Local data today showed that South Korean consumer inflation slowed to 10-month low. The inflation rate dropped more than expected in May setting up a potential August rate cut.

Australian data followed not too long after, some ‘partial’ inputs to the Q1 GDP figures that are due tomorrow. These were mainly disappointing and point to the possibility that the 0.2% q/q economic growth result expected will come in even slower. There is not a lot of fat available here and the chance of a contraction cannot be ruled out. AUD/USD fell after the data after earlier extending its overnight gain to nudge 0.6700 (but not quite get there).

EUR, GBP and CAD all continued to add to their Monday moves, but soon all gave way to small retracements (very small).

USD/JPY tracked its own path, of course, falling to just under 156.00 before recovering 50 points or so (highs were just shy of 156.50). We had remarks from finance minister Suzuki, discussing intervention. Suzuki said the late April/early May intervention curbed speculative behaviour somewhat. A warning on the weak yen came from Japan’s government in a draft seen of its long-term ‘roadmap’, which is a yearly report highlighting key administration policy priorities. The final version is expected around June 21. Bank of Japan Governor Ueda spoke, answering questions in parliament (see bullets above).

usdyen wrap 04 June 2024 2