Japanese Finance Minister Katsunobu Kato said he will seek another meeting with US Treasury Secretary Janet Yellen next week to discuss currency issues and build on last month’s dialogue.
“We confirm that exchange rates should be determined by the market, and excessive volatility may harm economic and financial stability,” Kato said at a press conference after the cabinet meeting on Friday, referring to his bilateral meeting with the US Treasury Secretary in Washington in April. “If circumstances permit, I hope to have the opportunity to communicate with Mnuchin again next week to discuss these issues,” Kato added.
Kato plans to attend the G7 finance ministers’ meeting to be held in Canada next week and intends to have further discussions with Bessenyei at the meeting.
Before Kato made the above remarks, it was reported that the United States and South Korea had discussed currency issues during trade talks earlier this month. This news prompted the South Korean won and the Japanese yen, among other Asian currencies, to rise by more than 1%.
It was reported that South Korea’s Deputy Finance Minister Choi Ji-yeong met with Robert Kappross, the current Assistant Secretary for International Finance at the US Treasury Department, in Milan on May 5th to discuss foreign exchange policy issues and plan to continue the dialogue. Investors interpreted this meeting as further evidence that the Trump administration supports a weaker dollar and that foreign governments may tolerate a stronger currency to facilitate trade agreements with the United States.
In the ongoing US trade negotiations, monetary policy remains a focus of market attention. A person familiar with the matter said that US officials involved in the global trade talks have not sought currency commitments in the agreement.
Kato declined to comment on the discussions between Washington and Seoul, merely stating that the market’s reaction reflected its interpretation of the news.
It is reported that once the G7 meeting concludes, Japan’s chief negotiator, Ryohei Akazawa, is expected to return to the United States later this month to participate in the third round of trade negotiations.
As of Friday morning Tokyo time, the yen was trading at around 145 against the US dollar, having given up its overnight gains after Japan’s first-quarter GDP data came in below expectations.
Technical analysis:
Gold: The yellow alert we provided yesterday was in the range of 3130-40, indicating that once the price broke below this area, we should instead focus on the rebounding long signals after the liquidity has been swept. Subsequently, the price rebounded all the way above 3260, rising by more than 120 dollars. For today, we suggest paying attention to the key Fibonacci retracement levels of the entire overnight trading range and wait for a stable long signal to make a move. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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The Nasdaq: The Nasdaq index hit a new high above 21,500 overnight, but the end of the trading session showed a converging trend. Within this converging range, caution is advised. It is advisable to wait for a breakout and then follow the trend. As positive factors have been concentratedly realized in the past week, short-term adjustments should be guarded against. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: The green area that was originally highlighted in the plugin is still quite crucial. Although the price was briefly broken through during the trading session due to the news from Trump about “a potential quick deal with Iran”, it has largely recovered in the offshore market. For today, we need to wait for the bulls to continue their push before considering a buy attempt. We will not take the first momentum break. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Today’s key economic data and events to focus on:
17:00 Eurozone March seasonally adjusted trade balance
20:30 New U.S. Housing Starts for April
22:00 Initial reading of the University of Michigan’s Consumer Sentiment Index for May in the US
23:00 The chief economist of the European Central Bank, Lane, will deliver a speech.
23:00 Deputy Governor of the Bank of England, Lombardelli, will deliver a speech.
