus.

Putin said the massive energy consumption of cryptocurrency mining farms posed risks to energy supplies in some regions of Siberia, where many such farms have sprung up exploiting low local electricity prices.

He said tax and electricity tariff regulation for mining farms should be part of the new law.

By Joe Cash

BEIJING (Reuters) - China’s sputtering economy has prompted a dire, new shorthand online for pessimism about the prospects for any turnaround for jobs, incomes and opportunity: “the garbage time of history.”

The apparently made-in-China phrase injects a term from basketball – the ragged final minutes of a game when the outcome is no longer in doubt – into what started as a discussion of history and has since become a heavily censored online discussion about whether China’s workers and investors should give up.

China’s recent economic data have shaken confidence. Growth in the past quarter fell short of forecasts at 4.7%, highlighting the drag from a protracted property crisis and stalled consumer spending.

China’s Communist Party leadership concludes a closed-door meeting on Thursday expected to detail Beijing’s economic strategy for the next several years, including steps to promote technology. China Daily, in a front-page story on Wednesday, described one aim of the meeting as reviving confidence in the country’s “long-term economic trajectory.“

The fatalistic tag “garbage time” began popping up on social media platforms over the past month. It was given a more recent boost when state media and commentators lined up to denounce the phrase and any suggestion that decline would follow downturn for China.

“This is a catchphrase insinuating that there’s no help and no hope, denying and downplaying everything in China,” Beijing Daily said in a commentary last week.

It follows another buzzword China’s censors have targeted as a threat to stability since it broke into the mainstream three years ago: “lying flat,” a call to a slacker life of limited ambition and quiet protest.

Wang Wen, a finance professor at Renmin University and former columnist for the state-controlled Global Times, said earlier this month the idea of an era of garbage time was “more dangerous” because of its implicit message of hopelessness.

“It completely denies China’s current development situation and attempts to create public expectation that the country will eventually fail.”

The first apparent mention of the term on China’s internet came last September from Hu Wenhui, an editor at a small publication in Guangzhou. In an article that has been since censored, Hu argued that the history of the Soviet Union after 1979 and some Chinese dynasties suggest that some historical failures are inevitable，a comment some read as an implicit comment on current events.

“When the overall situation is set and defeat is inevitable no matter how hard you try, it’s just a futile struggle,” Hu said. “How should those unfortunate enough to encounter the garbage time of history conduct themselves?”

Hu could not be reached for comment.

In June, the topic appeared to get a boost in online discussions. Some on social media platform Weibo (NASDAQ:WB) said in comments still visible this week that the idea had struck a chord with some ordinary people. “There are quite a few people who begin to feel that as long as they can’t change anything, this is history’s garbage time,” one said.

There are other signs China’s collective confidence has suffered, according to survey data collected by Stanford University professor Scott Rozelle and others published in summary last week by the U.S. think tank Center for Strategic and International Studies.

Rozelle found Chinese respondents to a survey were more pessimistic than they had been two decades ago, more likely to blame structural factors for determining whether a person is rich or poor and far less likely to believe hard work pays off.

In 2004, 62% agreed “in our country, effort is always rewarded." That dropped to 28% in the 2023 survey.

By Indranil Sarkar and Arpan Chaturvedi

BENGALURU/NEW DELHI (Reuters) -Edtech company Byju's, once India's biggest startup valued at $22 billion, will face insolvency proceedings for failure to pay $19 million in dues to the country's cricket board, a tribunal said on Tuesday.

Byju's has suffered numerous setbacks in recent years, including boardroom exits and a tussle with investors who accused CEO Byju Raveendran of corporate governance lapses, job cuts and a collapse in its valuation to less than $3 billion. Byju's has denied any wrongdoing.

A ruling by India's companies tribunal on Tuesday, following a complaint by the Board of Control for Cricket in India (BCCI), initiated insolvency proceedings.

