The PBOC allows the yuan to fluctuate within a +/- 2% range, around this reference rate.Injects 0.5bn yuan via 7-day reverse repos in open market operates today. Unchanged rate of 1.4%.–Bloomberg is reporting:Global central banks’ use of the People’s Bank of China’s swap lines reached a two‑year high in the first quarter, underscoring rising international demand for the Chinese currency This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight The PBOC’s recent actions signal a critical moment for traders focused on the yuan and broader forex markets. Injecting 0.5 billion yuan via reverse repos while maintaining the interest rate at 1.4% indicates a commitment to liquidity, but the +/- 2% fluctuation range suggests they’re cautious about volatility. This could lead to increased trading activity as market participants adjust their positions based on perceived stability or instability in the yuan. The spike in global central banks utilizing PBOC swap lines also highlights a growing reliance on the yuan, which could impact cross-border trade and investment flows. Traders should keep an eye on the yuan’s performance against major currencies, particularly the USD, as any significant moves could trigger broader market reactions. Look for key levels around the edges of that 2% fluctuation range for potential breakout or reversal signals. If the yuan approaches the upper or lower limits, it could prompt aggressive trading strategies. Also, monitor how other central banks react to these developments, as shifts in sentiment could ripple through related markets, including commodities and equities tied to Chinese economic performance. 📮 Takeaway Watch the yuan’s movement near its +/- 2% fluctuation range; significant breaks could lead to volatility in forex and related markets.

Australian business confidence edged up to -24 in April from -29 in March but remained deeply negative, as surging energy costs squeezed margins and conditions fell to their lowest since 2020, NAB data showed.Summary:NAB’s business confidence index improved marginally to -24 in April from -29 in March, remaining deeply negative after March’s second-largest monthly drop in the survey’s historyBusiness conditions fell 3 points to +3, the second-lowest reading since 2020 and the fourth consecutive monthly declineForward orders dropped a further 4 points in April, down 11 points since February and well below long-run averages; capital expenditure fell 8 points in the largest such drop of the post-COVID periodPurchase costs rose at a quarterly pace of 4.5%, significantly outpacing selling price growth of 1.8%, while retail price growth accelerated sharply to 3.2% from 0.6%The Reserve Bank of Australia has raised interest rates three consecutive times to reach 4.35%, with policymakers concerned that businesses passing on energy costs could entrench inflation expectationsAustralian business confidence remained deeply negative in April, edging only marginally higher after its historic collapse the previous month, as surging energy costs tied to the Middle East war continued to erode profit margins and dampen investment and hiring intentions, according to the National Australia Bank’s monthly survey.NAB’s business confidence index recovered slightly to -24 in April from -29 in March, a reading that had represented the second-largest monthly fall in the survey’s history. Despite the modest improvement, confidence remains at a level that points to widespread pessimism across the corporate sector. The bank’s separate measure of business conditions deteriorated further, falling 3 points to +3, its second-lowest reading since 2020 and the fourth consecutive monthly decline.The detail within the survey painted a picture of broadening economic pressure. Forward orders dropped a further 4 points in April, leaving them down 11 points since February and well below their long-run average. Capital expenditure slid 8 points, the steepest such fall in the post-COVID period, suggesting businesses are pulling back on investment plans in response to the uncertain outlook. Cash flow and employment measures also weakened noticeably, adding to evidence that the energy shock is feeding through from costs into activity.The cost picture was particularly stark. Purchase costs rose at a quarterly pace of 4.5%, far outstripping selling price growth of 1.8%, pointing to a significant margin compression that businesses are struggling to offset by raising prices. Retail price growth, however, accelerated sharply to 3.2% from just 0.6% the previous month, a development likely to draw close attention from the Reserve Bank of Australia.The RBA has already lifted interest rates three consecutive times to bring its cash rate to 4.35%, seeking to contain inflation that has proved stubborn in the face of elevated global energy costs. Policymakers have expressed concern that businesses passing rising energy expenses on to consumers could embed higher inflation expectations, complicating the path back to the bank’s target. The latest NAB data suggests that process is already underway, even as underlying business activity softens, leaving the RBA navigating an increasingly difficult trade-off between controlling prices and supporting a weakening economy. — The combination of deeply negative confidence and deteriorating conditions puts additional pressure on the Reserve Bank of Australia, which is already three rate hikes into a tightening cycle at 4.35% and now faces a stagflationary squeeze: energy-driven cost inflation running well ahead of selling prices, alongside weakening forward orders and capital expenditure. The gap between purchase costs rising at a 4.5% quarterly pace and selling prices at only 1.8% points to a margin compression that will restrain investment and hiring, potentially easing demand-side inflation pressures even as supply-side costs remain elevated. Markets pricing RBA policy will need to weigh whether the activity deterioration gives the bank cover to pause, or whether the retail price acceleration to 3.2% keeps the tightening bias intact. This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight Business confidence in Australia is still in the dumps, and here’s why that matters: The slight uptick in NAB’s business confidence index to -24 from -29 might seem like a silver lining, but it’s crucial to recognize that this figure is still deeply negative. This persistent negativity indicates that businesses are feeling the pinch from surging energy costs, which are squeezing margins and impacting overall economic conditions. For traders, this could signal a bearish sentiment in the Australian dollar, especially if energy prices remain elevated. Keep an eye on related sectors like utilities and commodities, as they may react to these ongoing pressures. Moreover, the fact that confidence levels are at their lowest since 2020 suggests a potential for increased volatility in the forex market, particularly for AUD/USD pairs. If the index continues to trend negatively, we might see further declines in the Australian dollar, which traders should be ready to capitalize on. Watch for key support levels around recent lows, as breaking these could trigger more aggressive selling. 📮 Takeaway Monitor the AUD/USD pair closely; if business confidence continues to decline, expect increased volatility and potential bearish moves below key support levels.

Japan and the US reaffirmed close coordination on currency markets, including intervention, after Finance Minister Katayama met Bessent in Tokyo, as Japan is suspected to have spent $63.5 billion defending the yen.Summary:Japanese Finance Minister Katayama said Japan and the US reaffirmed close cooperation on exchange rate moves, including currency intervention, following her meeting with Bessent in Tokyo on TuesdayBoth sides confirmed Japan’s intervention activity is consistent with a joint statement signed last September, which permits intervention to address excessive currency market volatilityJapan is suspected to have spent nearly 10 trillion yen, around $63.5 billion, in a recent round of yen-buying operations to support the currencyKatayama declined to comment on whether the Bank of Japan’s monetary policy was discussed at the meetingSome BOJ policymakers argued in April that rates may need to rise soon, with one member flagging the possibility of a move as early as JuneBessent is also expected to meet Prime Minister Takaichi during his three-day Tokyo visit, which runs until WednesdayJapan and the United States have reaffirmed their close cooperation on currency market moves, including on intervention, following a meeting in Tokyo between Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent on Tuesday.Katayama told reporters after the talks that both sides discussed recent market developments and confirmed that Japan’s approach to currency moves was consistent with a joint statement signed with the US last September. That agreement explicitly permits foreign exchange intervention to combat excessive market volatility, providing Tokyo with diplomatic cover for its recent operations. Japan is suspected to have spent close to 10 trillion yen, equivalent to around $63.5 billion, on yen-buying intervention in a recent round of market activity aimed at slowing the currency’s slide.Katayama said the two sides agreed they were coordinating extremely well on recent market moves, including exchange rates, and strongly reaffirmed the need to continue close coordination given current circumstances. When pressed on whether that language implied Washington could take a more active role in addressing sharp yen falls, she said discussions had focused on deepening coordination across various fronts, stopping short of any more specific commitment.The finance minister declined to comment when asked whether the Bank of Japan’s monetary policy had been discussed at the meeting, a notable omission given that Bessent has previously called for the BOJ to move faster on rate hikes as a more sustainable mechanism for supporting the yen. Some analysts had speculated ahead of the talks that he might renew those calls during his Tokyo visit.The BOJ rate path remains a live question. A summary of opinions from the central bank’s April meeting, released earlier this week, showed that some policymakers argued rates may need to rise soon, with one member explicitly flagging the possibility of a move in June. With oil prices elevated due to the Middle East conflict pushing up import costs and intensifying domestic price pressures, the case for earlier tightening has strengthened since the last meeting.Bessent is expected to meet Prime Minister Sanae Takaichi before his three-day Tokyo visit concludes on Wednesday, when he departs for Seoul for trade talks with Chinese counterpart He Lifeng ahead of the Trump-Xi summit.