Asia Economics & Strategy Daily: EM Strategy Weekly, BOJ preview, BI rate view, NZ CPI, BoK Review

EM Strategy: We see a mixed, risk-off backdrop as key milestone trades fail to perform, with USDEGP up 3% this week pushing front-end yields higher and prompting investors to tread carefully. With the buy-side squeezed into crowded refuge trades—BRL DI receivers and FX, Hungary rates and FX, and frontier (EGP, NGN) front-ends—we believe low propensity to invest is driving risk reduction. Japan: The BoJ is widely expected to keep the policy rate unchanged next week; market pricing for a second consecutive hike in October has receded from around 40%. We maintain our base case of quarterly hikes through mid-next year with a 2% terminal rate and expect the next hike in December. Indonesia: BI left the 7D policy rate steady in October and still views post-MSCI capital outflow risk as manageable;