Risk assets found support during the session here following Thursday’s headlines from the U.S., where Trump said he would decide whether to strike Iran “within two weeks.” While the phrasing doesn’t rule out an immediate move, markets chose to focus on the delay, and optimism prevailed. The USD slipped against major FX, U.S. equity futures pushed higher, while crude oil and gold edged lower.

Looking ahead, Iranian negotiator Abbas Araqchi is due to meet with the foreign ministers of the UK, France, and Germany in Geneva on Friday. Notably, Trump’s special envoy to the Middle East, Witkoff, will not attend. Separately, Trump is scheduled to convene a National Security Council meeting on Friday.

From Japan, May inflation data showed headline CPI at 3.5%, down slightly from April’s 3.6% but still marking 38 consecutive months above the Bank of Japan’s 2% target. The BoJ’s preferred core measure, CPI excluding fresh food, rose for a third straight month to 3.7% y/y, the highest since January 2023 and a touch above expectations. The rise continues to be driven by staple foods—rice prices are now up 102% y/y, a significant pressure point for consumers. In contrast, services inflation ticked up to 1.4%, modestly higher than April.

Minutes from the BoJ’s April 30–May 1 policy meeting, released today, showed board members broadly supporting further rate hikes over time, though some favored a pause in the near term due to uncertainty surrounding U.S. trade policy. A few policymakers also noted that Japan’s path to achieving stable 2% inflation had likely been delayed by about a year.

From China, the People’s Bank of China left its Loan Prime Rates (LPRs) unchanged on Friday:

  • 1-year LPR held at 3.00%

  • 5-year LPR remained at 3.50%

This decision follows last month’s broad monetary easing and suggests a pause to assess impact on growth momentum.

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Crude update:

crude brent wrap 20 June 2025 2
Source: Forex Live