(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

August 3 (Reuters) -

What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

Japan's yen strengthened further on Monday as the U.S. and

Japanese governments confirmed their first joint intervention

since 2011 to prop up the ailing currency from recent 40-year

lows. Both the timing and impact of the move are being examined

closely.

I'll get into that and more below.

But first, listen to the latest episode of the Morning Bid daily

podcast, where we discuss the historic intervention, U.S.

corporate earnings growth and the latest on Iran.

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MUCH 'TO DO' ABOUT YEN INTERVENTION

There are many questions about the timing of Friday's joint yen

intervention. The Bank of Japan had delayed another interest

rate rise last week, partly because of the recent earthquake in

the country, and perhaps Tokyo and Washington fretted about how

that decision could impact the yen. Then there's the real

prospect of a Federal Reserve rate rise as soon as next month.

Either way, Japan sold almost $60 billion to support the yen and

Scott Bessent's "to-do" list revealed U.S. plans to spend

between $5 billion and $10 billion. Successful or not, the two

sides have pledged to repeat the action as necessary.

The fallout may be aggravating U.S. bond yields on the

assumption that Japan, the biggest single overseas creditor to

the U.S. government, could liquidate Treasuries to raise the

dollars to sell. Bessent, however, said that a Fed repo facility

using Japan's bond holdings as collateral was activated.

Otherwise, Treasuries have caught something of a break from

President Trump's latest pause in bombing Iran, which comes as

he claims fresh talks between the two sides would take place on

Monday. Oil prices fell over 5% on the development to below $84

per barrel.

In equities, Asia markets started the week in the red, with

South Korea's volatile KOSPI sliding more than 5% after a record

rally last Friday. Stateside, Wall Street futures were up before

the bell.

This week the U.S. July employment report comes into view, while

the U.S. earnings season rolls on, with companies set to report

including Palantir, AMD and SpaceX.

There have been some eye-popping metrics so far, with

aggregate annual S&P 500 profit growth tracking a whopping 47%

in the second quarter, according to LSEG data. That's almost

twice what was expected a month ago, as Big Tech's AI push

combines with a bumper quarter for the big banks and Big Oil.

This level of growth has only been exceeded in recent

decades during the bouncebacks from the banking crash and

pandemic recessions. But, of course, there's been no recession

this time.

This staggering earnings growth helps explain why both

dip-buying and sectoral rotation are the preferred responses to

recent volatility on Wall Street, rather than cashing out.

In deals news, AstraZeneca shares fell sharply on Monday as

investors baulked at reports of merger talks with Bristol Myers

Squibb - mooted tie-up that would form one of the world's

biggest drugmakers with a combined value of nearly $400 billion.

Chart of the day

The U.S. and Japan intervened to buy yen against the dollar and

euro last week in the first such joint action since 2011. They

pledged more action as and when necessary, and the yen, which is

up around 4% against the dollar since Japan's first action on

Thursday, briefly hit its best levels since early May on Monday.

The action has arrested a slide that took the yen to 40-year

lows last week, with renewed currency weakness a feature so far

of Sanae Takaichi's nine months as prime minister.

A fresh bout of fiscal spending and perceived pressure on

the Bank of Japan not to raise interest rates have been factors,

but so too has speculation about how Japan will finance hundreds

of billions of U.S. investments pledged in the bilateral trade

deal between the two countries.

Today's events to watch

* U.S. ISM manufacturing PMI for July (10 a.m. EDT)

* U.S. corporate earnings: Palantir

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Opinions expressed are those of the author. They do not reflect

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