—Katayama’s framing of the bilateral relationship as coordinating extremely well on exchange rate moves amounts to a soft endorsement of Japan’s intervention from Washington, which carries meaningful deterrent value for yen bears. The reference to the September joint statement, which explicitly permits intervention to combat excessive volatility, gives Tokyo legal and diplomatic cover to continue its operations. However, the deliberate silence on BOJ policy leaves the market’s core question unanswered: whether Bessent pressed for faster rate hikes as the more durable solution to yen weakness. With one BOJ member flagging a potential June move and oil-driven inflation intensifying the case for tightening, the yen and Japanese government bond markets remain acutely sensitive to any further signals from either side. This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight Japan’s $63.5 billion yen defense signals serious currency volatility ahead. With the US and Japan coordinating on currency interventions, traders should brace for potential swings in the USD/JPY pair. This kind of intervention often leads to short-term price spikes, especially if the market perceives a lack of confidence in the yen’s stability. Watch for key levels around 145-150 in USD/JPY; breaking through these could trigger further intervention or market reactions. The broader implications could ripple through forex markets, affecting correlated assets like Japanese equities and commodities priced in yen. Keep an eye on economic indicators from both nations, as any shifts could prompt immediate market responses. On the flip side, while intervention might stabilize the yen temporarily, it raises questions about Japan’s long-term economic strategy. If traders start to doubt the effectiveness of these measures, we could see a sell-off in the yen, especially if inflation continues to rise in Japan. So, monitor the upcoming economic data releases closely for hints on future currency movements. 📮 Takeaway Watch USD/JPY around 145-150 for potential volatility; intervention could trigger sharp price movements in the near term.

Alphabet is planning its first yen-denominated bond sale across up to eight maturities, expected to total several hundred billion yen, as part of a broader push to fund $190 billion in AI capital spending this year.Summary:Alphabet is planning its first yen-denominated bond sale in a multi-tranche offering spanning maturities of three, five, seven, ten, fifteen, twenty, thirty and forty years, subject to demandThe issuance is expected to total several hundred billion yen, though the term sheet did not disclose a precise sizeThe deal is part of an effort to diversify Alphabet’s funding currencies and investor base; the company has previously issued bonds in euros, sterling, Canadian dollars and Swiss francsAlphabet’s capital spending doubled year-on-year in the first quarter and the company has guided for up to $190 billion in total capex this yearBig Tech is collectively expected to spend more than $700 billion on AI infrastructure in 2025, up sharply from $410 billion in 2024, driving increased reliance on debt marketsAmazon is separately preparing its first Swiss franc bond offering in a six-part deal; Alphabet has mandated Mizuho, Bank of America and Morgan Stanley to manage its yen transaction Alphabet, the parent company of Google, is preparing its first yen-denominated bond sale, according to a term sheet seen by Reuters, as the technology giant joins a growing cohort of American companies tapping overseas debt markets to fund the surging costs of artificial intelligence infrastructure.The offering will be structured across multiple tranches, with maturities spanning three, five, seven and ten years as well as longer-dated notes of fifteen, twenty, thirty and forty years, though one or more tranches may be dropped depending on investor demand and market conditions. The total size of the issuance was not disclosed in the term sheet, but a source with direct knowledge of the deal told Reuters the offering was expected to total several hundred billion yen.The move into the yen market reflects a deliberate strategy to diversify Alphabet’s funding base beyond its existing currency mix, which already includes euros, sterling, Canadian dollars and Swiss francs. Investor