We had CPI data earlier, along with jobs. I’ve included those results in the screenshot for retail and industry data ICYMI:More on the inflation data here:Tokyo core CPI misses forecasts in May, complicating case for BOJ June rate hike This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight Tokyo’s core CPI missing forecasts is a big deal for traders right now. With inflation data coming in weaker than expected, the Bank of Japan’s potential June rate hike is now in jeopardy. This could lead to a weaker yen, impacting forex traders who are shorting the currency. If the BOJ decides to hold off on tightening, we might see a shift in market sentiment, pushing the USD/JPY pair higher. Keep an eye on the 135 level for USD/JPY; a break above could signal a stronger bullish trend. Moreover, this CPI miss could ripple through related markets, affecting commodities and equities tied to Japanese economic performance. But here’s the flip side: if the BOJ surprises the market with a rate hike despite the CPI data, we could see a sharp reversal in yen pairs. So, traders should monitor not just the CPI but also any BOJ commentary leading up to the June meeting. The immediate focus should be on the next few days as traders digest this data and position themselves accordingly. 📮 Takeaway Watch the USD/JPY level at 135; a break above could indicate a bullish trend if the BOJ delays a rate hike.

Japanese Finance Minister Katayama said decisive action can be taken against yen volatility, declining to confirm intervention history, as the MOF prepares to release intervention data covering late April to May 27 at 1900 JST:1000 GMT0600 US Eastern time Summary:Finance Minister Katayama said at a regular press conference that decisive action can be taken when there is volatility or speculative movement in foreign exchange markets, per ReutersKatayama declined to confirm or deny whether intervention has been conducted, in line with standard MOF procedure, per ReutersThe yen was approaching the 160-per-dollar level at the time of the press conference, per ReutersThe Ministry of Finance is scheduled to release intervention data at 1900 JST Friday covering the period from April 28 to May 27, per MOF scheduleSources previously told Reuters that Japan intervened in the currency market on multiple occasions since late April, with Bloomberg analysis of BOJ accounts suggesting up to ¥10 trillion was deployedThe intervention data release follows a softer-than-expected Tokyo core CPI print for May, which came in at 1.3% year-on-year against a 1.5% forecast, adding downward pressure on the yenJapanese Finance Minister Satsuki Katayama reiterated Friday that Tokyo stands ready to take decisive action against excessive yen volatility, keeping the market on notice as the currency approached the closely watched 160-per-dollar threshold and official intervention data prepared to drop later in the day.Speaking at a regular press conference, Katayama said the government has long maintained that speculative or disorderly movement in foreign exchange markets can be met with forceful action. She declined to confirm or deny whether intervention had taken place in recent weeks, adhering to the standard MOF position of neither confirming nor commenting on specific operations ahead of official data releases.The timing of the remarks was pointed. The yen was pressing back toward 160 per dollar at the time of the press conference, having surrendered most of the gains made during what sources described as multiple rounds of intervention in late April and through the Golden Week holiday period ending May 6. Bloomberg analysis of Bank of Japan accounts had previously suggested that up to ¥10 trillion was deployed during that window, though the official figure covering the full April 28 to May 27 period was not due until 1900 JST Friday.That data release will be the session’s defining event for yen markets. Traders have been scrutinising the MOF figure not only for the scale of past spending but for what it implies about the ministry’s tactical approach. A headline number significantly above ¥10 trillion would confirm a large concentrated operation but may raise questions about its lasting effectiveness given the yen’s subsequent retreat. A lower figure could indicate that smaller, targeted deployments were also conducted during May, which strategists have said would likely prompt the market to anticipate a more active and ongoing intervention posture.The yen’s renewed weakness into Friday comes against an unhelpful backdrop. Earlier in the session, Tokyo core CPI for May printed at 1.3% year-on-year, below the 1.5% forecast and extending a six-month run of slowing inflation. The miss, while partly attributable to government subsidies on utilities and tuition, nonetheless reduces the urgency of a near-term BOJ rate hike and leaves the interest rate differential with the United States largely intact. That differential remains the primary structural driver of yen weakness, and until it narrows, intervention is widely viewed as a mechanism for managing the pace of depreciation rather than reversing it.Katayama has US backing for her stance, with Treasury Secretary Scott Bessent having previously described excess foreign exchange volatility as undesirable, a formulation read by markets as tacit American endorsement of Japan’s recent operations. Goldman Sachs has estimated Japan retains sufficient reserve capacity to repeat a late-April-scale intervention around 30 more times, though it expects authorities to deploy that firepower selectively rather than continuously.With the BOJ’s June (15-16) meeting approaching and overnight index swaps still pricing a meaningful probability of a hike despite the soft CPI data, the 1900 JST intervention figures will feed directly into how markets assess both the yen outlook and the central bank’s room to move.—Katayama’s comments are deliberately calibrated to keep the market guessing ahead of the 1900 JST data release. The refusal to confirm or deny past intervention is standard MOF procedure, but reiterating the decisive action language at a regular press conference while the yen is pressing toward 160 is a clear warning shot. The intervention figure itself, covering the period from April 28 to May 27, will be the more significant market event: a number meaningfully above ¥10 trillion could paradoxically weigh on the yen if traders read it as evidence that a large spend failed to hold the line, while a lower figure may imply a tactical approach that the market will immediately test. Coming on the same day as the softer-than-expected Tokyo CPI print, which itself removed some urgency from the BOJ’s near-term hiking case, the yen faces a confluence of pressures heading into the data release. This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight Yen volatility is back in focus, and here’s why traders need to pay attention: Finance Minister Katayama’s comments signal a readiness to act against fluctuations in the yen, which could mean imminent intervention. With the Ministry of Finance set to release intervention data from late April to May 27, traders should brace for potential market shifts. If the data reveals significant intervention, it could strengthen the yen temporarily, impacting USD/JPY trading strategies. Watch for the 1900 JST release, as it may provide clues on the MOF’s stance and future actions. But there’s a flip side: if the intervention data shows minimal action, it could lead to increased selling pressure on the yen, especially if global economic conditions remain shaky. Traders should keep an eye on the 140 level in USD/JPY; a break above could signal a bearish trend for the yen. Overall, volatility is expected, so position sizing and risk management will be crucial in the coming days. 📮

The PBOC allows the yuan to fluctuate within a +/- 2% range, around this reference rate. More here.Injects 123bn yuan via 7-day reverse repos in open market operates today. Unchanged rate of 1.4%. This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight The PBOC’s recent injection of 123 billion yuan signals a proactive stance in managing liquidity, and here’s why that matters: By maintaining the interest rate at 1.4% while allowing the yuan to fluctuate within a 2% range, the central bank is likely trying to stabilize the currency amidst ongoing economic pressures. This move could attract traders looking for short-term opportunities in the forex market, particularly those focused on the yuan’s volatility. If the yuan approaches the upper or lower limits of its fluctuation range, it could trigger significant trading activity. Keep an eye on how this liquidity injection impacts the broader market, especially in commodities and equities tied to Chinese economic performance. On the flip side, while this might seem like a stabilizing measure, it could also indicate underlying economic weaknesses that traders should be wary of. If the yuan weakens significantly, it could lead to capital outflows, impacting related assets like gold or emerging market currencies. Watch for any shifts in market sentiment that could arise from these developments, particularly in the coming weeks as traders react to the PBOC’s strategies. 📮 Takeaway Monitor the yuan’s movement within its 2% fluctuation range; significant shifts could create trading opportunities, especially if liquidity impacts broader markets.

RBNZ Governor Anna Breman said the OCR is likely to increase sooner and by more than previously signalled, citing Middle East conflict-driven inflation, weaker growth and rising input costs across New Zealand and its trading partners.Summary:RBNZ Governor Anna Breman said the global economic backdrop remains uncertain, with supply chain disruptions and higher input costs weighing on the outlook, per RBNZBreman said New Zealand and its trading partners are likely to experience weaker growth alongside higher near-term inflation as a consequence of the Middle East conflict, per RBNZBreman warned that expectations of higher costs could themselves keep inflation elevated, per RBNZBreman said the OCR is likely to increase sooner and by more than previously signalled, per RBNZThe comments follow remarks by RBNZ Assistant Governor Karen Silk earlier this week indicating the bank’s bias is toward rate increases at coming meetings and that July is a live decision, per RBNZANZ Research had already flagged expectations of RBNZ rate hikes beginning in July, targeting a return to a neutral OCR of around 3%, per ANZ ResearchReserve Bank of New Zealand Governor Anna Breman delivered the central bank’s most explicit tightening signal of the current cycle on Friday, saying the Official Cash Rate is likely to rise sooner and by more than the bank had previously indicated, as the Middle East conflict drives a combination of weaker growth and higher near-term inflation across New Zealand and its trading partners.Breman framed the shift in explicit terms, pointing to a global backdrop that remains deeply uncertain, with supply chain disruptions and rising input costs bearing down on the economic outlook. She said New Zealand would not be insulated from those pressures, with both the domestic economy and key trading partners likely to absorb weaker growth alongside an inflation pulse that shows little sign of easing quickly.The governor also flagged a risk that has become increasingly central to the RBNZ’s concern: that expectations of higher costs could themselves become a driver of sustained inflation, creating a self-reinforcing dynamic that monetary policy must move to arrest before it becomes entrenched. That framing gives the bank explicit cover to hike even as growth weakens, prioritising price stability over near-term activity support in a manner consistent with its mandate.The comments cement a hawkish turn that has been building at the RBNZ through the week. Assistant Governor Karen Silk said on Thursday that the bank’s bias is toward rate increases at coming meetings, that it does not need to wait for a quarterly CPI print before acting, and that even a swift end to the Middle East conflict would not fully unwind the inflationary damage already done. Breman’s Friday remarks go further, moving from a directional signal to something closer to a commitment on both timing and magnitude.The broader data context supports the hawkish shift. This week’s ANZ-Roy Morgan consumer confidence survey showed two-year inflation expectations at 5.3% in May, down from a record 6.6% in April but still elevated by historical standards. ANZ Research has separately projected that the RBNZ will move the OCR back toward a neutral setting of around 3% sooner rather than later, with July as the likely starting point for the hiking sequence.The New Zealand dollar had already strengthened following the RBNZ’s hold earlier this week, which was accompanied by hawkish guidance. Breman’s explicit signal that the pace and scale of hikes will exceed prior projections adds further upward pressure on the currency and is likely to prompt a significant repricing at the front end of New Zealand’s interest rate curve. For a central bank that has been navigating the competing pressures of conflict-driven inflation and slowing domestic demand, Friday’s remarks mark a clear decision to prioritise the inflation fight.—This is the most explicit hawkish guidance the RBNZ has delivered in this cycle. “Sooner and by more than previously signalled” is unambiguous forward guidance, and combined with Assistant Governor Silk’s remarks earlier this week pointing to rate increases at coming meetings and a July bias, the RBNZ has now effectively pre-committed to a tightening path. The New Zealand dollar should find firm support on the comments, and the front end of the domestic rates curve is likely to reprice materially. The acknowledgement that inflation expectations themselves could keep prices elevated adds a self-reinforcing dimension to the hiking argument that gives the bank cover to move aggressively even if activity data softens. The growth warning is secondary for markets at this point: the RBNZ has signalled it will hike through weakness if necessary. This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight RBNZ’s shift on OCR signals potential volatility ahead for NZD traders. With Governor Anna Breman hinting at a sooner and larger increase in the Official Cash Rate (OCR), traders need to brace for market reactions. The mention of inflation driven by Middle East conflicts and rising input costs suggests that the RBNZ is responding to pressures that could affect economic stability. This could lead to a stronger NZD in the short term, especially if traders anticipate aggressive rate hikes. However, the uncertainty around global growth and supply chain issues could create a tug-of-war for the currency. Traders should keep an eye on key levels for NZD/USD, particularly if it approaches recent resistance points. A breakout above those levels could signal a bullish trend, while failure to maintain momentum could lead to a pullback. Watch for upcoming economic data releases that might influence the RBNZ’s decisions, as well as geopolitical developments that could exacerbate inflationary pressures. The next few weeks will be crucial for positioning in the NZD market. 📮 Takeaway Monitor NZD/USD resistance levels closely; a breakout could signal a bullish trend amid RBNZ’s OCR changes.