ForexLive Asia-Pacific FX news wrap: Musk, Trump tension eases, Japan data soft

• JP Morgan expects ECB to deliver the next cut in September vs prior forecast of July
• Trump says on Musk “It’s going very well, never done better.”
• European Central Bank President Lagarde is speaking again on Friday
• Canada PM Carney spoke with the Premier of China, Li Qiang
• Musk pulling back in his feud with Trump, says better together
• Goldman Sachs expects headline 125k in payroll growth for May
• Need a non-farm payroll preview – we’ve got you covered!
• Elon Musk says won’t decommission Dragon spacecraft
• PBOC sets USD/ CNY reference rate for today at 7.1845 (vs. estimate at 7.1935)
• Senate Republicans open the door to cutting Medicare in Trump big spending agenda bill
• Japan fin min Kato asked about US Treasury report on Japan, says monetary policy up to BOJ
• Bessent, Lutnick & Greer bickering in front of Japan trade negotiators hindering progress
• Is Japan about to do it own tariff taco? Ishiba to ease demand for US auto tariff repeal?
• May non-farm payrolls preview by the numbers: What does the data say
• Japan data – April household spending -0.1% y/y (expected +1.4%, prior +2.1%)
• WSJ: Iran orders material from China for hundreds of ballistic missiles
• Australian PM Albanese says won’t back down on biosecurity in trade talks with tariff man
• More from Germany’s Merz, says US tariffs are threatening our economy
• German Chancellor Merz told CNN that Europe is seeking greater independence from China
• (Not new news) Japan to let REITs add data center equipment to portfolios
• What is the People’s Bank of China planning?
• Elon Musk says the Trump tariffs will cause a recession in the second half of 2025
• Forexlive Americas FX news wrap: Trump and Xi talk, Trump and Elon fight
• US Treasury says no other country manipulates their own currency
• Trade ideas thread – Friday, 6 June, insightful charts, technical analysis, ideas

The early focus in Asia was on the fallout from the Musk-Trump tiff, which had weighed on U.S. equities into Thursday’s close. But once Globex reopened for U.S. evening trade, the major indices bounced, showing signs of resilience.

Elon Musk took steps to dial back the dispute, posting on social media that he would not follow through on threats to decommission SpaceX’s Dragon spacecraft. He also added that the U.S. is stronger when Trump and him work together. Trump later echoed the conciliatory tone in comments to Politico, saying of the situation: “Oh, it’s okay… it’s going very well, never done better.” The two are scheduled to speak by phone on Friday. The U.S. dollar edged higher in response to signs of reconciliation.

From Japan, data showed household spending unexpectedly declined in April, underscoring the strain on domestic consumption. Spending fell 1.8% m/m and 0.1% y/y—both well below expectations—after modest gains in March. Although wages have risen, they remain outpaced by inflation, eroding purchasing power. The weak data reinforces the Bank of Japan’s cautious stance. Governor Ueda has made clear that rate hikes remain in question until there is more certainty around wage growth and inflation dynamics. The yen traded slightly weaker following the release.

Elsewhere, Canada’s Prime Minister’s Office released a positive-sounding readout of a call between PM Carney and China’s Premier Li Qiang. The two leaders discussed bilateral relations and agreed to establish regular communication channels between Ottawa and Beijing.

TSLA bounced back more impressively after getting slammed on Thursday.

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