appetite for yen-denominated bonds has remained resilient despite the Iran war, with an expanding issuance pipeline heading into mid-year. Overseas participation in the Japanese bond market has also been rising as interest rates in Japan climb under the Bank of Japan’s gradual policy normalisation, making yen assets increasingly attractive to international issuers and buyers alike.The scale of Alphabet’s financing ambitions underscores the extraordinary capital demands of the AI race. The company’s capital expenditure doubled year-on-year in the first quarter, and Alphabet has indicated it expects to spend as much as $190 billion on infrastructure this year. Across the broader technology sector, AI-related capital spending is forecast to exceed $700 billion in 2025, a sharp acceleration from $410 billion the previous year. That spending trajectory has pushed large technology companies to lean increasingly on debt markets after years of relying primarily on their substantial internal cash flows.Alphabet is not alone in looking beyond dollar markets. Amazon is separately preparing its first Swiss franc bond offering in a six-part structure, underscoring that the move to diversify funding currencies is a sector-wide response to the scale of AI investment required rather than a company-specific decision.Mizuho, Bank of America and Morgan Stanley have been mandated to manage Alphabet’s yen transaction.—Alphabet’s debut in the yen bond market is a significant signal for Japanese fixed income, adding a high-grade foreign issuer to a market already seeing rising overseas participation as BOJ rate normalisation makes yen assets more attractive. The multi-tranche structure spanning maturities out to 40 years suggests strong confidence in Japanese investor appetite at current and anticipated yield levels. For broader markets, the scale of AI-driven debt issuance, with Big Tech expected to spend more than $700 billion on infrastructure this year alone, points to sustained corporate bond supply that will keep credit spreads under scrutiny. The parallel move by Amazon into Swiss franc issuance underlines that the diversification away from dollar funding is a sector-wide trend rather than an Alphabet-specific decision. This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight Alphabet’s yen-denominated bond sale is a significant move for traders to watch closely. By tapping into the Japanese bond market, Alphabet is not just diversifying its funding sources but also signaling confidence in its ambitious $190 billion AI capital spending plan. This could have ripple effects across tech stocks and the broader market, especially if investors view this as a bullish indicator for AI investments. Traders should keep an eye on how this bond issuance impacts the yen’s strength against the dollar, as fluctuations could create trading opportunities in forex pairs. Additionally, monitor the performance of related tech stocks that might react to Alphabet’s funding strategies. If the bond sale is successful, it could set a precedent for other tech giants to follow suit, potentially leading to increased liquidity in the market. On the flip side, if market conditions shift or interest rates rise, Alphabet’s bond sale could face headwinds, impacting investor sentiment. Watch for key economic indicators from Japan and the U.S. that could influence bond yields and currency valuations in the coming weeks. 📮 Takeaway Keep an eye on Alphabet’s yen bond sale; it could influence tech stocks and forex dynamics, especially if it signals broader market confidence in AI investments.

Incoming Fed Chair Warsh is going to be facing well above target inflation.Wall Street Journal Fed watcher Nick Timiraos reports on expectations: This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight Inflation pressures are mounting, and here’s why that matters for traders: With incoming Fed Chair Warsh stepping into a landscape of inflation well above target, market participants need to brace for potential shifts in monetary policy. The Fed’s response to inflation can significantly impact asset classes, especially equities and bonds. If Warsh leans towards aggressive rate hikes, we could see a tightening of liquidity that might trigger volatility across markets. Traders should keep an eye on key economic indicators, such as CPI and PCE, which could influence the Fed’s decisions in the coming months. Moreover, the ripple effects could extend to the forex market, particularly affecting USD pairs. A stronger dollar could put pressure on commodities and emerging markets, which often struggle in high-rate environments. Watch for technical levels in major indices; a break below recent support could signal a bearish trend. The real story is how quickly the market adjusts to Warsh’s policies, so monitoring Fed communications will be crucial for positioning ahead of potential rate changes. 📮 Takeaway Watch for CPI and PCE data releases; aggressive Fed action could lead to volatility in equities and a stronger dollar impacting commodities.

