ForexLive Asia-Pacific FX news wrap: Japan core CPI rising fastest in two years

• Japan PM Ishiba: No change to our stance on U.S. tariffs
• Japan Prime Minister Ishiba held phone talks with Trump
• China Council for Promotion of International Trade president met with JP Morgan CEO Dimon
• Iran’s Foreign Minister lays down conditions for a deal with the US ahead of weekend talks
• S&P 500 Futures Analysis Today
• TSMC warns US chip tariffs could undermine its Arizona investment
• Chinese Vice Foreign Minister Ma Zhaoxu & US Deputy Sec State Landau spoke Thursday
• The USD is losing some ground in Asian trade
• PBOC sets USD/ CNY reference rate for today at 7.1919 (vs. estimate at 7.2151)
• Japan Akazawa: Japan to request elimination of US tariffs, but want to reach agreement
• Major US banks are exploring whether to team up to issue a joint stablecoin
• Japan’s new farm minister aims to cut 5kg rice prices below ¥3,000
• Japan economy minister Akazawa heading back to the US around May 30 for more trade talks
• Federal Reserve Chair Powell is speaking on Sunday
• US economy to worsen in H2 2025 … ‘payback’ time
• Japan April CPI remains well above the Bank of Japan target rate
• UK consumer confidence improves a little in May, still deeply pessimistic at -20
• US Deputy Secretary of State spoke with Chinese counterpart on Thursday
• New Zealand Retail Sales Q1 2025 0.7% y/y (prior 0.2%), 0.8% q/q (expected 0.1%)
• UBS lifts S&P 500 target on strong earnings and economic outlook
• ECB’s Lagarde says must question links of dependency that we have with the United States
• JP Morgan highlights signs of recovery and renewed foreign interest in China
• ICYMI – Morgan Stanley expects the S&P 500 to reach 6,500 by mid-2026
• US Supreme Court allows Trump to fire heads of independent agencies, does not apply to Fed
• Trade ideas thread – Friday, 23 May, insightful charts, technical analysis, ideas
• Japan Kato: There were comments from some G7 countries about need to ensure fiscal health
• BoJ Governor Ueda says shared with G7 that should be highly committed to price stability
• Stocks close mixed with the Dow and S&P little changed. Nasdaq higher.
• Reserve Bank of New Zealand expected to cut its cash rate on May 28, almost unanimous view
• Forexlive Americas FX news wrap: Yields reverse lower, bitcoin hits record near $112K

The US dollar lost ground across the major FX board during the session. Concerns over US debt persist following the Moody’s downgrade, and while the House’s passage of Trump’s tax bill on Thursday may offer a short-term economic boost, it has reignited worries about the long-term consequences of ballooning debt.

From Canada, where the G7 is finishing, we heard again from Bank of Japan Governor Ueda. He reaffirmed the Bank’s hands-off stance on Japanese Government Bonds, even as yields on super-long dated securities climb to record highs. His comments align with those of BoJ Board member Noguchi, who said the Bank should only ramp up bond purchases during “severe market disruption.”

Japan’s April inflation data came in later, with core consumer prices rising 3.5% year-on-year—the fastest pace in over two years. This puts pressure on the BoJ to consider rate hikes, though Trump’s tariff war is posing new headwinds to growth.

On trade, Economy Minister Akazawa is due back in Washington around May 30 for a fourth round of talks. Both he and Prime Minister Ishiba reiterated Japan’s demand for US tariff removal, while also emphasising Japan’s national interests. Akazawa expressed a desire to reach an agreement—but it won’t be easy.

Looking to the weekend, indirect nuclear talks between Iran and the US are set to resume in Rome. Iran’s Foreign Minister laid out stark terms:

• “Zero nuclear weapons = we DO have a deal. Zero enrichment = we do NOT have a deal.”

Expect headlines early Monday in Asian markets, with oil likely to react.

Also on deck is a speech from Fed Chair Jerome Powell on Sunday. While he’s unlikely to address the economic outlook or policy directly (see earlier post for context), it’s worth noting he’ll be speaking.

Lastly, US debt concerns continue to ripple globally. Bangko Sentral ng Pilipinas Governor Eli Remolona is reportedly considering reducing Philippine holdings of US Treasuries, according to Bloomberg, following the Moody’s downgrade. If he’s thinking it, others likely are too.

EUR/USD rose during the session: