2025-05-19 04:13

TOKYO, May 19 (Reuters) - The Bank of Japan will continue to raise interest rates if the economy rebounds from an expected hit from higher U.S. tariffs, the central bank's deputy governor Shinichi Uchida said, while warning of a highly uncertain outlook. Japan's underlying inflation will stay around the BOJ's 2% target if there is an economic rebound, Uchida told parliament. Sign up here. He noted that recent gains in domestic prices were largely due to higher import costs and increasing food costs, such as for rice. "We are mindful that such price rises are having a negative impact on people's livelihood and consumption," he said. "If our forecast materialises, we will continue to raise our policy rate," Uchida said. "But there is extremely high uncertainty over the outlook for each country's trade policy and its fallout. As such, we will determine without pre-conception whether the economy and prices move in line with our forecast," he added. Japan's economy shrank for the first time in a year and at a faster pace than expected, data for the March quarter showed on Friday, underscoring the fragile nature of its recovery now under threat from U.S. President Donald Trump's trade policies. Having exited a decade-long stimulus policy last year, the BOJ raised interest rates to 0.5% in January and has signaled its readiness to keep hiking borrowing costs if a moderate economic recovery keeps Japan on track to durably hit its 2% inflation target. But fears of a Trump-induced global slowdown forced the BOJ to sharply cut its growth forecasts at its April 30-May 1 policy meeting, and cast doubt on its view that sustained wage hikes will underpin consumption and the broader economy. https://www.reuters.com/business/boj-keep-raising-rates-if-inflation-track-hit-2-deputy-governor-says-2025-05-19/

2025-05-19 03:55

Bessent: Trade deal timing also depends on 'good faith' talks Bessent: Notified countries likely to see April 2 rates return Expect a lot of regional deals, Treasury chief says Bessent says Walmart will 'eat' some tariffs, after call with CEO WASHINGTON, May 18 (Reuters) - President Donald Trump will impose tariffs at the rate he threatened last month on trading partners that do not negotiate in "good faith" on deals, Treasury Secretary Scott Bessent said in television interviews on Sunday. He did not say what would constitute "good faith" negotiations or clarify the timing to announce any decisions to return a country to the various rates Trump initially imposed on April 2. Sign up here. Trump has repeatedly reversed course since then, notably on April 9, when he lowered his tariff rates on most imported goods to 10% for 90 days to give negotiators time to hash out deals with other countries. He separately lowered the rate for Chinese goods to 30%. On Friday, he reiterated that his administration would send letters telling nations what their rates would be. On Sunday, Bessent said the administration was focused on its 18 most important trading relationships and that the timing of any deals would also depend on whether countries were negotiating in good faith, with letters going out to those that did not. "This means that they're not negotiating in good faith. They are going to get a letter saying, 'Here is the rate.' So I would expect that everyone would come and negotiate in good faith," he told NBC News' "Meet the Press." He added that those countries that are notified would likely see their rates return to the levels set on April 2. Asked when any trade deals could be announced, Bessent separately told CNN's "State of the Union" program: "Again, it will depend on whether they're negotiating in good faith." "My other sense is that we will do a lot of regional deals -this is the rate for Central America. This is the rate for this part of Africa," he added. Trump's ongoing trade wars have severely disrupted global trade flows and roiled financial markets as investors grapple with what Bessent has called the Republican president's "strategic uncertainty," in his drive to reshape economic relationships in the U.S.' favor Companies of all sizes have been whipsawed by Trump's swift imposition of tariffs and sudden reversals as they seek to manage supply chains, production, staffing and prices. Congress is also grappling with the tariffs as it weighs revenues and tax cuts in its spending bill. Walmart (WMT.N) , opens new tab, the world's largest retailer, last week said it would have to start raising prices later in May due to the high costs of tariffs, prompting Trump to slam the company for blaming the increases on his trade policies. "Between Walmart and China they should, as is said, 'EAT THE TARIFFS,' and not charge valued customers ANYTHING," Trump posted online on Saturday. Bessent said he had spoken to Walmart CEO Doug McMillon on Saturday and that the company would absorb some tariffs. Representatives for the retailer declined to comment. "Walmart is, in fact, going to ... eat some of the tariffs," Bessent told NBC. "I didn't apply any pressure." https://www.reuters.com/business/retail-consumer/trump-carry-out-tariff-threats-if-nations-dont-negotiate-good-faith-bessent-says-2025-05-19/