These will include the appointment of an interim resolution professional, Pankaj Srivastava, who will oversee the management of Byju's as the company's board of directors is suspended as per law.

CEO Raveendran will report to the resolution professional and the company's assets will remain frozen while the proceedings continue.

In a statement, Byju's said it wishes to "reach an amicable settlement with BCCI and we are confident that, despite this order, a settlement can be reached."

The company's lawyers are reviewing the order and will take necessary steps to protect the firm's interests, it added.

Byju's, which operates in more than 21 countries, became popular during COVID-19 pandemic by offering online education courses. It also offers offline coaching classes.

In February, a group of Byju's investors including Prosus (OTC:PROSF) and Peak XV voted to oust Raveendran, a move which Byju's has called invalid.

The companies tribunal said in its order "it cannot be disputed" that the parent of Byju's, Think & Learn Private Limited, had availed itself of the services of the BCCI and had defaulted on roughly $19 million in dues.

Delhi-based lawyer Bishwajit Dubey said Byju's controlling shareholders can either appeal the insolvency initiation legally or quickly settle the dispute with the cricket board to resolve the matter.

The BCCI declined a Reuters request for comment.

By Tom Westbrook

SINGAPORE (Reuters) - Gold hit a record and bonds rallied on Wednesday as markets prepared for global interest rates to fall, while stocks in Taiwan slipped after U.S. presidential candidate Donald Trump sounded lukewarm in his commitment to the island's defence.

The S&P 500 scaled record highs overnight and futures were steady in Asia. MSCI's broadest index of Asia-Pacific shares outside Japan was flat and Japan's Nikkei rose 0.1%.

In Taiwan, chipmaker TSMC fell 2%, wiping out almost $16 billion in market value, after Trump questioned U.S. support in an interview with Bloomberg Businessweek, saying Taiwan should pay for U.S. protection.

It was unclear exactly what Trump was planning, however his selection of trade hawk J.D. Vance as his running mate had already put markets on notice that China will figure heavily in his foreign policy thinking.

Chinese stocks were subdued for a second day running.

The Taiwan dollar slipped slightly to a two-week low. China's yuan steadied at 7.2676 per dollar.

"It is more and more clear to me that Trump should be bullish USD for at least a while," said Brent Donnelly, president at analytics firm Spectra Markets, as he's expected to impose tariffs and run a higher budget deficit.

"It's hard to imagine USDCNH ending 2024 below 7.25 on a Trump victory in November but it's not hard to imagine it closing above 7.50," he said, referring to the dollar-yuan pair.

Elsewhere in Asia, New Zealand shares hit their highest since March 2022 after data showed inflation slowing, though the rates market dipped and the currency rose on sticky domestically driven inflation.[.AX][NZD/]

Treasuries held gains that had pushed 10-year U.S. yields to four-month lows overnight after Federal Reserve Chair Jerome Powell said recent cooling in inflation readings "add somewhat to confidence" that consumer prices are coming under control.

Fed funds futures have fully priced a U.S. rate cut for September, followed by two more before the end of January 2025.

Ten-year yields were steady at 4.175% and two-year yields hovered at 4.445%. Bond markets in Australia, Japan and South Korea rallied. [JP/][.KS]

Lower yields helped propel gold sharply higher overnight and through chart resistance around $2,450 per ounce despite a broadly firm dollar. It touched a record $2,478 in Asia trade on Wednesday. [GOL/]

"Gold's ability to find support in any condition this year is worth highlighting," said Commonwealth Bank of Australia (OTC:CMWAY) commodity strategist Vivek Dhar.

"While we think gold prices face uncertainty in coming months, we think the uncertainty has a positive skew, raising the risk that gold rises above our forecast of $2,500/oz by the end of the year."

The Japanese yen was slightly weaker at 158.51 per dollar, though after a few rounds of suspected yen buying from Japanese authorities last week it remained well off a 38-year low of 161.96 touched earlier in July.

The euro was steady at $1.0925. Oil prices slipped slightly, weighed by signs of weakening demand from China.

