Asia Summary and Highlights 28 May
Trump hasn't sign the ceasefire deal yet
Tokyo May headline CPI 1.4% y/y
Asia Session
Tokyo May headline CPI came in at 1.4% y/y, with ex-fresh food at 1.3% and ex fresh food & energy at 1.6%. It clearly shows the inflationary pressure being artifically cushioned by extension of energy stimulus. Yet, it cannot be ignored that household consumption is also weaker despite real wage positive. USD/JPY is trading 0.04% higher at 159.29.
The risk sentiment is still undecided as Trump hasn't signed the ceasefire deal yet. It looks like background negotiations are still going through wordings of a nuclear deal while in the front we heard more bombings. U.S. major equity indexes are more cautious than regional counterpart while precious metals are performing individually. AUD/USD is trading 0.03% higher at 0.7165. NZD/USD is trading 0.39% higher on Governor Breman's hawkish rhetoric following the RBNZ's hold earlier in the week. Else, USD/CAD is up 0.03%, EUR/USD is down 0.08% and GBP/USD is down 0.04%.
North American session
The USD slipped in North America largely on a report from Axios that US and Iranian negotiators had reached a deal to extend the ceasefire for 60 days and start negotiations on Iran’s nuclear program, while reopening the Strait of Hormuz, though Trump’s approval was still needed.
US data was also on balance on the soft side of expectations, with core PCE prices up a lower than expected 0.2% in April, with a weak unchanged personal income outcome which was well below an as expected 0.5% rise in spending. Q1 GDP revised down to 1.6% from 2.0% and weekly initial claims rose to 215k from 210k. April durable goods orders were however strong, up by 7.9% and 1.1% ex transport. Later a 6.2% fall in April new home sales to 622k was announced. Comments from Fed’s Williams were quite moderate, outweighing a more hawkish tone from Musalem, who has no vote in 2026.
USD/JPY fell below 158.30 from above 158.40, while EUR/USD rose to 1.1650 from 1.1630. There was little movement in EUR/GBP but EUR/CHF fell to .9130 from .9150. AUD/USD advanced to .7160 from .7125 while USD/CAD slipped to 1.3780 from 1.3850.