Japan's Finance Minister Katayama warns of decisive FX action coordinated with the U.S. as crude oil volatility drives yen weakness, with the BOJ rate decision due later in the session. BOJ expected to hold rates steady as Iran conflict complicates tightening pathSummaryFinance Minister Katayama said crude oil volatility is feeding into FX markets and affecting the broader economy, warning authorities are ready to take decisive action against speculative activityShe confirmed close coordination with the United States, citing an agreement with Washington to act jointly if necessary and said Japan is in constant contact with the U.S. without interruptionThe yen is hovering near 160 per dollar, a psychologically significant level that has previously triggered Japanese currency interventionKatayama said FX volatility is directly affecting household livelihoods, reinforcing the government's sensitivity to yen weakness and its inflationary impact on energy and food import costsShe confirmed discussions with U.S. Treasury Secretary Bessent and said the matter has been communicated to G7 counterparts, while drawing a clear line between government FX policy and BOJ monetary decisionsJapan is reported to be evaluating unconventional options, including using its foreign exchange reserves to take short positions in crude oil futures to drive down energy prices and relieve yen pressure indirectly. Seems far-fetched that.Katayama described the economy as recovering modestly with wage hike momentum continuing, but said caution over the outlook is warrantedNote: the Bank of Japan's Monetary Policy Committee is delivering its rate decision later today, with the policy rate widely expected to be held at 0.75%. Governor Ueda's press conference will be closely watched for guidance on the future tightening path given the Iran war's inflationary impact and the yen's ongoing weaknessJapanese Finance Minister Satsuki Katayama has issued another warning to currency markets, saying Tokyo stands ready to take decisive action against speculative yen positions in close coordination with the United States, as the Iran war-driven surge in crude oil prices continues to weigh heavily on Japan's currency and amplify domestic inflation.Speaking at a regular press conference, Katayama said authorities had observed rising speculative activity in currency markets linked directly to volatility in oil prices, and confirmed that Japan has a standing agreement with Washington that would allow joint action to be taken. She said Tokyo has been in constant contact with U.S. counterparts without interruption, including over holiday periods, a formulation designed to signal round-the-clock readiness rather than a reactive posture.The yen has been trading close to 160 per dollar, a level with deep significance for Japanese authorities. It was at similar levels that the Ministry of Finance previously authorised direct market intervention, and the proximity to that threshold gives Katayama's language practical as well as rhetorical weight. She has also confirmed discussions with U.S. Treasury Secretary Bessent and said Japan's concerns have been communicated to G7 partners, internationalising what might otherwise be read as a domestic currency management issue.The mechanism by which crude prices punish the yen is well understood in Tokyo. Japan imports the overwhelming majority of its energy needs, meaning higher oil prices push up the country's import bill, widen the trade deficit and increase demand for dollars, all of which put downward pressure on the yen. That depreciation then feeds back into higher import costs for energy and food, compounding inflationary pressure on households. Katayama stressed that FX volatility is affecting livelihoods directly, a framing that signals political as well as economic urgency.Reports suggest Tokyo is also exploring more unconventional options. Japan is said to be evaluating the use of its substantial foreign exchange reserves to take short positions directly in crude oil futures, aiming to suppress energy prices and relieve yen pressure through the back door rather than intervening in FX markets outright. The idea has attracted internal scepticism, with some officials questioning whether a single country can move a market as large and liquid as global crude, and the financial exposure of a large short position in a volatile market carries its own risks. But the fact that the option is being discussed at all reflects the scale of the challenge Tokyo faces.On the broader economy, Katayama offered a measured assessment, describing Japan as recovering modestly with momentum for wage increases still intact. She was careful to add that caution over the outlook is warranted, a hedge that reflects how quickly the external environment can deteriorate given the unresolved Iran conflict.The session carries added significance because the Bank of Japan is delivering its rate decision later today, with the policy rate widely expected to be held at 0.75%. Governor Kazuo Ueda's press conference will be closely watched for any shift in language around the tightening path, particularly given that yen weakness and import-driven inflation pull in a different direction to the growth caution that has kept the BOJ on hold. The convergence of fiscal intervention signals from Katayama and monetary policy guidance from Ueda makes this one of the more consequential sessions for Japanese markets in recent weeks.---The remarks carry classic verbal intervention characteristics: a warning calibrated to give pause to momentum traders without committing to immediate action. The yen's proximity to the 160-per-dollar threshold, a level that triggered intervention in the past, makes the threat credible enough to command attention. The explicit reference to U.S. coordination is the most market-significant element, raising the prospect of a joint Japan-U.S. FX operation. Japan's Finance Minister Katayama warns of decisive FX action coordinated with the U.S. as crude oil volatility drives yen weakness, with the BOJ rate decision due later in the session. Japan's heavy reliance on oil imports means crude price volatility feeds directly into yen weakness and import-cost inflation, creating a compounding pressure loop that traditional monetary tools struggle to address. Whether Katayama's words are followed by action will depend on how far the yen slides and how long crude prices remain elevated. With the Bank of Japan decision and Ueda's press conference due later in the session, the yen is exposed to volatility from both fiscal and monetary directions simultaneously. This article was written by Eamonn Sheridan at investinglive.com.

