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Yen hits one-week high before a new round of trade talks
The Japanese yen rose in Asian trade on Friday against a basket of major rivals, expanding gains for the fourth straight session against the US dollar and hitting a week high ahead of a new round of trade talks between Japan and the US next week.
The yen is also bolstered by a drop in US 10-year treasury yields after negative surprises from recent US data, which boosted the odds of Fed rate cuts this year.
The Price
The USD/JPY fell 0.5% today to 144.96, a week low, with a session-high at 145.68.
The yen rose 0.75% on Thursday against the dollar, marking the third profit in a row on haven demand following weak US data.
Trade Talks
Sources indicate that chief Japanese trade negotiator, Ryusi Akazo, could travel to Washington early next week for a third round of trade talks with the US.
Japan’s finance minister Katsunubo Kato said on Friday he’ll discuss forex exchange issues with US Treasury Secretary Scott Bessent soon, with an aim at containing extreme currency fluctuations.
Kato said the Japanese government remains committed to its investments in US treasury notes as a high-liquidity reliable asset.
Economic Recession
Earlier data showed the Japanese economy contracted for the first time in a year in the quarter ending March, indicating the fragility of the Japanese economy.
Japan’s GDP shrank 0.2% in the first quarter, missing estimates of a 0.1% dip, and after a 0.7% growth rate in the fourth quarter of 2024.
US Yields
US 10-year treasury yields fell over 0.4% on Friday away from recent five-week highs at 4.548%, pressuring the dollar.
Recent weak inflation data bolstered the odds of two 0.25% Fed rate cuts in the second half of the year.
Gold climbs over 1% as the dollar tapers off
Gold prices rose on Thursday as the dollar index fell against most major rivals, with concerns resurfacing about the US economy after Fed Chair Jerome Powell’s statements.
Earlier data showed US producer prices rose 2.4% y/y in April, below estimates of a 2.5% rise, and down from 2.7% in the previous reading.
US retail sales rose 0.1% in April, beating expectations of no change, but below March’s 1.4% increase.
US unemployment claims were unchanged at 229 thousand in the week ending May 10, same as the previous reading, and matching expectations.
Federal Reserve Chair Jerome Powell warned today from the increasing chances of supply shocks and subsequent higher prices in upcoming years, adding the Fed will amend its framework to account for fundamental changes in inflation and interest rate forecasts.
Otherwise, the dollar index fell 0.1% as of 18:59 GMT to 100.9, with a session-high at 101.06, and a low at 100.5.
On trading, gold spot prices rallied 1.1% as of 19:02 GMT, or $35.60 to $3224.1 an ounce.
Aussie falls and shrugs off strong employment data
The Australian dollar fell against most major rivals on Thursday despite strong labor data.
Australia's unemployment rate was unchanged in April at 4.1%, same as March, and matching expectations.
The Australian economy added 89.0 thousand new jobs in April, easily beating estimates of a 20.9 thousand addition, while March's reading was revised to show the addition of 32.2 thousand jobs instead of 36.4 thousand.
The data renewed inflationary pressures on the Reserve Bank of Australia’s policymakers, which hurt the odds of a rate cut in May.
On trading, the AUD/USD pair fell 0.4% as of 19:06 GMT to $0.6403.
Sterling
The GBP/USD price rose 0.2% as of 19:06 GMT to $1.3293.
Earlier government data showed the UK GDP growth rate at 0.2% in the first quarter, beating expectations of no changes.
The US Dollar
The US dollar index fell 0.1% as of 18:59 GMT to 100.9, with a session-high at 101.06, and a low at 100.5.
Earlier data showed US producer prices rose 2.4% y/y in April, below estimates of a 2.5% rise, and down from 2.7% in the previous reading.
US retail sales rose 0.1% in April, beating expectations of no change, but below March’s 1.4% increase.
US unemployment claims were unchanged at 229 thousand in the week ending May 10, same as the previous reading, and matching expectations.
Federal Reserve Chair Jerome Powell warned today from the increasing chances of supply shocks and subsequent higher prices in upcoming years, adding the Fed will amend its framework to account for fundamental changes in inflation and interest rate forecasts.
Wall Street falls after labor and inflation data
US stock indices fell on Thursday after important data, while investors collect recent profits.
Earlier data showed US producer prices rose 2.4% y/y in April, below estimates of a 2.5% rise, and down from 2.7% in the previous reading.
US retail sales rose 0.1% in April, beating expectations of no change, but below March’s 1.4% increase.
US unemployment claims were unchanged at 229 thousand in the week ending May 10, same as the previous reading, and matching expectations.
Federal Reserve Chair Jerome Powell warned today from the increasing chances of supply shocks and subsequent higher prices in upcoming years, adding the Fed will amend its framework to account for fundamental changes in inflation and interest rate forecasts.
On trading, Dow Jones fell 0.1% as of 17:07 GMT, or 15 points to 42037 points, while S&P 500 shed 0.1%, or 5 points to 5887 points, as NASDAQ dropped 0.5% to 19,054 points.