Brent crude futures fell 13 cents to $83.60 a barrel and U.S. crude futures were also 13 cents lower at $80.63 a barrel. [O/R]

British inflation data is due later in the day where focus will fall on services inflation, which is expected to run at a still-hot 5.6% in June from a year earlier.

By David Shepardson and Karen Freifeld

(Reuters) - The U.S. Commerce Department plans to issue proposed rules on connected vehicles next month and expects to impose limits on some software made in China and other countries deemed adversaries, a senior official said Tuesday.

"We're looking at a few components and some software - not the whole car - but it would be some of the key driver components of the vehicle that manage the software and manage the data around that car that would have to be made in an allied country," said export controls chief Alan Estevez at a forum in Colorado.

In May, Commerce Secretary Gina Raimondo said her department planned to issue proposed rules on Chinese-connected vehicles this autumn and had said the Biden administration could take "extreme action" and ban Chinese-connected vehicles or impose restrictions on them after the Biden administration in February launched a probe into whether Chinese vehicle imports posed national security risks.

The comments of Estevez, who is the Commerce under secretary for industry and security, are the most definitive to date about the administration's plans on Chinese vehicles that sparked wide alarm.

Connected cars have onboard integrated network hardware that allows internet access, allowing them to share data with devices both inside and outside the vehicle.

Estevez said Tuesday the threat is serious.

"A car is a very scary thing. Your car knows a lot about you. Your car probably gets a software update, whether it's an electric vehicle or an autonomous combustion engine vehicle," he said.

"A modern car has a lot of software in it. It's taking lots of pictures. It has a drive system. It's connected to your phone. It knows who you call. It knows where you go. It knows a lot about you."

The Chinese foreign ministry has previously urged the United States "to respect the laws of the market economy and principles of fair competition." It argues Chinese cars are popular globally because they had emerged out of fierce market competition and are technologically innovative.

Raimondo said in May "you can imagine the most catastrophic outcome theoretically if you had a couple million cars on the road and the software were disabled."

There are relatively few imports of Chinese-made light duty vehicles in the United States. The Biden administration has proposed sharp hikes in tariffs on Chinese electric vehicles and other goods that they expect to be in place by Aug. 1.

By Stephen Culp

NEW YORK (Reuters) -Wall Street stocks rose and the Dow Jones Industrial Average hit an all-time closing high on Tuesday after U.S. retail sales data supported the view that the Federal Reserve is approaching its easing cycle, reining in inflation while avoiding a recession.

All three major U.S. stock indexes advanced on the day, but weaker megacap growth stocks, led by Nvidia Corp (NASDAQ:NVDA) and Microsoft Corp (NASDAQ:MSFT), capped the tech-heavy Nasdaq's gains.

Economically sensitive small caps extended their rally. The Russell 2000 scored a fifth straight day of gains greater than 1%, its longest winning streak since April 2000. The index gained 3.5%, touching its highest level since January 2022.

Dow transportation stocks also outperformed the broader indexes, logging its biggest one-day percentage gain since November and reaching its highest closing level since August 2023 as investors increasingly focused on undervalued areas of the market.

Value stocks, which have underperformed their growth peers and the broader S&P 500 so far this year, jumped 1.5%.

"This rotation underscores the likelihood of interest rate cuts as early as September," said Greg Bassuk, CEO at AXS Investments in New York. "Small cap companies are among the best-positioned to benefit from rate cuts, and today we're seeing this trifecta of strong earnings, a resilient economy and high confidence of a rate cut in September."

Economic data on Tuesday included stronger-than-expected retail sales reported by the Commerce Department. This provided reassurance that consumer spending, which accounts for about 70% of the U.S. economy, has stayed resilient despite restrictive monetary policy, and eased fears that high interest rates could tip the economy into recession.

"As you look at the economic data, it's slowing down but not at a concerning pace," said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis. "The Fed is seeing what it wants to see - it's that sweet spot of the economy slowing down but not too much and not too fast."

