Asia Summary and Highlights 30 May
U.S. Treasury Secretary Bessent says US-China talks stalled
Japan economy minister Akazawa Will take appropriate actions re tariffs
Tokyo May 2025 headline CPI +3.4% y/y
Asia Session
The reversal in USD/JPY continues after the back and forth result of court ruling on Trump's tariff even the Japanese officials remain on their course to trade talks. It is also helped by Tokyo CPI staying above 3% y/y at 3.4%, ex fresh food is at its highest since January 2023 at 3.6% y/y, ex fresh food & energy at 3.3% y/y, also a yearly high. USD/JPY is trading 0.19% lower at 143.89 with 10yr JGB yields below 1.5%.
U.S. Treasury Secretary Bessent says US-China talks stalled, putting a lid on the broad equity market. It is a sea of red for major equity indexes with HSI and Nikkei down more than a percent with USD trading broadly higher. AUD/USD is down 0.2% to 0.6429, NZD/USD is trading 0.05% higher at 0.5917 with RBNZ's assist governor saying 2.5-3.5% is neutral rate while USD/CAD rise 0.09%. Else, EUR/USD is down 0.18% and GBP/USD is down 0.13%.
North American session
The USD slipped in North America with UST yields while equities saw a limited response to the court ruling against tariffs, which Trump looks set to fight. The move was already under way before given extra momentum by a rise in initial claims to 240k from 226k. Q1 GDP was revised up to -0.2% from -0.3% but consumer spending as revised down to 1.2% from 1.8%. Core PCE prices were revised down to 3.4% from 3.5%. Later April pending home sales plunged by 6.3%.
USD/JPY fell to 144 from 145 and EUR/USD rose to 1.1375 from 1.1275. GBP/USD reached 1.35 but lagged EUR/USD, as EUR/GBP rise to .8425 from .8375. AUD and CAD saw only marginal gains versus the USD. There was little market reaction to a Fed statement that Powell had met with Trump and resisted pressure to cut rates, or later the Trump tariffs being reinstated while the appeal proceeded.