- Heads up – Bank of England Governor Andrew Bailey is speaking over the weekend
- US reopens jet engine exports to China in sign of thawing trade ties
- BOE Monetary Policy Committee member Taylor is speaking on interest rates on Friday
- Goldman Sachs has revised down its US Treasury yield forecasts
- ICYMI:China plans National Childbirth subsidy amid population decline.
- Australian Household Spending May 2025 +4.2% y/y (expected +3.5%), +0.9% m/m (exp +0.5%)
- PBOC sets USD/ CNY reference rate for today at 7.1535 (vs. estimate at 7.1688)
- Trump says willing to let migrants stay who are vouched for by the farmers they work for
- India bars Jane Street from accessing its securities market- Bloomberg News
- Reuters poll: 31 of 37 economists expect cut to RBA cash rate by 25bp next week
- Yen adding on a few points after the spectacular beat for Japan household spending data
- Japan data – May household spending +4.7% y/y (expected +1.2%, prior -0.1%)
- China’s Wang Yi downplays EU concerns over rare earth export controls
- Barclays has raised its Brent crude oil forecast to US$72/bbl for 2025
- US Congress: House declares July 14 week “crypto week”, to advance key digital asset bills
- Reminder – not all US markets are closed for the holiday (Globex open limited hours)
- Hong Kong central bank intervening to support the HK dollar, buying HKD
- Trump says will begin sending letters on trade tariffs starting Friday
- Forexlive Americas FX news wrap: Non-farm payrolls beat the consensus
- Poll: Analysts expect the Reserve Bank of New Zealand to hold rates at 3.25% on July 9
- Trade ideas thread – Friday, 4 July, insightful charts, technical analysis, ideas
Japan’s household spending surged 4.7% y/y in May, a sharp upside surprise versus the expected 1.2% gain and a strong rebound from April’s -0.1%. While the data is dated, it remains a key input for the Bank of Japan as it weighs the strength of private consumption — which accounts for more than half of Japan’s GDP.
Consumption and wage trends are closely watched by the BoJ. Japanese firms have agreed to raise wages by 5.25% this year, but real wage growth remains under pressure from elevated living costs. The BoJ is also monitoring the global outlook, including the potential fallout from Trump’s renewed tariff push. While markets currently expect the next BoJ rate hike in 2026, more data like today’s could bring that timeline forward.
The yen gained modestly following the release, though USD/JPY remains well above pre-NFP levels.
In the U.S., Trump spoke in Iowa late Thursday, signalling a potential shift on immigration. He said he’d be open to allowing migrants to stay if they’re vouched for by the farmers they work for — a notable softening that could ease labour shortages in agriculture.
Trump also said he’ll begin issuing tariff notification letters starting Friday, outlining the specific rates. He noted the letter-based approach would be simpler than negotiating formal trade deals.
Otherwise, it was a quiet session. Markets were subdued ahead of the U.S. holiday, and major FX pairs mostly stuck to narrow ranges.
USD/JPY update:
This article was written by Eamonn Sheridan at www.forexlive.com.