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[Fed Rate Hike Highlights Warsh's Hawkish Stance; Bond Market Awaits Bank of Japan Decision] ⑴ US Treasuries and Japanese government bonds rebounded after yields held above their post-Fed rate hike highs. The 2-year US Treasury yield briefly touched around 4.74% on Wednesday after the Fed's decision. ⑵ The Bank of England maintained its interest rate at 3.75% by a 6-3 vote, in line with expectations. The Bank of Japan is expected to raise rates again to 1.25% at its meeting on Friday. ⑶ Fed Chairman Warsh stated at a press conference that given the strengthening economy and improving labor market, it is difficult to describe broad financial conditions as restrictive, thus "removing a dose of easing." He also noted that inflation has been above target for more than five years, and the main focus is on price stability. ⑷ Warsh emphasized that monetary policy discipline, rather than a single decision, is key, and it is essential to be confident that underlying inflation is moving clearly and quickly toward the target. ⑸ Warsh listed three reasons for the rise in interest rates since July: a strengthening economy, increased competition for capital, and geopolitical factors, but did not mention the mountain of debt faced by developed economies with higher spending, which has pushed up term premiums. (6) The latest data from the U.S. Treasury shows that net foreign purchases of U.S. Treasury securities and bonds fell by approximately $3.6 billion in July, the first decline since December 2025. (7) Reports indicate that foreign holdings of U.S. bonds fell to their lowest level since 2008 in July, a significant drop from the peak in November 2013. However, some economists believe this is essentially "supplier financing," with dollars earned from trade surpluses flowing back into U.S. Treasury bonds. (8) U.S. Treasury yields fell by approximately 3 to 4 basis points on the day, with the 10-year yield fluctuating between approximately 5.01% and 4.97%, and the 2-year yield fluctuating between approximately 4.73% and 4.68%. (9) Following the Bank of England's decision, British gilts rose, with futures rising by more than 0.5 points, while German government bond futures fell by less than 10 ticks. (10) Stock index futures rose by about 1%, with the Nasdaq leading the gains. The VIX index fell by about 2 points to around 16. The US dollar index was basically flat at 100.23. The yen strengthened ahead of the Bank of Japan's decision. WTI and Brent crude oil fell by about 2% and 2.5%, respectively. (11) Strategically, we maintain a neutral bias, looking for opportunities to sell strong assets, especially at the long end. The 10-year yield is expected to fluctuate between 4.70% and 4.80%. (12) Data released on the day includes initial jobless claims, the September Philadelphia Fed Manufacturing Index, August residential construction, and August pending home sales. The Treasury will also announce a multi-maturity bond issuance plan and auction short-term bonds and reopen 10-year Treasury Inflation-Protected Securities (TIPS).