South Korean won gains over 1% against the US dollar.

Japan’s seasonally adjusted bank lending excluding trusts rose 6.3% YoY in June, the strongest pace since August 2020, driven by M&A, real estate and recovery-related loans, the BOJ said. The central bank said the data show credit channels remain open, reinforcing its view that financial conditions are still accommodative even after Governor Ueda raised the policy rate to its highest since 1995 last month. The BOJ cautioned the latest lending figures may not yet reflect the June rate rise; policymakers have repeatedly cited financial conditions as a key input when weighing further tightening. Robust loan demand suggests higher borrowing costs have not curbed corporate investment or household activity, supporting the case that the economy can absorb additional policy normalization. The BOJ’s Tankan showed corporate financial conditions improved for the first time in a year, and large firms reported easier commercial paper issuance conditions.

After the Bank of England published its Financial Stability Report, sterling traded near one-year highs against the euro and UK gilt yields remained elevated with little change. The report says the UK financial system remains resilient and continues to support the real economy despite developments in the Middle East, but flags vulnerabilities in risk assets, sovereign debt and high‑yield credit. The FCA and PRA are reviewing measures including removing the countercyclical leverage buffer from banks’ leverage requirements and cutting the minimum Tier 1 leverage ratio from 3.25% to 3%.