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A pretty quiet day for Asian session traders, though the lack of economic releases didn’t stop some bulls and bears from pricing in fresh seven-year highs for U.S. Treasury yields.

Meanwhile, a comment from a U.S. official inspired NAFTA-related uncertainties at the same time when China is showing signs of giving Trump and his team an inch trade-wise.

  • Japan’s national core CPI (y/y) increases by 0.7% vs. 0.8% expected, 0.9% previous
  • China drops anti-dumping probe of U.S. sorghum
  • U.S. 10-year Treasury yields hits seven-year high of 3.128% in early Asian session

Major Events/Reports:

Japan’s inflation miss

It’s still a long way to go for the Bank of Japan (BOJ!) Data printed earlier reflected that core prices in the world’s third largest economy only grew by 0.7% from a year earlier in April. That’s quite a distance from the BOJ’s 2.0% target!

The core-core CPI, an index closely-watched by the BOJ, came in at 0.4% after showing 0.5% in March.

As it turned out, mass-market retailers are still reluctant to raise prices despite rising labor costs.

Overall, the report suggested that BOJ Governor Kuroda and his team won’t be letting go of their easy monetary policies anytime soon.

Trade updates

The Asian session was light on economic releases, but traders had a lot of trade-related news updates to chew on.

For starters, U.S. Trade Representative Robert Lighthizer shared that there are “gaping differences” to what the participating countries want on issues like labor, energy, and intellectual property, and that “The NAFTA countries are nowhere near close to a deal.” Yikes!

Meanwhile, China has tabled its anti-dumping investigation of U.S. sorghum. The move was seen as a promising one ahead of Chinese officials meeting their counterparts in Washington later this week.

Mixed risk sentiment

The Asian bourses celebrated the rays of light regarding the U.S.-China trade negotiations as well as optimism over positive updates that support a more hawkish Fed decision next month.

  • Nikkei is up by 0.40% to 22,929.7
  • Australia’s A SX 200 is down by 0.42% to 6,093.6
  • Hang Seng is up by 0.17% to 30,995.7
  • Shanghai index is up by 0.28% to 3,162.874

Gold prices ended up reflecting stronger demand for the Greenback while crude oil steadied on the back of OPEC’s cuts, expectations of economic sanctions in Iran, and deeper-than-expected pullback in inventories reports printed this week.

  • Gold is down by 0.16% to $1,288.58
  • Brent crude oil is down by 0.01% to $79.53
  • U.S. WTI is up by 0.08% to $71.61.

Major Market Mover(s):

CAD
The Loonie managed to gain pips despite Lighthizer’s hints that NAFTA negotiations aren’t going as well as we thought they are.

USD/CAD is up by 19 pips (0.15%) to 1.2823
CAD/JPY is up by 5 pips (+0.06%) to 86.51
EUR/CAD is up by 34 pips (+0.23%) to 1.5236
AUD/CAD is up by 17 pips (+0.17%) to .9633

NZD
The dollar may have gained a couple more pips and the yen weighed by a weak CPI reading, but it was the high-yielding Kiwi that had a more consistent price action.

NZD/USD is up by 11 pips (+0.16%) to .6887
NZD/JPY is up by 26 pips (+0.33%) to 76.41
GBP/NZD is down by 33 pips (+0.17%) to 1.9614
NZD/CAD is up by 26 pips (+0.30%) to .8832

Watch Out For:

  • 6:00 am GMT: Germany’s PPI (0.3% expected, 0.1% previous)
  • 6:00 am GMT: Germany’s wholesale price index (0.2% expected, 0.0% previous)
  • 7:00 am GMT: FOMC member Loretta Mester to give a speech in Frankfurt
  • 9:00 am GMT: Euro Zone’s current account (35.1B EUR expected and previous)
  • 9:00 am GMT: Euro Zone trade surplus to slip from 21.0B to 20.7B EUR?