Aurelia Butler

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TOKYO (Reuters) – Japan will release closely watched data on Friday that shows how much it spent intervening in the foreign exchange market to prop up the yen in May, in moves that kept the currency from testing new lows but are unlikely to reverse longer-term declines.Tokyo is suspected to have spent around a combined 9 trillion yen ($57.11 billion) on April 29 and May 2 to arrest the yen’s sharp fall to a 34-year low of 160 to the dollar, according to private-sector estimates.Authorities have been tight-lipped on whether they forayed into the market in “stealth intervention,” keeping markets focused on Friday’s data on the amount it spent on intervention from April 26 to May 29.The monthly data only shows the total amount Japan spent on currency intervention during the period. A more detailed daily breakdown of intervention will only be seen in data for the April-June quarter, likely to be released in early August.After hitting a 34-year low of 160.245 yen on April 29, the yen bounced back on suspected intervention but has languished near the 160-threshold, widely seen as authorities’ line in the sand for currency intervention.Now, market attention is shifting to whether and how soon Japan might step into the market again.Much of that depends on the strength of the U.S. economy and Federal Reserve’s rate cut path, while the Bank of Japan (BOJ) is expected to take its time in raising interest rates this year.Last week, Japan renewed its push to counter excessive yen falls during a weekend gathering of Group of Seven (G7) financial leaders, which was helped by the group again warning against excess currency volatility.”Given that there was no opposition from other countries, Japan will likely continue efforts to curb excessive yen falls through intervention,” said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.However, U.S. Treasury Secretary Janet Yellen said last week intervention should be restricted to “exceptional” cases, underscoring her “belief” in the market-set exchange rates.Meanwhile, Japan’s top currency diplomat Masato Kanda issued a fresh warning on the chance of renewed intervention, saying Japan stands ready to take action in the market “any time” to counter excessive yen moves.Having engaged in the past yen-selling intervention more than two decades ago, Kanda, now the vice finance minister for international affairs, once again led yen-buying operations in 2022 spending about 9.2 trillion yen over three days.Although Japan has had only limited success in arresting sharp yen swings, there’s a good chance it could act again even if the currency does not break beyond the 160-to-the-dollar mark, said Masafumi Yamamoto, chief FX strategist at Mizuho Securities.”Japan must have won backing from G7 including the U.S. to intervene in the currency market again,” he said. “If the yen makes sharp single-day moves from the current level to say, 158 yen or beyond, it might take action again.”The dollar was trading at 156.850 yen on Friday, not far from the 160-yen threshold.($1 = 157.6000 yen) More

TOKYO (Reuters) – The dollar was licking wounds against peer currencies on Friday after a downward revision to U.S. GDP for the first quarter suggested room for rate cuts this year, while investors braced for inflation data. Official data showed overnight that the U.S. economy grew at an 1.3% annualised rate from January through March, down from the advance estimate of 1.6% after downward revisions to consumer spending. Meanwhile, New York Fed President John Williams on Thursday said he feels there is ample evidence that monetary policy is helping to bring inflation down.U.S Treasury yields, which had boosted the greenback to its highest since May 14 at 105.17 on Thursday as they marched to multi-week peaks, slipped on the revised GDP data. [US/]The dollar index, which measures the currency against six major peers, last consolidated around 104.76 after dipping as low as 104.63 overnight.The data revisions and comments by Williams have revived hopes for a cut sooner rather than later, with traders looking past higher PCE prices in the revised data to focus on lower consumption and growth, said Matt Simpson, senior market analyst at City Index. Markets currently priced in a 55% chance of rate cuts to begin in September, up from 51% a day before, according to the CME Group’s (NASDAQ:CME) FedWatch Tool. The market now prepared for the release of the Fed’s preferred measure of inflation, the Personal Consumption Expenditures (PCE) price index, for further indications on how the central bank might proceed with interest rate cuts later this year.Softer U.S. consumer price inflation data earlier in May rekindled rate cut expectations for this year, weakening the dollar across the board and setting it on track to post its first monthly losses in 2024.But expectations for interest rate reductions this year have wobbled amid signs of sticky inflation, most recently with a surprise uptick in consumer sentiment in data on Tuesday.”It’s all down to today’s PCE inflation report now as to where markets head next… I still think there may be an upside surprise in the PCE report that could quickly reverse Thursday’s moves,” said City Index’s Simpson.Against the dollar, the yen was little changed even after data showed Tokyo core consumer prices, a leading indicator of nationwide figures, accelerated from the previous month to keep alive market expectations the central bank will raise interest rates this year.”May’s rebound in inflation in Tokyo largely reflects a jump in electricity inflation that has further to run, but underlying inflation will continue to moderate,” Marcel Thieliant, Head of Asia-Pacific at Capital Economics, wrote in a note.”All told, the Tokyo CPI leaves us confident that nationwide underlying inflation will fall below 2% as soon as July.”After weakening briefly, the Japanese currency held around 156.77 per greenback, remaining off Wednesday’s four-week low of 157.715 per dollar.The yen has steadily marched closer toward the 34-year trough of 160.245 from a month ago, a level which market players suspect triggered two rounds of dollar-selling intervention by Tokyo.Elsewhere, the euro was flat at $1.083225 after touching a two-week low of $1.07885 overnight. Price data for the euro zone is due on Friday, following a stronger-than-expected April inflation reading for Germany on Wednesday.Sterling was unchanged at $1.2734 after reaching $1.2801 on Tuesday for the first time since March 21.In cryptocurrencies, bitcoin last fell 0.21% to $68,327.00. More