"This small cap rally seems predicated on the Fed cutting rates at the September meeting, where the futures markets are setting up a 100% probability," Hainlin added.

Second-quarter earnings season is ramping up.

UnitedHealth Group (NYSE:UNH) jumped 6.5% after reporting consensus-topping profit, lifting the blue-chip Dow and the S&P 500 Health Care index to all-time highs.

Bank of America's second-quarter profit beat expectations, and underwriting fees rose as capital markets resurged. The second-largest U.S. bank also provided upbeat net interest income guidance, sending its shares up 5.3%.

Morgan Stanley rose 0.9% even after the investment bank posted disappointing wealth management revenue.

Charles Schwab (NYSE:SCHW) slid 10.2% after reporting a dip in interest income.

Tinder parent Match jumped 7.5% on news that activist investor Starboard has a stake of over 6.5% in the company.

The Dow Jones Industrial Average rose 742.76 points, or 1.85%, to 40,954.48, the S&P 500 gained 35.98 points, or 0.64%, at 5,667.2 and the Nasdaq Composite added 36.77 points, or 0.2%, at 18,509.34.

Of the 11 major sectors in the S&P 500, industrials enjoyed the largest percentage gains, while technology and communication services were the only two sectors to end in negative territory.

By Laura Matthews, Carolina Mandl and Rae Wee

NEW YORK/SINGAPORE (Reuters) - For global investors with money in China's stock markets, the latest economic numbers are not of any comfort and just a reminder that the recovery they are betting on will take a while to happen.

Monday's second-quarter growth figures in China pointed not only to an economy growing below target, but also showed there is no sign of improvement in its anaemic property sector and the domestic consumer is more pessimistic and unwilling to spend.

That backdrop is a signal to investors it will be a long wait before the world's second-largest economy is able to have any meaningful recovery that lifts its stock market, which is up just over 1% this year.

"Being a China investor right now is frustrating," said Phillip Wool, U.S.-based senior managing director at asset manager Rayliant Global Advisors.

Rayliant has been selective but buying some Chinese stocks, which Wool likens to value investing, or a strategy of picking cheap stocks with high earnings potential. Wool says prices should eventually correct higher, but he has no idea when.

After surging some 19% from a multi-year low in February to its highs in May, China's benchmark CSI300 Index has been middling around the 3,400-3,500 range for the past month.

The Shanghai Composite Index has also fallen more than 6% from its eight-month high hit in May.

A slew of support measures from Beijing earlier this year to prop up its ailing stock market, which saw a change of leadership at the market regulator, had spurred investor hopes that the tide could be turning and sparked a short-lived rally.

But a few months on, the country's shaky economic recovery and lingering property crisis continue to remain an overhang, with geopolitical challenges spanning rising trade frictions with the European Union and protracted Sino-U.S. tensions adding to headwinds.

"The problem with China is this is a multi-year healing process," said Michael Dyer, investment director of multi-asset at M&G Investments.

While the authorities and central bank seem to be taking steps in the right direction, "they haven't come along with the bazooka that the rest of the world wants. There's still the geopolitical uncertainty," Dyer said. "So until then, if you're waiting for certainty, you're not going to get it."

BARGAIN-HUNTING

To be sure, some investors have piled in, citing attractive valuations and strong fundamentals, especially for companies that fall under the country's new growth sectors such as advanced technology and manufacturing.

Chinese stocks are cheap. The S&P 500 index trades at a price-to-earnings (PE) ratio of 23, Japan's Nikkei trades at 22, India at 23 and the Shanghai benchmark index is at half that number.

The forward 12-month price-to-book value for Chinese equities also stands at 0.95, compared with a value of 1.26 for the broader Asia-Pacific region.

"As value investors, we cannot ignore the opportunities in Chinese equities but we have to temper our enthusiasm given macro and policy risks that China is facing," said Kamil Dimmich, partner and portfolio manager at North of South Capital EM fund.