2025-05-19 02:59

MUMBAI, May 19 (Reuters) - The Indian rupee may open little changed on Monday, with traders watching flows, updates on the U.S.-India trade talks, and the Chinese yuan’s trajectory following last week’s turbulence. The 1-month non-deliverable forward indicated that the rupee will open barely changed from 85.5050 against the U.S. dollar on Friday. Sign up here. The rupee moved in a broad range of 84.62 to 85.72 last week, before posting a weekly decline despite the truce between India and Pakistan. Bankers attributed the weakness to persistent dollar demand stemming from near-term payment requirements and a one-off outflow facilitated by foreign and state-owned banks. The rupee’s near-term outlook is clouded after last week’s broad two-way price action, said a currency trader at a private bank. "The 85.80-86.00 level will prove to be a formidable resistance (for dollar/rupee pair) and I am inclined to sell there more than buying on weakness." Besides flows, interbank traders will track headlines on the U.S.-India trade agreement. The lingering uncertainty on that front has weighed on the rupee’s performance, MUFG Bank said last week. Meanwhile, the offshore Chinese yuan was marginally weaker, having inched up last week. The U.S. and China agreed to a deal last week to slash reciprocal tariffs, boosting the yuan and lifting risk appetite. The dollar advanced against its major peers last week. It was little changed on Monday. Moody's downgrade of the U.S. credit rating - the last of the major ratings agencies to slash the rating - did not have much of an impact on the dollar or U.S. Treasury yields. The rating agency cited rising debt and interest for the rating change. The U.S. fiscal challenges is a surprise to no one, ANZ Bank said in a note. KEY INDICATORS: ** One-month non-deliverable rupee forward at 85.66; onshore one-month forward premium at 15.5 paise ** Dollar index little changed at 100.83 ** Brent crude futures down 0.1% at $65.3 per barrel ** Ten-year U.S. note yield at 4.49% ** As per NSDL data, foreign investors bought a net $671.4 mln worth of Indian shares on May 15 ** NSDL data shows foreign investors sold a net $86 mln worth of Indian bonds on May 15 https://www.reuters.com/world/india/rupee-seen-little-changed-traders-eye-flows-us-india-trade-talk-updates-yuan-2025-05-19/

2025-05-19 00:56

TOKYO, May 19 (Reuters) - Japan suspended imports of poultry meat from the city of Montenegro and live poultry from the broader Brazilian state of Rio Grande do Sul last Friday following an outbreak of bird flu, an official at Japan's agriculture ministry said on Monday. Brazil, the world's largest chicken exporter, confirmed its first outbreak of bird flu on a poultry farm on Friday, triggering protocols for a country-wide trade ban from top buyer China and state-wide restrictions for other major consumers. Sign up here. https://www.reuters.com/world/japan/japan-partially-suspends-poultry-imports-brazil-after-bird-flu-outbreak-2025-05-19/

