Asia Summary and Highlights 5 Jun

Asia Session

While under the pressure of U.S. tariffs, the Japan April labor cash earning continues to grow above 2% at 2.3% y/y. It seems to suggest Japanese business did not turn towards cutting cost from wage but it is not completely out of the woods yet as the majority of tariff talk comes after April.  Yet, with real wage stays negative and falling JGB yields, JPY gets little support and see USD/JPY trades 0.17% higher at 143.

The Australian economics release on Thursday are mixed. With export missing at -2.4% m/m, import returned to expansion at 1.1%. Australian Household spending at 3.7% y/y suggest private consumption is indeed gaining traction. Regional equities, expect Japanese equities, are outperforming U.S. major equity indexes. AUD/USD is unchanged at 0.6492, NZD/USD is trading 0.07% higher at 0.6029 while USD/CAD is unchanged. Else ,EUR/USD and GBP/USD is down 0.06%.

North American session

The USD fell on weak US data, firstly a rise of only 37k in May’s ADP estimate of private sector employment, the weakest since March 2023, and then a fall in May’s ISM services index marginally below neutral at 49.9 from 51.6. UST yields were also lower but equities were resilient. There was no response to the Fed’s Beige Book reporting a slight decline in activity. USD/JPY fell below 143 from above 144 and EUR/USD rose to 1.1415 from 1.1385. 

EUR/GBP was marginally firmer but EUR/CHF slipped to .9345 as EUR/JPY fell to near 163. There was little response to the Bank of Canada meeting which saw rates left unchanged waiting for more information, though Governor Macklem suggested rates could be eased in the future.  USD/CAD slipped to 1.3675 from 1.37 on USD weakness, while AUD/USD gains from .6465 peaked near .65.