He is slightly underweight in the Chinese market overall, but "much less so" than a few years ago when valuations were high.
 

Foreign flows through the Northbound Connect scheme into Chinese stocks point to 37.6 billion yuan ($5.18 billion) worth of inflows to date. Inflows were 43.7 billion yuan in 2023.

Overall, the consensus seems to be that while peak pessimism towards China has passed, most investors are still waiting on the sidelines for a more definite recovery to play out. And the patience of those already committed is being tested.

"It's painful and stressful being a contrarian and taking in all the negative sentiment and seeing the false starts at a recovery," said Rayliant's Wool. "For better or worse, as a long-term active investor in China, I'm used to this."

($1 = 7.2651 Chinese yuan renminbi)

By Yoruk Bahceli and Dhara Ranasinghe

LONDON (Reuters) - Huge debt piles among the world's biggest economies are starting to unnerve financial markets again, as elections cloud the fiscal outlook.

French bonds took a beating after a surprise election and hefty spending plans caused alarm. U.S. debt dynamics are in focus ahead of a November presidential election.

A debt crisis is not the base case, but investors are alert to the risk of looser purse strings sparking market stress.

"Deficits are back in focus," said Guy Miller, chief market strategist at Zurich Insurance Group (OTC:ZFSVF).

"There needs to be more attention placed on not just the debt, but how to generate a growth dynamic – particularly in Europe," he added.

Here's a look at five big developed economies on the worry list:

1/ FRANCE

A surprise election was a rude awakening to investors who had previously looked past France's creaking public finances. With a budget gap at 5.5% of output last year, France faces European Union disciplinary measures.

France's bond risk premium over Germany briefly surged last month to the highest since 2012's debt crisis as the far right pushed ahead in the election race.

A leftist alliance ultimately won and a hung parliament may limit its spending plans but could also hamper any action to strengthen France's finances.

France's national audit office chief said on Monday there was no room for manoeuvre on the budget and debt must be reduced.

Even before a new government, the EU expected debt at around 139% of output by 2034, from 111% currently. France's risk premium has eased, but remains relatively high.

"There's going to be a permanent fiscal premium embedded in the price," said David Arnaud, fund manager at Canada Life Asset Management.

2/ UNITED STATES

The U.S is not far behind. The Congressional Budget Office reckons public debt will rise from 97% to 122% of output by 2034 - more than twice the average since 1994.

Growing expectations that Donald Trump will win November's presidential election have lifted Treasury yields recently as investors have priced in the risk of larger budget deficits and higher inflation. Some investors reckon the worst outcome for bond markets would be a Trump presidency with a Republican-led House of Representatives and Senate.

That would mean "we can get another round of fiscal stimulus... from a starting point in which the deficit is 6% of GDP," said Legal & General Asset Management's head of macro strategy Chris Jeffery.

While U.S. Treasuries are buffered by their safe-haven status, the yield curve is near its widestsince January, reflecting the pressure facing longer-term borrowing costs.

3/ ITALY

Investors have praised nationalist Prime Minister Giorgia Meloni as market friendly. Yet last year's 7.4% budget deficit was the highest in the EU. So Italy also faces EU disciplinary measures that will test market optimism.

Italian bonds have outperformed their peers. But the risk premium on Italy's bonds briefly hit a four-month high in June, as French bonds sold off, reflecting how quickly jitters can spread.

Rome aims to lower the deficit to 4.3% this year, but has a dismal track record recently for meeting fiscal goals.

Home renovation incentives costing over 200 billion euros since 2020 will put upward pressure on Italian debt for years. The EU executive projects debt rising to 168% of output by 2034 from 137% now.

"You're not getting rewarded for the risk that you're running in Italy," said Christian Kopf, head of fixed income and FX at Union Investment.