2025-05-19 00:47

U.S. stocks end flat to slightly higher Treasury yields rise, dollar retreats after Moody's downgrade Investors also focused on U.S. tax bill NEW YORK, May 19 (Reuters) - Longer-dated Treasury yields gained while the dollar broadly eased on Monday amid concerns about the U.S. debt load and a tax-cut bill, following Moody's downgrade of the country's sovereign credit rating. Major U.S. stocks indexes recovered from early losses to end the day flat to slightly higher. Sign up here. Late on Friday, Moody's Investors Service cut the United States' sovereign credit rating from the top triple-A rank, highlighting the country's deteriorating fiscal outlook. U.S. President Donald Trump's sprawling tax-cut bill was approved by a key congressional committee on Sunday. Republicans who control the U.S. House of Representatives will try to push the bill toward passage this week. The 30-year Treasury yield hit an 18-month high before backing off those levels. Investors were concerned that the tax bill will increase the debt load by more than previously expected. The 30-year bond yield gained 3.7 basis points to 4.934% after touching 5.037%, the highest since November 2023. The yield on benchmark U.S. 10-year notes rose 3 basis points to 4.469%, having earlier reached 4.564%, the highest since April 11. "What Moody's did was really more symbolic than anything else. The other agencies had already downgraded the debt," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "Yes, yields are moving higher on the news... But they are moving up for other reasons as well," he added. "In general the (stock) market is not really reacting all that much to the Moody's announcement. Rather, it's a market that's come up and is looking to perhaps consolidate its recent moves." The downgrade from Moody's follows similar moves from Fitch in 2023 and Standard & Poor's in 2011. U.S. Treasury Secretary Scott Bessent used television interviews on Sunday to dismiss the downgrade. Some Federal Reserve officials on Monday commented on U.S. markets following the downgrade. Speaking at a conference held by the Mortgage Bankers Association in New York, New York Fed President John Williams said investors are "clearly" weighing future options. Nevertheless, he said investors "have viewed and continue to view" the U.S. as "a great place to invest, including Treasuries, fixed income assets, so I think that that narrative is still there." The Dow Jones Industrial Average (.DJI) , opens new tab rose 137.33 points, or 0.32%, to 42,792.07, the S&P 500 (.SPX) , opens new tab rose 5.22 points, or 0.09%, to 5,963.60 and the Nasdaq Composite (.IXIC) , opens new tab rose 4.36 points, or 0.02%, to 19,215.46. The S&P 500 had registered its fifth straight day of gains on Friday. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rose 1.77 points, or 0.20%, to 882.39. The pan-European STOXX 600 (.STOXX) , opens new tab index rose 0.13%, while Europe's broad FTSEurofirst 300 index (.FTEU3) , opens new tab rose 2.80 points, or 0.13%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab closed lower by 0.5%, with a mixed bag of Chinese data showed a struggling economy. The U.S. dollar declined, hitting a more than one-week low against the safe-haven yen, Swiss franc and euro. Against the Japanese yen , the dollar weakened 0.55% to 144.82. Trump's tariff war has sapped consumer sentiment, and analysts will be scouring earnings from Home Depot (HD.N) , opens new tab and Target (TGT.N) , opens new tab this week for an update on spending trends. Home Depot is due to report on Tuesday before the opening bell. Trump said on Saturday that Walmart (WMT.N) , opens new tab should "eat the tariffs" after the world's largest retailer said it would have to start raising prices due to the levies. Atlanta Fed President Raphael Bostic told CNBC on Monday the central bank may only be able to cut interest rates by a quarter point over the rest of the year given concerns about rising inflation stoked by higher import taxes. Finance leaders from the Group of Seven democracies will strive for a show of unity when they meet this week on topics other than Trump's tariffs, including economic security, Ukraine and artificial intelligence cooperation. Oil prices ended slightly higher as signs of an impasse in U.S. talks with Iran over its nuclear program offset Moody's downgrade. Brent crude futures rose 13 cents to settle at $65.54 a barrel, while U.S. West Texas Intermediate crude rose 20 cents to settle at $62.69 a barrel. Gold prices gained, with spot gold up 0.9% at $3,229.51 an ounce, while U.S. gold futures settled 1.5% higher at $3,233.5. https://www.reuters.com/markets/global-markets-wrapup-1-2025-05-19/

2025-05-19 00:22

HONG KONG, May 19 (Reuters) - Heavy rains in China's southern Guangdong and Guangxi provinces killed five people and left several missing over the weekend as authorities issued alerts for severe rain, mountain flooding and geological disasters in the south of the country. China's National Meteorological Centre issued multiple warnings over the weekend of heavy rains in areas of Jiangxi, Zhejiang, Fujian, Guangxi, Guangdong and the northwestern province of Xinjiang from Sunday to Monday, said the official Xinhua news agency. Sign up here. A yellow alert was issued in parts of Zhejiang, Fujian, Guangdong and Guangxi, indicating a relatively high risk of mountain flooding, Xinhua said. China has a four-tier weather warning system with red representing the most severe warning, followed by orange, yellow and blue. Chinese meteorological data shows 2024 was the warmest year for the country since comparable records began more than six decades ago, the second straight year in which milestones were broken. Last year's warmer weather was accompanied by stronger storms and higher rainfall and led to spikes in power consumption in the world's second-largest economy. State broadcaster CCTV said heavy rain was also expected from Monday to Tuesday in areas including the far western region of Xinjiang along the Tianshan Mountains. https://www.reuters.com/sustainability/climate-energy/heavy-rains-kill-5-chinas-south-authorities-issue-disaster-alerts-2025-05-19/