What are investment banks expecting in US April inflation data? (It ain’t pretty)Alphabet plans first yen bond sale to fund $190 billion AI spending pushRecap – Japan and US reaffirm currency cooperation after Bessent’s Tokyo talksAustralian business confidence remains deeply pessimistic, -24 in April (prior -29)PBOC sets USD/ CNY central rate at 6.8426 (vs. estimate at 6.7945)Katayama says two-hour Bessent talks covered forex, critical minerals and AITrump weighs return to combat as Iran nuclear talks falter, CNN reportsTrump delays beef tariff cut after rancher and Republican pushbackBessent heads to Tokyo pressing Japan on yen weakness and interventionBOJ ‘Summary” – Japan rate hike back on table as BOJ signals next move still likely upwardJapan March household spending fell 2.9% y/y (expected -1.5%, prior -1.8%)New Fed Chair Warsh could be locked in as soon as TuesdayUK consumer spending falls for first time since 2024 as Iran war bitesGoldman Sachs pushes Fed rate cut forecast to December 2026ICYMI – JPMorgan warns of $150 oil and 4% inflation as energy crisis deepensS&P 500 could hit 8,000 HSBC strategists sayThe latest Trump pump: US to loan 53.3 million barrels from Strategic Petroleum ReserveinvestingLive Americas FX news wrap 11 May: Markets stall as Iran tensions simmerUAE carried out covert strikes on Iran as Gulf war escalated, WSJ report saysAt a glance:Oil and the USD held firm as US-Iran pessimism deepened; Trump said the ceasefire is “on life support” on Monday, with CNN reporting he is now more seriously considering a return to major combat operations, frustrated by the Hormuz closure and stalled nuclear talksThe Bank of Japan held rates at its April meeting but its Summary of Opinions, published Tuesday, warned that upside inflation risks are rising, with several members flagging possible hikes as soon as the next meetingAustralian business confidence edged up to -24 in April from -29 in March but remained deeply negative, with conditions falling to their lowest since 2020 as energy costs squeezed margins, NAB data showedJapan and the US reaffirmed close coordination on currency markets, including intervention, after Finance Minister Katayama met Treasury Secretary Bessent in Tokyo; Bessent is expected to meet Prime Minister Takaichi before his visit concludes WednesdayJapan’s Nikkei remained supported but South Korea’s KOSPI pulled back sharply after touching an all-time high just below 8,000, as investors used Middle East uncertainty as a cue to book profitsOil and the US dollar held firm on Tuesday as sentiment over the US-Iran conflict darkened further. Trump described the ceasefire as on life support on Monday, and CNN reported that he is now more seriously weighing a return to major combat operations, frustrated by the continued closure of the Strait of Hormuz and the lack of meaningful progress in nuclear negotiations. His national security team met at the White House on Monday to review options, though a major decision is not expected before the president’s departure for China.The Bank of Japan kept its policy rate unchanged at its April meeting, but the Summary of Opinions published on Tuesday struck a notably hawkish tone, with board members warning that upside inflation risks are growing as crude oil prices surge. Several members flagged the possibility of a rate hike as soon as the next meeting.In Australia, business confidence remained deeply depressed in April despite a marginal recovery to -24 from -29 in March, which had represented the second-largest monthly drop in the survey’s history. Business conditions fell to their second-lowest reading since 2020, with capital expenditure recording its steepest post-COVID decline as energy costs bit hard into margins.In Tokyo, Finance Minister Katayama confirmed that Japan and the US reaffirmed close coordination on currency markets, including on intervention, following her meeting with Bessent. Both sides said Japan’s recent yen-buying activity is consistent with a joint statement signed last September. Bessent is expected to meet Prime Minister Takaichi before leaving for Seoul on Wednesday. Equity markets were mixed, with Japan’s Nikkei holding up while South Korea’s KOSPI retreated sharply after briefly touching an all-time high just below 8,000, as investors took the heightening Middle East uncertainty as a cue to lock in gains, and a South Korean official suggested citizens should receive an “AI dividend” funded by taxes on AI-related profits.Coming up:The US April CPI report is due at 1230 GMT / 0830 Eastern, and will be closely watched given the inflation pressures building across major economies. Via the Wall Street Journal , what’s expected:At 1130 Eastern the Senate is expected to vote to confirm Kevin Warsh as a Federal Reserve