U.S. Dollar Hits Two-Month High as Oil, Treasury Yields Surge 
Dollar Holds Near Two-Month High as Yen Approaches 160 
Asian Stocks Fall as Surging Bond Yields Rattle Markets 
RBI Uses $10 Billion Currency Swaps to Drain Excess Rupee Liquidity 
Gold Prices Fall as Treasury Yields Rise on Fed Rate Hike Bets 
Fed’s Hammack Says Bond Yield Surge Is Not Driven by Inflation Fears 
Asian Currencies Mixed as Dollar Holds Near Two-Month High 
US 10-Year Treasury Yield at 6% Emerges as New Market Risk Threshold 
Gold Holds Near $4,275 as Rising Treasury Yields Fuel Fed Rate Hike Bets 
Oil Prices Jump 3% as Houthi Attack Revives Supply Fears 
Japanese Yen Rebounds as Trump Flags Currency Weakness 
Japanese Bank Stocks Surge as Bond Yields Fuel Rate Hike Bets 
Wall Street Ends Flat as Oil, Treasury Yields and Fed Jitters Rattle Markets 
UK PM Burnham to Unveil Economic Vision at Labour Conference 
Fed Unveils Stablecoin Rules Under GENIUS Act 
US Comfortable With Canada Trade Standoff as Import Bans Loom 
Canadian Dollar Faces Pressure as Fed-BoC Policy Gap Widens 
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Japan’s economy shrank more than expected in the first quarter of 2025, dragged down by falling exports and stagnant consumer spending. Official data released Friday showed gross domestic product (GDP) declined 0.7% year-on-year, sharply missing forecasts of a 0.2% drop and reversing the previous quarter’s 2.4% growth. On a quarterly basis, GDP contracted 0.2%, deeper than the 0.1% decline analysts had predicted.
The primary drag came from external demand, which fell 0.8% quarter-on-quarter, exceeding expectations of a 0.6% drop. Japan’s export sector was hit hard by growing uncertainty over global trade, fueled by the U.S. administration’s sweeping tariff measures. President Donald Trump implemented a blanket 10% tariff on all imports, along with additional levies targeting foreign vehicles and select commodities, creating headwinds for Japanese exporters.
A strengthening yen added to export pressures, with rising safe haven demand and a hawkish Bank of Japan supporting the currency’s value. Meanwhile, private consumption remained flat in Q1, disappointing expectations for a 0.1% increase. Despite substantial wage hikes in early 2024, their effect has waned, although new wage negotiations in spring 2025 could reinvigorate spending in the coming months.
On a positive note, capital expenditure rose 1.4% quarter-on-quarter, beating forecasts of 0.8%, offering some support to the overall economic picture. However, with domestic growth slowing, the Bank of Japan may face challenges in tightening monetary policy further.
Inflation remained persistent, with the GDP deflator rising 3.2% year-on-year, matching expectations. Overall, Friday’s data signals a cooling Japanese economy facing external trade headwinds, currency challenges, and muted consumer activity, potentially limiting the scope for rate hikes in the near future.
