Asian session review: the US dollar is showing positive dynamics

During today's Asian trading, the U.S. dollar rose against major currencies, reversing earlier losses after reports that China may suspend tariffs on some American goods. The news sparked optimism for a potential de-escalation in the ongoing U.S.-China trade war.

The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.39% to 99.68. Yesterday, the index fell by 0.47%. Markets were volatile throughout the week, reacting to conflicting signals. President Trump suggested progress in talks, while Beijing denied formal discussions. Bloomberg reported that China might lift tariffs on U.S. medical devices and industrial chemicals, boosting the dollar. Earlier in the week, Trump unsettled markets by threatening to fire Fed Chair Jerome Powell, only to backtrack later. Meanwhile, the U.S. made progress in trade talks with Japan and South Korea. Japan's officials denied discussions on currency targets, despite Trump's earlier accusations. Analysts suggested that signs of easing tariffs could reduce risk-off sentiment and support the dollar further, though tough negotiations with allies like Japan may cast doubt on progress with China.

The yen fell 0.6% against the US dollar, while investors assessed Japan's inflation data. The Ministry of Internal Affairs said that excluding fresh food, Tokyo core inflation advanced in April to 3.4% from 2.4% in March. This was above economists' forecast of 3.2% and also reached the highest level in two years. Overall consumer prices in Tokyo rose 3.5% after climbing 2.9% in March. Excluding fresh food and energy prices, inflation surged to 3.1% from 2.2% in the previous month. However, despite accelerating inflation, the Bank of Japan is expected to maintain current policies at its next meeting, while monitoring the impact of U.S. tariffs.