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 up
This article was written by Eamonn Sheridan at www.forexlive.com. Read More Details
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