USD/JPY fundamental movers
Trade tensions between the U.S. and China have escalated, and a trade deal between the two super-economies has not materialized, despite assurances from U.S. officials that substantial progress has been made. China has reacted angrily to U.S. sanctions on Huawei and has suspended trade talks with the U.S. Investors remain nervous about the U.S.-China conflict and the weak global economy, and this has boosted the safe-haven yen in recent weeks. The yen posted sharp gains in the month of May, climbing 2.8%.
In the U.S., second-estimate GDP for Q1 posted a strong gain of 3.1%, matching the estimate. This follows the initial reading of 3.2%, which easily beat the forecast of 3.2%. The Core PCE Price Index, the preferred inflation gauge for the Federal Reserve, improved to 0.2% in April, up from 0.0% a month earlier. Consumer confidence sparkled, as CB Consumer Confidence jumped to 134.1, above expectations.