US-China Talks Stalled, Says Treasury Secretary Bessent
Asia-Pacific FX News Wrap for May 30, 2025
In a recent statement, U.S. Treasury Secretary Scott Bessent reported that trade discussions between the United States and China have come to a standstill. Bessent emphasized the need for renewed direct communication between U.S. President Donald Trump and Chinese President Xi Jinping to potentially resolve the impasse. His comments came during a Thursday interview, where he underlined the complexity and importance of these negotiations.
Bessent’s remarks come after a trip to Switzerland aimed at easing tensions, which had escalated to the point of both nations considering imposing tariffs exceeding 100% on each other’s goods. He expressed optimism about upcoming talks with Chinese officials, hoping they will reinvigorate the stalled discussions.
Economic Indicators in Asia-Pacific
The economic landscape across Asia-Pacific saw several key updates, particularly from Japan and Australia.
Tokyo CPI Surprises with Upsurge
Tokyo’s Consumer Price Index (CPI) for May exceeded expectations, showing a 3.6% year-over-year rise in core CPI, which excludes fresh food. This figure surpassed the anticipated 3.5% and marked an increase from April’s 3.4%, representing the highest rate since January 2023. Core-core CPI, excluding both fresh food and energy, rose to 3.3% year-over-year, against expectations of 3.2%, also the highest since early 2024. The consistency of inflation figures has strengthened arguments for potential policy adjustments from the Bank of Japan.
In light of this data, the Japanese yen momentarily appreciated, with USD/JPY dipping to around 143.50 before stabilizing closer to 144.00. #### Australia’s Retail Sales Show Weakness
In contrast, Australian economic data indicated a decline in consumer spending, with April retail sales posting a 0.1% month-over-month decrease, falling short of the anticipated 0.3% increase. Despite the boost typically associated with the Easter and Anzac holiday periods, this figure suggests that Australian consumers are exercising caution, raising the likelihood of additional interest rate cuts by the Reserve Bank of Australia.
Fed Officials Comment on Monetary Policy
In conjunction with these developments, several Federal Reserve officials weighed in on the current economic conditions. San Francisco Fed President Mary Daly indicated that the monetary policy environment is "in a good place," with expectations for inflation to moderate. She noted the possibility of two rate cuts within the year but acknowledged that businesses are still gauging the implications of Trumps’ policies.
Dallas Fed President Lorie Logan echoed similar sentiments, highlighting the resilience of the labor market and a gradual trend towards the inflation target, without providing specific guidance on rate cuts.
Global Market Reactions
Following the news from the U.S. Treasury, the U.S. dollar saw a mild uptick against major currencies, driven partly by concerns over the stalled trade talks with China. Meanwhile, the Japanese yen benefitted from stronger inflation data, while the Australian dollar faced downward pressure due to disappointing retail figures.
As the financial community continues to assess these developments, stakeholders are closely monitoring the potential for renewed U.S.-China dialogue and the implications for global trade and monetary policy.
This update provides a snapshot of current economic conditions and outlines the influences shaping market dynamics in the Asia-Pacific region. As events unfold, investors and traders are encouraged to stay attentive to future announcements and data releases that could further impact these trends.
Share this article:
