THAILAND: Broad Based Weakness In Thai CPI Inflation

The Asia-Pac USD/JPY range has been 144.23 - 144.99, Asia is currently trading around 144.95, +0.35% having found decent demand back towards the 144.20 area in our session. Price is now back in the middle of the wider 142.00 - 148.00 range and the pair will probably continue to take its cue from the US rates market which opened again this morning after the long weekend.

• MNI Brief: Japan’s May Negative Real Wage Widens. Japan’s inflation-adjusted real wages, a key gauge of household purchasing power, remained negative for the fifth straight month in May, falling 2.9% y/y following April’s 2.0% decline, preliminary data from the Ministry of /health, Labour and Welfare showed Monday. The drop marks the steepest decline since September 2023, when real wages also fell 2.9%.
• Bloomberg - “Japanese Prime Minister Shigeru Ishiba said the country is prepared for all possible tariff scenarios, speaking on Fuji TV’s “Sunday News The Prime” program. Japan is ready to “stand firm” and defend its interests while anticipating every possible situation, says Ishiba.”
• “We will be pushing for zero tariffs on automobiles," Ishiba adds. He notes that Japan is the largest investor in the US and the biggest job creator there.”
• "AOKI: JAPAN, US CONTINUING ACTIVE TARIFF DISCUSSIONS”- BBG
• The rejection of 148.00 points to a potential top being in place now and shows just how quick the market is to return to selling USD’s. USD/JPY was looking for a fresh catalyst to probe the lower end of its range again but NFP did not provide that so we are now back in the middle of the range. The JPY bulls will be hoping the move higher in US yields is capped as a break higher in rates would begin to make a long JPY market vulnerable with its preference to express a short.
• Options : Close significant option expiries for NY cut, based on DTCC data: 143.85($550m).Upcoming Close Strikes : 144.50($840m July9), 142.75(AUD$855m July8).

Fig 1 : USD/JPY Spot Hourly Chart

Source: MNI - Market News/Bloomberg Finance L.P

• Gold edged lower in the Asia trading day ahead of a week that could be dominated by tariff headlines.  
• As the July 9 deadline for US tariffs draws nearer, some of the major equity bourses fell as did gold.  
• Gold had opened at US$3,337.16 at this morning's open and by early afternoon was down -0.90% at $3,307.38.  
• With the US Treasury Secretary Scott Bessent indicating that there could possibly be extensions due ongoing negations, it seems likely that risk appetite for many asset classes could remain muted this week.  

• The move lower sees gold edge towards the 50-day EMA of $3,298.28.

  

source: Bloomberg Finance LP / MNI 

The AUD/USD had a range Friday night of 0.6507- 0.6565, Asia is trading around 0.6510. The AUD/USD drifted off the 0.6600 area once again as stocks pared back some of its recent gains as the market eyes the tariff deadline approaching this week. Look for more consolidation again in the AUD/USD as the pair continues to try build a base from which to move higher. The risk to this is clearly around President Trump escalating trade tensions this week, which could make it a choppy week. First support is towards 0.6500 then more importantly the 0.6350/0.6400 area.

• (Bloomberg) -- “Australia’s May spending data presents a conundrum — are consumers struggling, or thriving? Weak retail trade data on Wednesday suggests consumers, plagued by uncertainty, are keeping their wallets shut. Stronger-than-expected broader spending data on Friday shows a weather-related pickup in winter clothes shopping was complemented by a discretionary surge in car sales and hospitality spending.”
• The AUD/USD is attempting to break through the top of its recent range as the pressure on the USD increases. The move higher does seem to be stalling though as the market eyes the tariff deadline. First support is towards 0.6500 then more importantly the 0.6350/0.6400 area.
• The AUD needs a sustained break above 0.6600 to potentially start building momentum for an extended move higher, a close back above 0.6600 and the focus would turn back to 0.6900/0.7000.
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6600(AUD884m), 0.6500(AUD 510m), 0.6700(AUD 652m). Upcoming Close Strikes : 0.6650(AUD857m July 10), 0.6375(AUD722m July 8)

Fig 1: AUD/USD spot Hourly Chart

Source: MNI - Market News/Bloomberg Finance L.P