〔Overnight Brief〕Yen Decouples From Fed to Six-Month High at 153.94 as Canada Fires C$27.6B Equal-Counter Tariff; Eurozone Q2 GDP Lifts to 0.6% q/q but Wages Cool to 3.3% - Three Fronts, One Carry-Unwind

0. Weekly Arc

The yen is no longer trading the Fed, and that is the cross-asset tell ^[1]. It broke 154.34 to 153.94 against the dollar on September 7 — a six-month intraday high — while the DXY slipped 0.27% to 98.914 ^[2][3][4]. North of the border, Ottawa answered Washington in kind: C$27.6B of US goods face equal-counter tariffs from September 8, with steel duties doubled to 50% ^[5][6]. In the eurozone, the third estimate delivered a split print: Q2 GDP lifted to 0.6% q/q from 0.4%, but per-capita wages slowed to 3.3% y/y ^[7][8]. Three stories, one trade: a carry unwind meeting a tariff escalation ^[5][2][8].

1. FX: Yen Decouples, Dollar Drifts

• **[NEW]** USD/JPY fell to 153.94 intraday from 154.34, the strongest level since late February; WSJ and FXStreet both frame the move as Fed-decoupled, and the move runs alongside rising JGB yields ^[2][1][9][4].
• **[NEW]** DXY -0.27% to 98.914; EUR 1.1624, GBP 1.3542, USD/JPY 154.34, USD/CHF 0.8095, USD/CAD 1.3815, USD/SEK 9.5935 ^[3]. FXStreet attributes CAD's resilience to oil, not the Fed ^[10].
• **[NEW]** NY Fed staff research: the dollar's reserve share fell from 64% to 56% over a decade, but reserve shifts since 2015 are roughly two-sided, not a broad de-dollarization ^[11].

2. Trade War: Canada's Equal-Counter Strike

• **[NEW]** Effective September 8, Ottawa imposed C$27.6B (~US$20B) of retaliatory tariffs matching the US 50% move, covering steel/aluminum, dairy, appliances and farm equipment ^[5][6]. Steel duties double to 50%; motorcycles, cosmetics and cheese added at 15-50% ^[6].
• **[ESCALATED]** US Trade Representative Jamieson Greer hinted at further tariffs or import bans on Canadian goods; no new talks are scheduled ^[6]. Ottawa is wagering that retaliation improves its negotiating leverage ^[6].
• **[ONGOING]** Scotiabank preview: a Bank of Canada rate hike is "one foot away," but the real market focus is the risk of core inflation reigniting ^[12].

3. Eurozone: GDP Up, Wages Down, Politics Loud

• **[NEW]** Q2 GDP third estimate: +0.6% q/q (vs +0.4% second estimate, +0.4% expected), +1.2% y/y (vs +1.0%) ^[7]. The upward surprise is the macro data event of the overnight.
• **[NEW]** Per-capita wages +3.3% y/y vs +3.5% in Q1, now close to the ECB's 3% reference ^[8]. Markets price ~75bp of hikes through mid-2027; the data raises doubts about moves after Thursday's expected 25bp ^[8].
• **[NEW]** French presidential candidate Jean-Luc Mélenchon attacked the ECB's expected second hike and proposed cancelling French government debt held by the Banque de France and the ECB — "essentially debt we owe ourselves" ^[13].
• **[ONGOING]** Germany is in talks with state-owned energy firms SEFE and Uniper over gas-storage aid, per Cailianshe ^[14].

4. Periphery and Other Data

• **[NEW]** UK BRC like-for-like retail sales +0.5% y/y in August, down from +1.0% ^[15].
• **[NEW]** Korea Q2 GDP final: +0.6% q/q, +3.7% y/y, in line with prior ^[16][17].
• **[NEW]** South Africa Q2 GDP: consensus -0.1% q/q per a 14-economist survey, ending nearly a decade of uninterrupted quarterly growth; Q2 fully absorbs the Iran war shock via Brent, agri-input prices and Hormuz disruption ^[18]. Economist John Loos flags capex depressed by uncertainty rather than rates alone ^[18].
• **[NEW]** Turkey: President Erdogan says investment, employment, production and exports remain priorities for the next three years ^[19]; separately, defense spending is set to rise 229% over 2027-2029 per the 2027-2029 economic program ^[20].
• **[NEW]** Russia: National Wealth Fund at US$154.1B (5.6% of 2026 GDP) as of Sept 1, including US$46.7B liquid (1.7% of GDP) ^[21].
• **[NEW]** Uzbekistan: August CPI +0.2% m/m, +6.2% y/y ^[22].
• **[NEW]** India: SEBI will simplify compliance for foreign investors in government securities ^[23].
• **[ONGOING]** BNP Paribas Eco Week: India's share of global GDP rose to 8.2% in 2025 (1.8x in 20 years), but middle-class formation is held back by informal, low-value-added employment ^[24].
• **[ONGOING]** A Nordic group of large companies and top investors is working on a scale-up fund proposal to stem company exodus to the US, per Bloomberg ^[25].
• **[ESCALATED]** Japan bonds: Bloomberg flags the US$7.5T JGB market and rising yields against a still-low bankruptcy-risk backdrop ^[9].

5. What Would Falsify It

• The yen story breaks if Fed pricing reasserts itself — a fresh hawkish Fed speaker or a US data surprise that re-anchors carry ^[1]. The DXY move is a single session ^[3].
• The tariff story breaks only if last-minute US-Canada talks resume; Greer's hint at "further measures" or import bans caps the upside, not the downside ^[6].
• The eurozone story breaks if Thursday's ECB delivers a hawkish guidance twist despite the Q1 wage cooling ^[13][8].
• Source quality: items ^[6] (Wall Street CN long-form), ^[18] (Jinshi forecast survey) and ^[11] (NY Fed staff blog) carry the most weight; ^[1] and ^[10] are single-source FXStreet reads; ^[9] is a Bloomberg explainer, not fresh news.