governor for a 14-year term, setting up a second vote on his nomination as Fed chair likely on Wednesday.Australia is expected to report a narrower than forecast budget deficit this evening, banking commodity-driven revenue windfalls, alongside the most significant property tax reforms the country has seen in decades.Later this week, Trump arrives in Beijing on Wednesday. On Thursday, he participates in a greeting with President Xi Jinping at 10:00am local time, followed by a bilateral meeting at 10:15am and a State Banquet at 6:00pm. Friday’s schedule includes a Friendship Photo at 11:30am, a Bilateral Tea at 11:40am and a working lunch at 12:15pm. This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight April’s inflation data is looming, and here’s why it matters: investment banks are bracing for disappointing figures that could shake market sentiment. With the US economy showing signs of strain, especially as Australian business confidence dips to -24, traders need to keep a close eye on inflation metrics. If inflation comes in higher than expected, it could prompt the Fed to maintain or even increase interest rates, impacting everything from equities to forex pairs. The USD/CNY central rate set by the PBOC will also be crucial, as any volatility here could ripple through global markets. Watch for key levels around recent highs in inflation-linked assets, as a breakout could signal a shift in trading strategies. But here’s the flip side: if inflation surprises to the downside, we might see a rally in risk assets as traders

Japan is estimated to have spent over $60 billion in intervening in the market recently and they don’t have very much to show for it. The intervention efforts since the start of May in particular have not bore much fruit, with traders pushing back quite swiftly after the fact. And following their latest attempt last week, we’re starting to see more of the same again. USD/JPY is trading back up above the 157.00 level, as traders look to test the limits of Tokyo officials once more.The move higher comes despite a more mixed dollar, with broader markets still retaining some optimism over the US-Iran situation. While oil prices and bond yields are staying elevated, the dollar hasn’t really made strides in the past week. So, one can definitely argue that the yen side of the equation is also doing the talking here.The fact of the matter remains that the fundamental factors in play right now are overwhelmingly bearish for the yen. And as the US-Iran conflict prolongs, the negative impact will just continue to drag on. There is a massive headwind for the Japanese economy, adding strain to both the financial and fiscal sides. Not only that, it also complicates the BOJ outlook amid cost-push inflation being put into the mix.We have covered those factors time and time again, and they continue to stick along with the Takaichi trade running in the background.So, will we see Japan’s ministry of finance decide to come back into the market again?The meeting between Bessent and Katayama today looks to be one for the optics more than anything else. However, it would be safe to assume that Bessent will also have delivered a subtle suggestion to Tokyo so as to not overdo it in terms of intervening in the market. Besides that, the ministry of finance will also have to be wary of the IMF warning here.The issue for Japan now is that they have already shown their hand and the cards they want to play. Sure, they can tolerate a bit of pushback from the market after the recent intervention action. However, are they going to let USD/JPY run back up closer to 160? I doubt so. It would just look extremely bad and traders will punish them even more the next time around.That being said, it doesn’t mean that Tokyo officials will find it easy to keep intervening in the near-term. Even outside of the fact of the IMF warning, their decision to intervene last week amid low liquidity conditions was arguably a poor choice of signaling. Yes, they might save some ammunition in doing so. However, the crux of the message might not hit markets as hard:”It might sound counter-intuitive to not want to act during low liquidity periods, but there’s a certain nuance to it. The main thing about intervention isn’t so much so as the money but more so about the signaling. You want enough players in the market to get that signal and amplify it, so as to get the idea that “we shouldn’t mess with the MOF/BOJ”. Otherwise, that signal can get lost in translation if there isn’t enough liquidity follow through. And at the end of the day, it might just be passed off as more noise than an actual leading signal to traders.”Now, they’re left to clean up the mess from last week’s efforts as the intervention play comes to naught. They perhaps might have the appetite