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader international FX conditions, and domestic economic considerations such as capital flows, growth momentum and financial stability objectives. The midpoint is not a purely mechanical calculation, allowing policymakers discretion to guide market expectations. Once the midpoint is announced, onshore USD/CNY is free to trade within the allowable band. If market pressures push the yuan toward either edge of that range, the central bank may step in to smooth volatility. Intervention can take the form of direct buying or selling of yuan, adjustments to liquidity conditions, or guidance through state-owned banks. As a result, the daily fixing is often interpreted as a policy signal rather than just a technical reference point. A stronger-than-expected CNY midpoint is typically read as a sign the PBOC is leaning against depreciation pressure, while a weaker fixing for the CNY can indicate tolerance for a softer currency, often in response to dollar strength or domestic economic headwinds.In periods of heightened global volatility, such as shifts in US rate expectations, trade tensions or capital flow pressures, the fixing takes on added significance. For investors, it provides insight into Beijing’s currency priorities, balancing competitiveness, capital stability and financial market confidence. This article was written by Eamonn Sheridan at investinglive.com.

UK shop price inflation eased to 1.0% in April from 1.2% in March as Easter discounts helped retailers stimulate spending, though the BRC warned Middle East cost pressures are fast approaching. SummaryThe British Retail Consortium said UK shop prices rose 1.0% year on year in April, down from 1.2% in March, as Easter promotions on chocolate, home renovation materials and clothing eased the monthly readingFood price inflation slowed to 3.1% from 3.4%, with retailers competing harder on price amid weakening consumer confidenceSeparate CBI data published Monday showed retailers reported the biggest fall in sales volumes in more than 40 yearsThe BRC's measure covers a narrower basket than official UK CPI, which stood at 3.3% in March; the IMF forecasts British inflation will reach 4% this yearBRC chief executive Helen Dickinson warned the full force of the Middle East conflict has yet to feed into consumer prices but said it would not be long before it doesNIQ analyst Mike Watkins cautioned that accelerating inflation is likely to weigh further on already fragile consumer spendingNote: the Bank of England's Monetary Policy Committee is meeting this week to set interest rates. Most economists expect rates to be held for now, with the MPC monitoring the extent to which businesses are passing on higher costs. Governor Andrew Bailey said this month that businesses he had spoken to reported a lack of pricing power, offering some reassurance that inflation would not surge as it did in 2022 when it topped 11%UK shop price inflation eased slightly in April as Easter promotions across chocolate, home renovation products and clothing gave retailers a tool to stimulate spring spending, according to the British Retail Consortium's monthly survey of major chains. The respite, however, is widely expected to be short-lived.The BRC said prices in April were on average 1.0% higher than a year earlier, down from a 1.2% annual increase in March. Food price inflation also softened, slipping to 3.1% from 3.4%. BRC chief executive Helen Dickinson attributed the improvement in part to competitive pricing by retailers facing a consumer base whose confidence has deteriorated markedly in recent months.The underlying picture is considerably less encouraging. Separate figures published by the Confederation of British Industry on Monday showed that retailers this month reported the steepest fall in sales volumes in more than 40 years, a reading that points to a consumer under serious strain well before the inflationary consequences of the Iran war have fully arrived.The BRC measure covers a narrower basket of goods than Britain's official consumer price index, which registered 3.3% in March. The International Monetary Fund has forecast that UK inflation will reach 4% this year, a projection that assumes ongoing transmission of higher energy and import costs driven by the disruption to Middle East supply routes. Dickinson made the point plainly, saying the full force of the conflict had yet to hit consumer prices but would do so before long.Retailers have so far absorbed much of the cost pressure rather than pass it directly to customers, a strategy driven by the need to protect already fragile demand. NIQ analyst Mike Watkins, whose firm provides data for the BRC survey, warned that accelerating inflation and weak consumer confidence are a damaging combination, and that retailers can only hold the line for so long before price increases become unavoidable.-The data lands at a sensitive moment for UK monetary policy. The Bank of England's Monetary Policy Committee is meeting this week to set interest rates, with most economists expecting rates to be held for now as policymakers weigh the competing pressures of slowing demand and building inflation. Governor Andrew Bailey said this month that businesses he had spoken to reported a lack of pricing power, offering some reassurance that inflation would not accelerate as sharply as it did in 2022, when it peaked above 11%. The MPC will nonetheless be watching closely for any sign that firms are beginning to pass on higher costs, a development that could force its hand regardless of the weakness in underlying demand.---The April BRC data offers a modest positive for UK consumer sentiment but should not be read as a trend. The Easter effect is mechanical and temporary, driven by promotional activity rather than any structural easing of cost pressures. The more telling data point sits alongside it: the CBI's survey showing the biggest fall in retail sales volumes in more than 40 years signals that demand is deteriorating sharply even before the full inflationary impact of the Iran war feeds through. Sterling-denominated import costs and energy prices remain elevated, and the IMF has already pencilled in UK inflation reaching 4% this year. UK shop price inflation eased to 1.0% in April from 1.2% in March as Easter discounts helped retailers stimulate spending, though the BRC warned Middle East cost pressures are fast approaching. The combination of weakening demand and rising costs is a stagflationary signal that gives the Bank of England very little room to manoeuvre. This article was written by Eamonn Sheridan at investinglive.com.

Japan March 2026 jobs data.Unemployment rate 2.7% expected 2.6%, prior 2.6% Job-To-Applicant Ratio 1.18 expected 1.19, prior 1.19Still to come:BOJ expected to hold rates steady as Iran conflict complicates tightening path This article was written by Eamonn Sheridan at investinglive.com.

VP Vance has privately questioned Pentagon briefings on the Iran war and raised concerns about serious U.S. missile shortfalls, with Iran said to retain most of its military capability. SummaryVance has repeatedly questioned the Pentagon's portrayal of the Iran war in closed-door meetings, raising concerns that U.S. missile stockpiles have been more severely depleted than official briefings suggestTwo senior administration officials told The Atlantic that Vance has queried the accuracy of information provided by the Pentagon, and has raised munitions concerns directly with TrumpDefence Secretary Pete Hegseth and Joint Chiefs chairman General Dan Caine have publicly described U.S. stockpiles as robust and Iranian military damage as drasticVance's advisers say he has framed his concerns as his own rather than accusing Hegseth or Caine of misleading the president, in an apparent effort to avoid fracturing the war cabinetInternal intelligence assessments cited by the publication suggest Iran retains two-thirds of its air force, most of its missile-launching capability and the fast-boat fleet capable of disrupting Hormuz trafficThe Centre for Strategic and International Studies said this week the U.S. may have burned through more than half of its pre-war supply of four key munitions systemsThe Pentagon said Hegseth and other leaders consistently provide the president with a complete and unvarnished pictureSource: The AtlanticVice President JD Vance has privately and repeatedly challenged the Pentagon's account of the war with Iran, questioning whether the Defence Department has presented an accurate picture of U.S. missile stockpile depletion and the true state of Iranian military capability, according to a report in The Atlantic citing senior administration officials.The publication, which has been consistently critical of the Trump administration, reports that Vance raised his concerns in closed-door meetings and in direct conversations with the president, framing the issue as a question of strategic accuracy rather than a personal attack on Defence Secretary Pete Hegseth or Joint Chiefs chairman General Dan Caine. Vance's advisers told the publication he was trying to avoid creating divisions within the war cabinet, a dynamic that gives his reported interventions a degree of plausibility even if the sourcing carries its own caveats.Hegseth and Caine have publicly maintained that U.S. weapons stockpiles are robust and that eight weeks of fighting have inflicted drastic damage on Iranian forces. Trump himself declared weeks ago that the damage already constituted victory and that key weapons reserves were virtually unlimited. Some advisers quoted by The Atlantic suggest Hegseth's consistently upbeat public briefings, which take place at 8am when Trump is known to be watching Fox News, are calibrated as much for the president's consumption as for factual completeness.The picture painted by internal intelligence assessments, according to people who spoke to the publication, is considerably less flattering. Iran is said to retain approximately two-thirds of its air force, the bulk of its missile-launching capability and most of the small, fast boats capable of laying mines and harassing shipping through the Strait of Hormuz. In April, Iranian forces shot down an American fighter jet, an incident Hegseth compared publicly to the Resurrection of Jesus Christ, an assessment that did not go unnoticed in Washington.The stockpile question has independent support beyond Atlantic sourcing. The Centre for Strategic and International Studies said this week that the U.S. may have expended more than half of its pre-war reserves across four key munitions categories, including interceptors used to defend against Iranian missiles and offensive systems such as Tomahawk and Joint Air-to-Surface Standoff missiles. Reserves were already under pressure before the Iran war began, drained by years of sluggish manufacturing output and donations to Ukraine and Israel. Pentagon officials had warned even before hostilities commenced that existing deficits jeopardised the military's ability to prevail in a conflict with Russia or China.The consequences of a serious munitions shortfall extend well beyond the Iran theatre. Vance is said to have raised specifically the implications for U.S. capacity to defend Taiwan against China, South Korea against North Korea and European allies against Russia. That framing elevates the stockpile question from a tactical Iran issue to a broader challenge of American deterrence posture.The Pentagon pushed back firmly. Spokesman Sean Parnell said Hegseth and other leaders consistently provide the president with a complete and unvarnished picture. A senior official described Caine as precise, exact and comprehensive in his operational assessments. Vance, for his part, issued a statement praising Hegseth's performance, while the White House said the vice president simply asks probing questions about strategic planning, as all national security team members do.Whether that is the full story, or whether Vance's concerns reflect something more substantive about the gap between the administration's public narrative and the classified picture, is a question the coming days of Iran diplomacy may help to answer.---Bullish for crude if the stockpile picture is as dire as suggested, since a depleted U.S. arsenal materially reduces Washington's ability to sustain or resume large-scale strikes against Iranian infrastructure and Hormuz-related targets. The claim that Iran retains two-thirds of its air force, most of its missile launchers and the fast-boat capacity to disrupt Strait of Hormuz traffic is the most market-relevant detail in the piece, directly challenging the Pentagon's narrative of decisive military progress. If accurate, the path to a durable Hormuz reopening is considerably longer than official briefings have implied. The Atlantic's known editorial disposition toward the current administration warrants some caution around sourcing, but the stockpile concerns are corroborated by independent think-tank analysis and predate this conflict. This article was written by Eamonn Sheridan at investinglive.com.

Trump and his national security team are sceptical of Iran's Hormuz offer, with officials saying he doubts Tehran's good faith and will not drop his demand for an end to nuclear enrichment. (via WSJ, gated).Not so upbeat as this reported earlier by CNN:U.S. and Iran closer to deal than it seems as mediators push for Hormuz agreement firstSummaryTrump and his national security team are sceptical of Iran's offer to open the Strait of Hormuz while deferring nuclear discussions, according to U.S. officialsTrump discussed the proposal with aides on Monday morning, stopping short of an outright rejection but raising concerns that Iran is not negotiating in good faithHis core demand that Iran end nuclear enrichment entirely and commit never to building a nuclear weapon remains the central sticking pointThe White House is expected to offer its response and counterproposals to Iran in the coming daysTrump has threatened to resume bombing Iran if he concludes talks are going nowhere, though there is growing sentiment within the administration that he wants to avoid restarting hostilitiesThe White House declined to confirm or deny the specifics, saying anything not announced by Trump or the White House directly should be treated as speculationSource: Wall Street JournalPresident Donald Trump and his national security team have expressed scepticism over Iran's proposal to reopen the Strait of Hormuz as a first step toward ending the war, with U.S. officials warning that Tehran has yet to demonstrate the good faith required to advance talks and has shown no willingness to meet Washington's central condition.Trump convened discussions with senior aides on Monday morning to consider the Iranian offer, which envisages Hormuz access being restored while nuclear negotiations are set aside for a later stage. He did not reject the proposal outright, but officials familiar with the conversation said he raised serious doubts about whether Iran was genuinely prepared to deal, and made clear that his core demand remains intact: Tehran must end its nuclear enrichment programme entirely and commit to never developing a nuclear weapon.That demand has been Iran's firmest red line throughout the conflict. The Islamic Republic has consistently refused to countenance abandoning enrichment, framing it as a sovereign right. The distance between that position and Trump's stated requirement leaves the two sides facing a fundamental incompatibility that a Hormuz-first framework does not resolve, merely defers.The White House is expected to deliver a formal response and counterproposals to Tehran in the coming days, keeping the negotiating track alive for now. That continuity reflects what officials describe as a growing sentiment within the administration that Trump would prefer to avoid resuming military strikes if a workable path to an agreement can be found. The threat, however, has not been withdrawn. Trump has explicitly warned that he will order bombing to resume if he concludes that talks are proving fruitless, a lever he has shown no reluctance to invoke throughout the conflict.The divergence between this account and the more optimistic picture painted by sources close to the mediation process earlier this week is striking. Where those sources described the two sides as closer than they appeared and mediators as making genuine progress, the Wall Street Journal's account from inside the administration suggests Washington views the Iranian offer with suspicion and has yet to be persuaded that Tehran is negotiating seriously.The White House did not engage with the substance of the report directly. Spokeswoman Anna Kelly said the United States would not negotiate through the press, and that anything not formally announced by Trump or the White House should be considered speculation. The counterproposal expected in the coming days will be the clearest signal yet of whether a deal retains any real prospect of being struck.Tweets count as "formally announced by Trump".-----Bearish for any near-term resolution of the Hormuz disruption and supportive of elevated crude prices. Trump's scepticism over Iranian good faith, combined with his non-negotiable demand that Tehran end enrichment entirely, suggests the gap between the two sides is wider than the CNN-sourced optimism earlier implied. The acknowledgement of a growing administration sentiment against restarting hostilities offers a modest floor, but the explicit threat to resume bombing if talks prove fruitless keeps the upside risk to oil prices firmly in place. Markets will now focus on the White House counterproposal expected in the coming days as the next signal of whether a staged Hormuz-first framework can survive Washington's conditions. This article was written by Eamonn Sheridan at investinglive.com.

Trump is said to harbour doubts about Iran's Hormuz proposal even as the White House signals it will keep negotiations alive, according to the Wall Street Journal.Earlier:U.S. and Iran closer to deal than it seems as mediators push for Hormuz agreement first This article was written by Eamonn Sheridan at investinglive.com.

U.S. and Iran are closer to a deal than they appear, with talks focused on a staged process starting with Hormuz reopening, though mediators warn the next few days are critical. (Via CNN)SummaryThe U.S. and Iran are not as far apart as they seem, according to sources familiar with the mediation process, despite a second round of talks in Pakistan failing to take placeOngoing diplomacy is centred on a staged process in which the first part of any deal would focus on returning to the pre-war status quo and reopening the Strait of Hormuz without restrictions or tollsIran's nuclear programme, cited by both the U.S. and Israel as their casus belli, would be addressed in a later stage of any agreementTrump has previously demanded Iran forfeit its near bomb-grade uranium stockpile and abandon enrichment, conditions Tehran has consistently refusedMediators are pressing both sides hard, with the next few days described as especially crucial to the processThe prospect of the U.S. disengaging and returning to war remains a live risk hanging over the entire negotiationIntense behind-the-scenes diplomacy between the United States and Iran is advancing around a staged peace framework that would prioritise reopening the Strait of Hormuz before tackling the harder question of Tehran's nuclear programme, according to sources familiar with the mediation process.The development comes despite a second round of formal talks in Pakistan failing to materialise, a setback that had led some observers to conclude the negotiating track was stalling. Sources close to the process say the opposite is true, describing the two sides as closer to an agreement than the public picture suggests.The framework under discussion would begin by restoring the pre-war status quo and securing unrestricted passage through the Strait of Hormuz, free of tolls or conditions. That alone would represent a significant development for global energy markets, which have been severely disrupted by the effective closure of one of the world's most critical oil and gas chokepoints since hostilities began.The nuclear question, which both Washington and Tel Aviv cited as justification for military action, would be left for a later stage of any agreement. That sequencing reflects the difficulty of bridging a fundamental gap: Trump has publicly insisted any deal must require Iran to surrender its stockpile of near bomb-grade uranium and abandon its enrichment programme entirely. Tehran has refused both demands and shown no sign of softening its position on either.The decision to defer the nuclear issue rather than resolve it upfront gives the process a path forward in the short term but leaves the most consequential and contentious element unresolved. Any first-stage agreement on Hormuz would therefore be provisional in nature, with the harder work still ahead.Mediators are said to be applying significant pressure on both delegations, with those close to the talks describing the coming days as especially crucial. The pace of back-channel diplomacy has intensified even as the formal negotiating calendar has slipped, suggesting both sides retain enough interest in an outcome to keep the process alive.What remains uncertain is whether that interest will hold. Hanging over the entire negotiation is the possibility that the U.S. decides to disengage and return to active military operations, a scenario that has not been ruled out and that would reshape the energy market outlook dramatically. For now, cautious progress continues, but the margin for error on all sides is thin.---The staged framework described here keeps uncertainty elevated. The confirmation that Hormuz reopening is the priority first step is significant: even a partial or provisional agreement on shipping access could take meaningful risk premium out of crude prices quickly. However, the caveat that the U.S. may yet disengage and return to war is a sharp reminder that this remains a fragile process. The nuclear question being deferred rather than resolved adds a longer tail of geopolitical risk. Net position: cautiously constructive for energy markets if the next few days yield progress, but the downside scenario of renewed hostilities remains live and would be sharply bullish for crude. This article was written by Eamonn Sheridan at investinglive.com.

The BOJ is expected to hold rates at 0.75% as the Iran war clouds its tightening path, with Governor Ueda's press conference the key watch for signals on the next hike.Earlier:Do you know what time the BoJ announcement is? Read on!BOJ expected hold but deliver hawkish signal on June moveBOJ may lean more hawkish - NomuraUSD/JPY firmsBoJ preview: no change expectedPreview: Bank of Japan rate decision knife-edge, Japan inflation runs hotter than expectedSummaryThe BOJ is widely expected to keep its policy rate at 0.75% at the conclusion of its two-day April meeting, with the decision due between 0230 and 0330 GMT. Officials see little need to rush a hike while the economic outlook remains highly fluid due to the Middle East situation, though they remain committed to raising borrowing costs in time, according to Bloomberg sourcesHawkish board member Hajime Takata is expected to again propose raising the rate to 1.0%, though the board is likely to reject the move as it has done at the past two meetings. WTI crude is hovering around $100 per barrel, raising inflation concerns as the oil shock from the U.S.-Iran-Israel conflict deepens. The BOJ is set to cut its fiscal 2026 growth forecast and sharply revise up its inflation outlook in its quarterly report, with rising oil-related costs already prompting some firms to consider price hikes. Governor Ueda holds a press conference at 0630 GMT, with analysts saying he must signal readiness to continue hiking to prevent further yen weakness. The Bank of Japan is widely expected to keep its benchmark interest rate on hold at 0.75% when it concludes its two-day April meeting on Tuesday, as the ongoing U.S.-Israeli war with Iran clouds the economic outlook and complicates one of the most delicate tightening cycles in the central bank's recent history.Officials have signalled in the days prior to the decision that they see little need to rush a rate increase while the situation in the Middle East remains highly fluid, even as their broader commitment to further tightening stays intact. The decision is expected between 0230 and 0330 GMT, with Governor Kazuo Ueda due to hold a press conference at 0630 GMT. of the Strait of Hormuz has driven crude prices sharply higher. WTI is hovering around $100 per barrel, a level feeding through to corporate cost structures and keeping consumer price inflation above the BOJ's 2% target for a fourth consecutive year.That persistent inflation has put the BOJ in an awkward position. While the war-driven oil shock would ordinarily justify a pause in rate hikes, the risk of allowing firms to entrench higher prices into wages and output costs has grown. A stubbornly weak yen, currently near the 160-per-dollar level that has previously triggered currency intervention, is adding to imported inflation and piling pressure on Ueda to signal a firmer tightening bias at his press conference.Hawkish board member Hajime Takata is expected to again propose raising the policy rate to 1.0%, a move that would align with projections markets held earlier in the year. The proposal is likely to be voted down, as it was at the two preceding meetings, reflecting the board's preference for caution given the external environment.The quarterly outlook report due alongside the rate decision is expected to show the BOJ cutting its fiscal 2026 growth forecast as surging fuel costs weigh on corporate profits and consumer spending. At the same time, the inflation outlook is set to be revised sharply higher, reflecting rising oil-related input costs and growing evidence that firms are passing those costs on to customers.UBS economists revised away from an April hike call earlier this month, citing a significant fading in market expectations, though the broader consensus has not abandoned the tightening narrative. Nearly two-thirds of economists in a Reuters poll still expect the benchmark rate to reach 1.0% by the end of June.With the rate decision itself largely a foregone conclusion, the market focus falls squarely on Ueda's tone. A clear signal that the BOJ stands ready to resume hiking once the fog of the Iran conflict lifts could offer the yen meaningful support and reassure investors that Tokyo has not quietly shelved its path toward policy normalisation.-- Bearish for the yen near term, with an expected BOJ hold reinforcing the wide rate differential with the U.S. Fed and keeping the currency close to the 160-per-dollar intervention threshold. Bullish for Japanese import-cost inflation, as the Hormuz disruption sustains elevated crude prices and adds to pipeline price pressure. Hawkish guidance from Ueda at his post-decision press conference could offer the yen modest support. The quarterly outlook report is a key watch: a simultaneous downward revision to growth and upward revision to inflation would deepen the BOJ's dilemma and could unsettle JGB markets. UBS has already revised away from an April hike call, citing significantly faded market expectations. Nearly two-thirds of Reuters-polled economists still see a move to 1.0% by end-June This article was written by Eamonn Sheridan at investinglive.com.

The gap between Washington and Tehran may be narrower than it appears, with early negotiations expected to centre on securing unrestricted passage through the Strait of Hormuz. Mediators are pressing both sides hard, viewing the coming days as a critical window for a deal, according to CNN sources. This article was written by Eamonn Sheridan at investinglive.com.

Governor Ueda will follow up with a press conference at 0630 GMT (0230 US Eastern time).Hold expected:BOJ expected hold but deliver hawkish signal on June moveBOJ may lean more hawkish - NomuraUSD/JPY firmsBoJ preview: no change expectedBut:Preview: Bank of Japan rate decision knife-edge, Japan inflation runs hotter than expected This article was written by Eamonn Sheridan at investinglive.com.

Bessent warns firms providing fuel, maintenance or airport services to sanctioned Iranian airlines they face U.S. sanctions, as Treasury expands enforcement under its "Economic Fury" initiative.SUMMARYBessent warned businesses offering fuel, maintenance or airport services to sanctioned Iranian airlines they face U.S. sanctions. The warning targets third parties facilitating Iranian carrier activity as Tehran resumes commercial flights to regional destinations. The Trump administration previously sanctioned two UAE-based aviation companies, Parthia Cargo and Delta Parts Supply, for violating sanctions on Mahan Air by providing logistics and parts.Bessent separately confirmed this week that the U.S. will not renew waivers permitting the purchase of Iranian oil currently at sea, calling any such renewal completely off the table. Treasury's OFAC has been intensifying its "Economic Fury" campaign, recently sanctioning more than two dozen individuals, companies and vessels tied to an Iranian oil smuggling network operated by the family of a senior regime official. (U.S. Treasury)Earlier this month, the U.S. also imposed sanctions on 14 people and companies helping Iran rebuild its ballistic missile inventories following U.S.-Israeli strikes, targeting entities in Iran, Turkey and the UAE. U.S. Treasury Secretary Scott Bessent has put the global civil aviation industry on notice, warning that any business providing services to sanctioned Iranian airlines now risks falling under U.S. sanctions enforcement, as Washington continues to tighten its maximum pressure campaign against Tehran.The warning covers a broad range of service providers, including companies offering fuel supply, aircraft maintenance and airport ground services. Bessent urged foreign governments to take active steps to prevent firms within their jurisdictions from extending support to Iranian carriers, signalling that the Treasury intends to pursue third-party enforcement aggressively.The move comes as Iran has resumed commercial flights to a number of regional destinations, raising concerns in Washington that international aviation service firms could become a new vector for sanctions evasion. The Treasury's Office of Foreign Assets Control is expanding enforcement actions under the administration's "Economic Fury" initiative, the latest phase of a sustained campaign to choke off revenue flows to the Iranian regime.The administration has previously acted against aviation sector violators, sanctioning two UAE-based companies, Parthia Cargo and Delta Parts Supply, for breaching sanctions on Iran's Mahan Air by supplying logistics services and aircraft parts. Federal prosecutors also filed criminal charges in that case.The aviation warning is the latest in a series of escalating financial measures. Bessent confirmed this week that the U.S. will not renew waivers that had temporarily allowed the purchase of Russian oil products currently at sea, and stated that any comparable exemption for Iranian oil is entirely off the table. FAC has also recently sanctioned more than two dozen individuals, companies and vessels connected to a multi-billion dollar Iranian oil smuggling network linked to the family of a deceased senior Iranian security official, describing the action as its largest single designation since the Trump administration revived maximum pressure on Tehran.Separately, the Treasury this month sanctioned 14 people and entities for helping Iran reconstitute its ballistic missile production capacity following strikes by U.S. and Israeli forces, with targets identified in Iran, Turkey and the UAEThe cumulative pressure is unfolding against a fragile diplomatic backdrop. Iran has made a formal proposal to end hostilities, and the White House is yet to respond. Whether Bessent's aviation warning is designed to strengthen Washington's hand at the table or signal that no concessions are forthcoming ahead of talks remains an open question, but the direction of Treasury policy leaves little room for ambiguity.---Bearish for any aviation services firm with exposure to Iranian routes or carriers. The warning broadens secondary sanctions risk beyond direct Iran trade to fuel suppliers, maintenance providers and airport operators globally. Regional carriers and ground handlers in Turkey, the UAE and Central Asia face the sharpest compliance exposure given Tehran's resumed flights to regional destinations. The signal reinforces the Treasury's "Economic Fury" posture and, against the backdrop of Iran's peace proposal, suggests Washington is in no mood to ease financial pressure ahead of any diplomatic outcome. Marginally bullish for compliant aviation services firms that can absorb diverted business. This article was written by Eamonn Sheridan at investinglive.com.

The Bank of Japan hold expected:Preview: BOJ expected hold but deliver hawkish signal on June moveBOJ may lean more hawkishly to ease pressure on the yen - NomuraUSD/JPY firms. Count down to the BOJ decisionBoJ preview: no change expectedNot a unanimous expectation: Preview: Bank of Japan rate decision knife-edge, Japan inflation runs hotter than expectedThat 0300 time is just an estimate: This article was written by Eamonn Sheridan at investinglive.com.

Dallas Fed April manufacturing index -2.3 vs -0.2 priorCanada to set up $25 bilion sovereign wealth fundIran says it's looking into the US request for negotiationsUS sells 5-year notes at 3.955% vs 3.960% WIA big reason why US stocks have been so strong this year: Earnings are growingMarkets:S&P 500 up 0.1%WTI crude oil up $1.72 to $96.11Gold down $31 to $4676US 10-year yields up 2.8 bps to 4.337%AUD leads, CHF lagsIt's a huge week for central bank decisions and earnings along with the Iran war but that led to something of a paralyzed market on Monday. Trump was unusually quiet and so were the leaks around the war.On the weekend, we learned that Iran had delivered some proposals about ending the war, then talking about the nuclear program. Virtually all the reports say it's unlikely to be accepted by the US and Trump today met in the Situation Room with his security team. So far, we haven't heard from him but the White House did say there were discussions and teased we could be hearing from Trump.So we wait to see what he will do next as US forces amass in the Middle East. Iran has taken a tough line publicly but we don't know what's happening behind the scenes and the overall market is relatively sanguine with the tech market virtually indifferent as it continues to bid up chip names on AI enthusiasm.The oil market chopped higher but remained within the range of last Thursday-Friday while yields grinded higher.In FX, we await the Bank of Japan decision. USD/JPY slipped in Asia and Europe but recovered in the US on broader USD selling. The commodity currencies were well bid as they're increasingly acting like safe havens in the war. The Canadian sovereign wealth announcement appeared to be well received but tomorrow's budget update was teased by Carney as something Canadians would like (i.e. giveaways). In terms of names, Micron, Nvidia, Intel, Palo Alto Networks and healthcare names were among the leaders. Dominoes Pizza and Dollar Tree were the S&P 500 laggards. This article was written by Adam Button at investinglive.com.

The copper bull case got a fresh proponent today as Scotiabank's Orest Wowkodaw is back with a market update barely a month after his last one, and the message is that things are tightening faster than expected. Three major supply blows — Grasberg cuts, Kamoa-Kakula downgrades, and Barrick parking the Reko Diq project — have forced a rewrite of the deficit math.How material? Scotia now sees a 2026 deficit of 529kt and a 2027 deficit of 375kt, up from 350kt and 99kt previously. That's 1.9% and 1.3% of demand. The medium term looks even uglier on the supply side, with the 2030 deficit ballooning to 1,010kt from 713kt. Wowkodaw's blunt take:"Overall, the recently updated multi-year guidance downgrades to Grasberg and Kamoa-Kakula, combined with the deferral of Reko Diq, are material to the market and represent a very bullish development for the Cu price outlook."Copper is flat today at $6.03 but has weathered the growth risks from the Iran war surprisingly well and that's a good sign.The supply backdrop is so weak that demand growth of just 1.4% per year is now enough to balance the market through 2028, down from 1.75% previously, according to Scotia. That's a low bar.Scotia explicitly isn't baking in two real risks. From the report:"Although our analysis assumes no demand impacts from potential economic weakness associated with elevated oil/diesel/energy prices from the ongoing Middle East conflict, we also don't account for potential supply risks to Cu cathode production (~15% of global mine output) due to sulphuric acid shortages and materially higher input costs."A large portion of sulphuric acid used in copper mines passed through the Strait of Hormuz. If the blockade continues, or restarts are slow, the deficit forecast might actually be conservative on the supply side. Cathode at risk is roughly 15% of global mine output. Spot copper sits at $6.03/lb, and the equities are pricing in $6.21/lb on Scotia's 8% NAV math — only a 4% premium. That sounds reasonable until you see the context:"The current 4% premium to spot is well below the three-year average premium of 19% and the long-term (since 2018) average premium of 9%."Translation: copper miners are cheap relative to where the metal trades, especially when you stack the bullish supply revisions on top. In 2025, the average premium was 15%, with a 26% peak in January. Today's 4% leaves room to run if Scotia's deficit forecasts are right.On individual names, FM is the top pick — penalized for Cobre Panama uncertainty but trading at an implied $5.32/lb, well below spot. CS, ERO, FCX, and LUN round out the recommended exposure list. IVN looks structurally undervalued too, helped by a Platreef contribution and despite Kamoa-Kakula disappointment. Target prices for the SO-rated names: FM C$47 (31% upside), CS C$15.50 (34%), ERO C$50 (34%), FCX US$67 (11%), LUN C$36 (-3% — already ran past target after February's pop to $44).Q1 reporting season in May is the next checkpoint but it's looking like the multi-year copper deficits I've been writing about for years aren't a forecast anymore, they're the base case. This article was written by Adam Button at investinglive.com.

The market is pricing in only a tiny chance of a Bank of Japan rate hike today but it's a central bank that's notorious for surprises, so we will be keeping a close eye. Excluding that, the market will be tuned into signals for the June 16 meeting, which is priced at roughly 50/50 for a rate hike.In terms of the market, USD/JPY is flat on the day at 159.39 after falling as low as 159.10. The pair bounced off the level four times before the bounce in the past few hours. The move came on some broader USD losses as the stock market shows some optimism on the Iran war.Looking at the chart, it's been a sideways chop since the second week of March as the drag from oil hurts the yen but not enough to break the 160.00 barrier due to the threat of intervention. In addition, it's golden week in China with four national holidays that will kick off on April 29 and extending to May 5. That will sap liquidity and I don't think FX officials would look kindly on a break at that point unless it was due to a big shift in the Iran war (and probably not then either).The 160.00-161.00 range is the obvious support cap and if that cracks, the pair could really run. The downside isn't any different because if 160.00 marks a top, there will be a rush towards sales, particularly if the war ends and Warsh signals rate cuts after confirmation.As usual, the BOJ has no set time of release but the latest we have to wait for it (beyond 11 pm ET), the more likely we are to get a surprise. Also worth noting is that we have had some big moves post- BOJ so far this year, even at times there weren't surprises so keep a close eye. This article was written by Adam Button at investinglive.com.

Trump was unusually quiet on Truth Social today but just tweeted out something about talk show host Jimmy Kimmel, calling for him to be fired. The White House briefing is ongoing and Leavitt would not say that they are considering Iran's proposal, but it is under discussion. That's something but might just suggest that Trump's security meeting hasn't happened yet. She also said we will hear from Trump soon about Iran.My guess is that means he hasn't made a decision yet about what to do next.It's odd that both oil and stock markets are at the highs of the day. Brent was briefly up $4 but has since given a touch back. The S&P 500 is up 0.1% after trading lower for most of the day.Leavitt did say the meeting with top security aides had taken place earlier and now perhaps Trump is considering it. Given that, you would think he would have better things to worry about than a talk show host"I would just say that there was a discussion this morning that I don't want to get ahead of, and you'll hear directly from the Preside, I'm sure, on this topic," she said.She also said "The Presidents red lines with respect to Iran have been made very, very clear, not just to the American public, but also to them as well."Given everything that both sides have said publicly, it's tough to find common ground. At one point it looked like Iran would give up the nuclear for sanctions relief and unfrozen funds but with Hormuz control unclear and Iran sticking to talk on closing US bases and hardliners seemingly in charge, the calculus gets tougher. Iran also gains leverage from keeping Hormuz closed, though it's not clear how long they can hold out with their own oil cut off.What worried me today was a public criticism from Germany's Merz about the US lacking an exit strategy. That makes me think the behind-the-scenes work hasn't been fruitful. This article was written by Adam Button at investinglive.com.

Prior was 3.980%6-auction average of 3.725%.Bid to cover at 2.33 vs 2.29 priorThe two-year sale tailed by 0.1 bps and this one by 0.5 bps. Those aren't big misses but Treasury yields are now at the highs of the day, up 3-4 bps across the curve. We could finally be seeing some Iran war angst, though not yet in the stock market.WTI crude was last up $2.26 to $96.65 and brent is closing in on $110. The big round numbers are likely to be the pain points in the market, and maybe in politics as well.For background, the US Treasury funds federal borrowing by selling marketable securities — bills, notes, bonds, FRNs, and TIPS — through regularly scheduled public auctions that set the clearing yield. The 5-year note is auctioned monthly: announced in the second half of the month, sold a few business days later, and issued on the last calendar day. Bids come in two forms. Noncompetitive bids, typically from retail investors, agree to take whatever yield the auction produces. Competitive bids, dominated by primary dealers and large institutions, specify the yield the bidder is willing to accept. Treasury fills noncompetitives first, then works competitive bids from lowest yield up until the offering size is exhausted, with all winners paying the highest accepted yield (a single-price, or "Dutch," auction). The full calendar of auction sizes is laid out at the Quarterly Refunding announcement on the first Wednesday of February, May, August, and November.5-year note auction sizes ramped sharply from late 2023 through early 2024 to fund widening deficits, then plateaued. As of the November 2025 refunding, Treasury signaled it expects to hold nominal coupon sizes steady for at least several more quarters, though it has begun preliminarily evaluating future increases. This article was written by Adam Button at investinglive.com.

We are right in the heart of earnings season with 42% of the S&P 500 reporting this week, including most of the Mag7. The performance of the stock market since the start of April has been astounding. This chart from JP Morgan highlights a big reason why.Annual S&P 500 EPS estimates almost always drift lower in the first months of the year as the initial optimism of analysts meets the messier reality of guidance, costs, and macro surprises. As JPMorgan put it, earnings revisions have broken from a long-standing seasonal pattern in 2026, with estimates rising rather than falling in the first quarter. The bank's framing captures the oddity neatly: "Over the past 15 years, [analysts have] revised their EPS estimates down by an average of 2% between January and April... 2026 is a different story."Three forces explain the inversion. First — and biggest — is the AI capex super-cycle finally hitting income statements. Technology sector estimates have been revised sharply higher since mid-February, with much of the move tied to Oracle and Micron, the latter benefiting directly from memory content growing inside Nvidia's chips. Hyperscaler capex is now tracking toward roughly $775 billion for 2026, and that spending is showing up as revenue and margin for the semiconductor and infrastructure names downstream. Tech profit margins are running near record highs.Second, the One Big Beautiful Bill Act, signed in July 2025, is doing real work on bottom lines. It restored 100% bonus depreciation retroactively to mid-January 2025 and reinstated immediate expensing of R&D — both massive boosts to capital-intensive businesses and the hyperscalers in particular. Morgan Stanley estimates the bill's immediate write-off provisions will lift hyperscaler free cash flow by roughly $30 billion in 2026.Third, breadth is improving. Q1 beats have been led by Industrials, Financials, and Materials alongside Tech, suggesting the upgrade cycle isn't purely a Mag 7 story. JPMorgan now sees 2026 EPS of $330, up from $315. This article was written by Adam Button at investinglive.com.

On Telegram, Iran's foreign minister said the US has reached out to request negotiations and that they're looking into the request.On the weekend, Trump said Iran could call the USA if it wanted talks, now Iran says the opposite is underway. Who knows what the truth is but Trump is holding a meeting today in the Situation Room and that's the main event of the day.Iran's foreign minister Araghchi said the US has asked for negotiations because it hasn't achieved any of its objectives on the battlefield. Meanwhile, Europe is getting increasingly impatient. German Chancellor Friedrich Merz took aim at Washington's approach to the Iran conflict, arguing the US joined the war without a defined strategy for getting out, which has complicated efforts to reach a resolution. He cautioned that Iran is "skillfully not negotiating" and charged Tehran with outsmarting American diplomatic efforts, claiming the U.S. is being "humiliated" by Iran's leadership. Drawing parallels to America's earlier military involvements in Afghanistan and Iraq, Merz pointed to them as warning signs of what happens without a clear plan. Germany, he noted, stands prepared to assist in reopening the Strait of Hormuz through mine-clearing operations—but only once hostilities have ceased.Reports last week said Iran was laying more mines.As I wrote earlier today, the propaganda in this war is out of control and it's very hard to tell what's true and what's not. The market is betting it will end soon but I don't think Merz would be saying that if he thought a resolution was close and you have to imagine he's getting all the NATO briefings, and whatever intel that Germany can muster. So I don't take his comments as a good sign.WTI crude is up $1.81 to $96.18 today.Update: US Secretary of State Marco Rubio said the US cannot tolerate Iran normalizing control of Hormuz. That's perhaps a sign of which way today's US Situation Room meetings will go. This article was written by Adam Button at investinglive.com.