ForexLive Asia-Pacific FX news wrap: USD softens a little as risk appetite steadies

• China FX regulator says will keep yuan basically stable at reasonable and balanced levels
• European Central Bank speakers Wednesday include Lane, de Guindos
• Chinese officials says consumption has become China’s biggest growth engine
• Recap: Japan PM Ishiba says disagreements remain with US on tariff talks
• Next 24 / 48 hours critical in deciding between diplomatic or military solution on Iran
• PBOC Governor says will improve monetary policy toolbox
• PBOC sets USD/ CNY mid-point today at 7.1761 (vs. estimate at 7.2027)
• Japan PM Ishiba: Cash handout is quickest and most effective way to help with high prices
• No US military action – Oil prices dip, equities ticking up, risk FX tics higher too
• US plans to ease capital rule limiting bank treasury trades
• Here’s how you can track oil price volatility using options implied volatility
• Japanese Exports for May 2025 -1.7% y/y vs. expected -3.8%
• Japan manufacturer sentiment worsens in June to +6, from +8 in May
• BlackRock CIO Reider says on the FOMC: “There is no reason why you wouldn’t just end QT”
• New Zealand Current Account Q1 2025 -2.324bn ( expected -2.2bn, prior -7.037bn)
• Netanyahu and Trump held a phone call a few minutes ago
• Extend and pretend Trump version: Trump to extend TikTok sale deadline for another 90 days
• New Zealand consumer confidence inches higher, but remains subdued
• Reports that Trump is to give a “major address” soon
• Oil price support on Iran retaliation likely to include mines in the Strait of Hormuz
• Forexlive Americas FX news wrap 17 Jun: US deciding on joining fight against Iran.
• Oil: private survey of inventory shows a headline crude oil draw much larger than expected
• Israeli media says the US could join the war against Iran tonight
• US stock markets struggle on Iran angst. S&P 500 down 0.8%
• Trade ideas thread – Wednesday, 18 June, insightful charts, technical analysis, ideas

Iran and Israel exchanged fresh missile strikes, extending their aerial confrontation into a sixth day. Markets entered the Asian session wary of possible U.S. military intervention after a series of aggressive tweets from President Trump, including a demand for Iran’s UNCONDITIONAL SURRENDER!

However, after meeting with his National Security Council to discuss military options, Trump’s next public message focused instead on flagpole installations at the White House — a notable shift in tone.

Speculation around U.S. action persisted, fuelled by the U.S. Embassy in Israel announcing a shutdown from Wednesday through Friday. Employees and their families have been ordered to shelter in place, with consular services in Tel Aviv also suspended.

As of writing, there are no confirmed U.S. strikes, and some of the initial risk aversion has faded. The U.S. dollar is broadly weaker, with the EUR, AUD, NZD, CAD, JPY, and CHF all modestly firmer. GBP is lagging, but up also. FX ranges remain tight, and U.S. equity index futures are little changed. Brent crude has eased slightly from recent highs.

On the data front, Japan’s exports fell year-on-year in May for the first time since September 2024, adding to concerns about a potential technical recession after Q1’s negative GDP print.

• Exports declined -1.7% y/y, led by weakness in cars, steel, and mineral fuels — a better result than expectations for a -3.7% drop.
• Imports fell -7.7%, driven by declines in crude oil and coal shipments.

In China, PBoC Governor Pan Gongsheng said shadow banking risks have “dropped significantly.” He also noted the yuan has become the world’s third most-used currency for payments. Separately, China’s FX regulator (SAFE) reiterated its commitment to keeping the yuan “basically stable at reasonable and balanced levels.”

Brent update:

This article was written by Eamonn Sheridan at www.forexlive.com.