The yen steadied as Japan’s key price measure cooled a tad more than expected while remaining well above the Bank of Japan’s target. The dollar dipped as Federal Reserve Governor Christopher Waller said policymakers should cut interest rates this month to support a labour market that is showing signs of weakness. Treasuries rose as yields on the 10-year fell for a third day.
The cross-asset moves were a sign of bullish risk appetite,e a day after speculation that President Donald Trump would fire Jerome Powell sent volatility spiking. The gains in equities reflected strong economic data and confidence that US companies will deliver robust second-quarter earnings, calming the uncertainty caused by Trump’s tariff war.“As long as the economy continues to expand and unemployment remains low, then people will continue to spend and the flywheel can keep generating higher profits, which is the engine for higher stock prices,” said Chris Zaccarelli at Northlight Asset Management.
A June advance in US retail sales tempered concerns about weaker consumer spending. Applications for US unemployment benefits declined for a fifth straight week to the lowest since mid-April, showing a resilient job market.Elsewhere, a White House shift on US chip bans that impacts Nvidia Corp. and Advanced Micro Devices Inc. has spurred talk of a grand tech bargain between Washington and Beijing. Separately, the US Commerce Department imposed preliminary anti-dumping duties on Chinese imports of graphite, a key battery component.
Fed Bank of San Francisco President Mary Daly said it’s reasonable for policymakers to plan on two rate cuts this year, emphasising that the central bank should not wait too long before moving. Fed Governor Adriana Kugler said officials should keep holding rates steady “for some time,” citing accelerating inflation as tariffs start to boost prices.
Meanwhile, Powell remains under pressure, with Representative Anna Paulina Luna saying she is “criminally referring” the Fed chair to the Justice Department to investigate “perjury.” Such referrals by lawmakers are not legally binding.
Powell countered criticisms leveled at the central bank by a top White House official over a $2.5 billion renovation project in a letter saying “we take seriously the responsibility to be good stewards of public resources.”
Read More: Oil holds gain as traders weigh signals of near-term tightness