4/ UK

Britain has gone down the worry list since 2022, when unfunded tax cuts by the then-Conservative government routed government bonds and sterling, forcing central bank intervention to stabilise markets and a policy U-turn.

A new Labour government, which has pledged to grow the economy while keeping spending tight, faces challenges, with public debt near 100% of GDP.

It could surge to more than 300% of economic output by the 2070s, Britain's budget forecasters said last year, with an ageing society, climate change and geopolitical tensions posing big fiscal risks.

Stronger economic growth is key to stabilising debt, says S&P Global.

5/ JAPAN

Japan's public debt stands at more than twice its economy, by far the biggest among industrialised economies.

That's not an immediate worry, because the bulk of Japanese debt is domestically owned, meaning those investors are less likely to flee at the first signs of stress. Overseas investors hold just about 6.5% of the country's government bonds.

Fitch Ratings reckons price increases and higher interest rates could benefit Japan's credit profile by inflating debt away.

There are still some reasons for concern.

Japan faces more than a two-fold increase in annual interest payments on government debt to 24.8 trillion yen ($169 billion) over the next decade, government estimates suggest.

By Ankur Banerjee

SINGAPORE (Reuters) - The dollar hung around five-week lows on Tuesday as comments from Federal Reserve Chair Jerome Powell bolstered the case for a rate cut in September, while cryptocurrenices gained on rising odds of former President Donald Trump getting reelected.

Powell said on Monday the three U.S. inflation readings over the second quarter of this year "add somewhat to confidence" that the pace of price increases is returning to the Fed's target in a sustainable fashion.

"We've had three better readings, and if you average them, that's a pretty good place," Powell said at an event at the Economic Club of Washington.

The comments, likely Powell's last until his press conference following the Fed's July 30-31 meeting, shifted rate cut expectations. Markets are now anticipating 68 basis points of easing this year, with a rate cut in September fully priced in, CME FedWatch tool showed.

The euro was a shade lower at $1.0893, while sterling last fetched $1.2967. The dollar index, which measures the U.S. unit versus six peers, was at 104.3, not far from the one month low of 104 it touched on Monday.

"Despite dovish inclinations, Powell remained in a data-dependent mode which is warranted after the Fed has burnt its fingers with inflation running back higher in Q1 after a dovish pivot at the end of 2023," said Charu Chanana, head of currency strategy at Saxo.

"Markets may need to wait longer for the confirmation of their September rate cut hopes, and growth and labour data will be on the radar such as retail sales today."

U.S. retail sales for June due later in the day are expected to show a decline of 0.3% on a month on month basis.

Meanwhile, the yen was weaker in early trading after touching a one-month high against the dollar at 157.165 per dollar on Monday. It was last at 158.54, with traders wary of further intervention from the Japanese authorities.

Traders suspect Tokyo intervened in the market in another effort to lift the Japanese currency last week after the cooler-than-expected U.S. inflation report. Data from Bank of Japan indicates that authorities may have spent up to 3.57 trillion yen to prop up the frail yen.

Markets will be eyeing fresh money markets data to gauge if Tokyo intervened on Friday as well.

In cryptocurrencies, bitcoin rose 1% to trade just shy of the $65,000 mark, near its highest in a month. Ether was 1% higher at $3,466 at a two-week peak.

Cryptocurrencies, along with shares of companies that could benefit from a Donald Trump presidency, jumped on Monday after an assassination attempt on the Republican candidate boosted expectations he would win the November election.

Trump presented himself as a champion for cryptocurrency during a San Francisco fundraiser in June, although he has not offered specifics on his proposed crypto policy.

"While the crypto scene still has SEC Chair Gary Gensler as a consideration on the regulatory side, potentially having the leader of the free world in your corner will always sit well with crypto heads," said Chris Weston, head of research at Pepperstone.

In other currencies, the Australian dollar was 0.16% lower at $0.6749, creeping away from the six-month high it touched last week. The New Zealand dollar eased 0.17% to $0.6064, hitting a two-week low.