TOKYO (Reuters) – Core consumer inflation in Japan’s capital accelerated in May on rising electricity bills but price growth excluding the effect of fuel eased, data showed on Friday, heightening uncertainty on the timing of the central bank’s next interest rate hike.Separate data showed factory output unexpectedly fell in April, underscoring the fragile state of Japan’s economic recovery and dashing policymakers’ hope that strong corporate activity will offset the weakness in household spending.The core consumer price index (CPI) in Tokyo, a leading indicator of nationwide figures, rose 1.9% in May from a year earlier, matching a median market forecast and accelerating from a 1.6% increase in April.But the uptick was driven mostly by rising electricity bills, which could hurt already weak consumption and heighten uncertainty about the outlook for Japan’s economy.A separate index that excludes the effect of both fresh food and fuel costs, closely watched by the Bank of Japan (BOJ) as a broader price trend indicator, rose 1.7% in May from a year earlier, slowing from the previous month’s 1.8% gain.Private-sector service inflation also slowed to 1.4% in May from 1.6% in the previous month, casting doubt on the BOJ’s view that prospects of rising wages will prod more companies to charge extra for their services.Adding to uncertainty over the outlook, factory output fell 0.1% in April from the previous month, confounding market expectations for a 0.9% increase, government data showed.Manufacturers surveyed by the government expect output to rise 6.9% in May before falling 5.6% in June, the data showed.Japan’s economy shrank an annualised 2.0% in the first quarter as companies and households reduced spending, casting doubt on the central bank’s view of a moderate recovery.While analysts expect growth to rebound in the current quarter, a weak yen is weighing on household sentiment by pushing up the cost of imports for fuel and food.The BOJ ended eight years of negative interest rates and other remnants of its radical monetary stimulus in March as it judged that sustained achievement of its 2% inflation target has come into sight.BOJ Governor Kazuo Ueda has said the central bank will raise interest rates from current near-zero levels if underlying inflation, which takes into account CPI and broader price gauges, accelerates toward 2% as it currently projects.The central bank expects rising wages to push up service inflation and keep inflation durably around 2%, a condition it set as a prerequisite to further phase out monetary stimulus. More

“I think there’s good reasons to think that we’re headed to 2% – we’re still on that path, perhaps a bit slower and a little bit bumpier than maybe many thought at the beginning of the year,” Logan said at an event in El Paso, Texas.”But there’s a lot of uncertainty about that path. And I can imagine other paths that we need to be prepared for. And I continue to be concerned with upside risks around inflation.”Fed policymakers meet in about two weeks and are expected to keep the policy rate in its current 5.25%-5.5% range. Many analysts also expect Fed officials to project fewer rate cuts this year than the three estimated a couple of months ago. “It’s really important that we don’t lock into any particular path for monetary policy,” Logan said. “I think it’s too soon to really be thinking about rate cuts. And I think it’s really important that we keep all options on the table and that we continue to be flexible so that we can watch the data as it as it comes in and we can watch how financial conditions evolve and respond to the totality of the data.” More

(Reuters) -Skydance Media has submitted a sweetened offer for its proposed merger with Paramount Global, according to a person familiar with the matter, the latest twist in a tumultuous negotiation process.The new deal is said to offer improved terms for both voting and non-voting Paramount shareholders, and provides more cash, according to the source, who spoke on condition of anonymity.Specific details of the offer from the independent studio led by David Ellison, son of Oracle (NYSE:ORCL) co-founder Larry Ellison, could not immediately be determined.A spokesperson for a special committee of the Paramount board, which was created to evaluate such offers, declined to comment.The Wall Street Journal first reported the improved offer, which comes at a fraught moment for Paramount, home to the storied Paramount Pictures studio, the CBS broadcast network and cable networks such as Nickelodeon and MTV. Paramount CEO Bob Bakish stepped down last month in the middle of deal talks amid growing tensions with the company’s controlling shareholder, Shari Redstone. Four board members will depart after the company’s annual meeting on June 4.Meanwhile, a rival bidder, Sony (NYSE:SONY) Pictures Entertainment, in partnership with Apollo Global Management (NYSE:APO), emerged late in the deal process, submitting a non-binding all-cash offer of $26 billion. It has since backed away from that initial proposal in favor of a more limited approach, according to a second source familiar with the matter. Skydance has spent months in negotiations with Paramount.David Ellison and his deal partners RedBird Capital and KKR initially proposed a two-step transaction in which they would pay roughly $2 billion to acquire the Redstone family’s holding company, National Amusements, which owns about 77% of Paramount’s class-A voting stock.Paramount would then acquire Skydance in an all-stock transaction worth about $5 billion. Some major investors balked at that deal, which was perceived as favoring Redstone.Skydance subsequently offered a $3 billion deal sweetener including a mix of share buybacks and cash that could be used to pay down debt. More