to go big again for another one or two more times at best.But if traders keep pushing back, Japan’s ministry of finance might be put in a tough spot on thinking about what to do next. From before:”Now, everyone knows that Tokyo has one of the biggest war chests in terms of foreign currency reserves. They have a whopping $1.2 trillion to work with. However, it is important to note that not all of this is in liquid cash deposits. In fact, over 80% of that are in securities which primarily consist of US Treasuries among other foreign government bonds.So, it is not to say that they have an “unlimited” tap to keep drinking from if they burn out their cash reserves. If that were to be the case, it’s a tricky situation for the ministry of finance. If it were to come to that, selling Treasuries may have the unintended effect of pushing US yields higher and that is an indirect tailwind for the dollar instead. So, that sort of achieves the opposite effect of what Tokyo wants; that is for a lower USD/JPY.Of course, it’s not as simple as that. However, all of this is part and parcel to the equation and it all adds up to how markets react at the end of the day. As such, that is something I reckon Tokyo officials will want to avoid for as long as they can.” This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight Japan’s $60 billion market intervention isn’t yielding results, and here’s why that’s crucial for traders: The lack of effectiveness in Japan’s recent forex interventions, especially since May, signals a potential shift in market dynamics. Traders are clearly skeptical, pushing back against the yen’s stabilization efforts. This could lead to increased volatility in the USD/JPY pair, especially if the Bank of Japan continues to intervene without tangible results. Watch for key resistance levels around recent highs; if the yen fails to hold, we might see a further depreciation, impacting not just forex but also equities tied to Japanese exports. On the flip side, if the intervention does start to show signs of success, it could create a short-term rally in the yen. However, the current sentiment suggests traders are more inclined to bet against the yen. Keep an eye on economic indicators from Japan and the U.S. that could sway this narrative, particularly any shifts in interest rates or inflation data. The next few weeks will be critical for gauging the effectiveness of Japan’s strategy and its

Bessent comments on Twitter/X:”In my meeting with Minister @satsukikatayama , I was pleased to reaffirm the strong economic partnership between the United States and Japan. The level of communication and coordination between our teams in addressing undesirable, excess volatility in currency markets continues to be constant and robust. I congratulated the Minister on Japan’s strong economic resiliency, and we held positive discussions on the US-Japan investment agreement, our shared efforts on critical minerals, and the United States’ support for Japan as it works to build an investment screening mechanism.”This builds on the takeaway from earlier in the day here.All in all, there isn’t too much to gather from their meeting today. It’s basically just the US acknowledging Japan’s plight and giving the nod to recent intervention moves from Tokyo. There was no commitment from either side in getting Washington involved to do any joint intervention efforts.In the bigger picture, you can bet that Bessent probably dropped a subtle hint to Katayama so as to not take things too far when going at intervention alone. That might invite some political risks when it comes to the optics with the US needing to draw the line in labelling one of its closest allies as a ‘currency manipulator’. This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight The ongoing dialogue between the U.S. and Japan about currency volatility is a big deal for forex traders right now. With both nations focused on stabilizing their currencies, we could see significant interventions or policy shifts that might impact USD/JPY and other pairs. If the yen strengthens due to coordinated efforts, it could create short-term trading opportunities for those looking to capitalize on volatility. Traders should keep an eye on economic indicators from both countries, especially any changes in interest rates or inflation data, as these will likely influence currency movements. The real story here is how this partnership could ripple through other markets, potentially affecting commodities and equities tied to the dollar and yen. Watch for any announcements or policy changes in the coming weeks that could signal a shift in market dynamics. 📮 Takeaway Monitor USD/JPY closely for volatility spikes; any coordinated interventions could create trading opportunities in the near term.

There are just a couple of expiries to take note of on the day, as highlighted in bold below.They are for EUR/USD at the 1.1745-50 levels. These don’t tie too much to any technical significance but they do sit in between key near-term technical levels. The 100 and 200-hour moving averages rest at 1.1758 and 1.1734 respectively. So, the expiries are placed in between that layer and perhaps may offer some pull in keeping price action more grounded in the session ahead.Dollar sentiment has been a little mixed to start the week with the 1.1800 mark still capping EUR/USD upside for now. And with US-Iran developments being dealt a setback, we’re now seeing the dollar push up a little today. It’s not much but it could keep EUR/USD locked closer to the expiries level before rolling off later in the day.That unless of course we get any headlines from the Middle East to shake things up. However, that is not likely for now as US president Trump is gearing up to prepare for his trip to Beijing tomorrow.As such, markets will be sidetracked a little as the US-Iran conflict continues to brew in the background. That remains the key risk for trading sentiment for the coming days regardless.For more information on how to use this data, you may refer to this post here. This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight EUR/USD is flirting with the 1.1745-50 range, and here’s why that matters: With expiries clustering around this level, traders should keep an eye on how price reacts. While these levels don’t hold significant technical weight, they sit between the 100 and 200-hour moving averages, which could create a battleground for buyers and sellers. If the pair breaks above 1.1750, we might see a push towards the next resistance level, potentially drawing in momentum traders. Conversely, a failure to hold this range could trigger a sell-off, especially if we see a close below the 1.1730 mark. It’s also worth noting that the lack of strong technical significance at these expiry levels might lead to a more volatile reaction than usual, as traders could be caught off guard. Keep an eye on volume and market sentiment around these expiries, as they could provide clues for the next move. Watch for any shifts in the broader market context, especially with upcoming economic data releases that could impact the Euro or the USD. 📮 Takeaway Monitor the EUR/USD around the 1.1745-50 range; a break above 1.1750 could lead to bullish momentum, while a drop below 1.1730 may trigger selling pressure.

CPI +2.9% vs +2.9% y/y prelimPrior +2.7%HICP +2.9% vs +2.9% y/y prelimPrior +2.8%Core CPI +2.3% y/yPrior +2.5%Headline inflation pressures continue to tick higher in Europe’s largest economy, largely due to a surge in energy prices. That comes as no surprise with it being part of the fallout from the US-Iran conflict. Of note, overall energy product prices in April 2026 were 10.1% higher than in April 2025. And even when compared to the previous month, there were up significantly (+7.2%).In particular, fuel prices saw a sharp increase within the year (+26.2%) but even household energy price spending also jumped up sharply with light heating oil seeing a surge of +55.1% within the year.The good news at least is that this is not quite translating to core prices just yet. In fact, core annual inflation ticked lower to 2.3% on the month. But the longer the US-Iran conflict drags on, higher energy prices will become more embedded in other parts of the inflation picture down the road. So, that’s the real risk.Looking at the breakdown, food price inflation rose by a below average 1.2% estimate (previously 0.9%) while services inflation rose by 2.8% (previously 3.2%). The drops there are what led to core prices nudging a bit lower on the month in April. But as mentioned above, the major risk to the outlook will come from higher energy prices spilling over to other areas in due time. This article was written by Justin Low at investinglive.com. 🔗 Source 💡 DMK Insight Headline inflation in Europe is rising, and here’s why that matters for traders: With CPI hitting 2.9%, up from 2.7%, and core CPI at 2.3%, the pressure is mounting on the European Central Bank (ECB) to adjust its monetary policy. Energy prices are a significant driver, influenced by geopolitical tensions, particularly the fallout from the US-Iran situation. This could lead to tighter monetary conditions, impacting interest rates and, consequently, the euro’s strength against other currencies. Traders should watch for potential ECB responses, as any hints of rate hikes could strengthen the euro and affect forex pairs like EUR/USD. On the flip side, rising inflation could also stoke fears of stagflation, which might lead to increased volatility in equity markets. If traders anticipate a more aggressive ECB, they might position for a stronger euro, but they should also be cautious of potential market overreactions. Key levels to monitor include the 1.05 support level for EUR/USD; a break below could signal bearish sentiment. Keep an eye on upcoming ECB meetings for any shifts in policy direction. 📮 Takeaway Watch the EUR/USD closely; a break below 1.05 could indicate bearish sentiment as inflation pressures rise.