Core Viewpoint - The Bank of Japan is likely to announce a significant slowdown in its government bond purchase tapering pace at the upcoming monetary policy meeting, as inflation continues to rise above the 2% target, leading to increased selling pressure on Japanese government bonds [1][2]. Group 1: Bond Purchase Tapering - Since last summer, the Bank of Japan has reduced its monthly bond purchases by up to 400 billion yen (approximately 2.8 billion USD) each quarter [1]. - The former Bank of Japan executive suggests that the tapering pace may slow to about 200 billion yen per quarter, which is half of the current pace [2]. - The current plan aims to reduce monthly bond purchases to 2.9 trillion yen by early next year, potentially further decreasing to around 2 trillion yen a year later, which aligns with pre-2013 levels [2]. Group 2: Market Reactions and Expectations - The market is focused on whether the Bank of Japan will maintain its current tapering pace into the fiscal year 2026, which begins in April 2026 [1]. - If the Bank of Japan signals a slowdown in tapering, it may alleviate the ongoing concerns about a potential market crash triggered by the selling of Japanese government bonds [1]. - The market anticipates that the Bank of Japan will keep the benchmark interest rate unchanged at 0.5% during the upcoming meeting [3]. Group 3: Economic Indicators and Future Actions - Japan's core inflation has remained at or above the 2% target for three consecutive years, indicating a strong inflationary trend [5]. - The next interest rate hike is expected to occur in the fall, contingent on external economic factors, including U.S. trade policies [3][5]. - The Bank of Japan is advised to proceed cautiously with policy normalization to avoid falling behind economic developments while managing uncertainties in the global market [5].

Currency Market Overview - The Euro is trading cautiously against the US Dollar, slightly above the key level of 1.1400 [1] - The British Pound has retreated to around 1.3550 due to a rise in the US Dollar [1] - The Japanese Yen remains under selling pressure, with the USD/JPY maintaining above the 143.00 mark [1] - The Australian Dollar has lost upward momentum after falling below 0.6500, influenced by mixed trade balance data and a decline in China's Caixin Services PMI [1] - The New Zealand Dollar has extended gains for the second consecutive day, trading around 0.6030 [1] - The USD/CAD continues a bearish consolidation trend, currently trading in the 1.3670-1.3665 range [1] Key Economic Indicators - The US ADP employment figures were significantly below expectations, marking the lowest level since March 2023 [2] - US President Trump and the Director of the Federal Housing Finance Agency have called for an immediate interest rate cut by Fed Chair Powell [2] - The US Senate has confirmed Michelle Bowman as the Vice Chair for Supervision at the Federal Reserve [2] - The Federal Reserve's Kashkari noted that the bond and stock markets are sending contrasting signals [2] - The Fed's Beige Book reported slight declines in economic activity across six regions, with businesses expecting future cost increases [2] Non-US Major Currencies - Sources indicate that the Bank of Japan is considering slowing down its bond purchase reduction next year [3] - Australian household spending indicators showed only slight growth, reinforcing expectations for interest rate cuts [4] - The Bank of Canada has maintained its interest rate, with the Canadian Dollar reaching a new high for 2025, while the swap market anticipates a 46% probability of a rate cut in July [5] - The subscription ratio for Japan's 30-year government bond auction was 2.92, down from 3.07 in the previous auction [6] - The UK Office for National Statistics reported that errors in vehicle tax data led to a 10 basis point overestimation of inflation rates as of April [7] Other Economic Insights - The Bangko Sentral ng Pilipinas will continue to adopt a cautious approach in deciding on further monetary policy easing [8] - The IMF's First Deputy Managing Director stated that the impact of trade wars on emerging markets is more severe than during the pandemic [9] - Japanese media reported that the US has shown flexibility in reducing additional counterpart tariffs on Japan [10] - Sweden's core inflation has dropped to a five-month low, increasing expectations for interest rate cuts in June [11] - The National Bank of Kazakhstan plans to sell 3.3-3.6 trillion tenge by 2025 to reflect gold purchase volumes [12] Technical Analysis - The EUR/USD remains above its 200-day simple moving average (SMA) of 1.0817, indicating a sustained upward trend [13] - Key resistance levels for EUR/USD are at 1.1572, 1.1600, and 1.1692, while short-term support is at 1.1192 [13] - The GBP/USD is stable above its upward trend line, with initial resistance at 1.3550 and support levels at 1.3500, 1.3430, and 1.3380 [14] - For AUD/USD, a breakout above the 2025 high of 0.6537 could target the 2024 high of 0.6942, with initial support at 0.6356 [14] Upcoming Economic Data - The European Central Bank will announce its interest rate decision at 20:15 [14] - The US trade balance for April and initial jobless claims for the week ending May 31 will be released at 20:30 [14] - ECB President Lagarde will hold a press conference at 20:45 [14] - The US Global Supply Chain Pressure Index for May will be published at 22:00 [14] - EIA natural gas inventory data for the week ending May 30 will be available at 22:30 [14] - Federal Reserve officials will be speaking on economic outlook and banking policies in the early hours of the next day [14]

Core Viewpoint - The Bank of Japan is considering slowing down the pace of its bond purchase reduction next year [1] Group 1 - The potential change in the Bank of Japan's bond purchasing strategy may impact the financial markets and investor sentiment [1] - A slower reduction in bond purchases could indicate a more cautious approach to monetary policy amid economic conditions [1]

Core Viewpoint - The Bank of Japan is considering slowing down its bond reduction pace next year [1] Group 1 - The potential change in the Bank of Japan's monetary policy could impact the bond market significantly [1] - Investors are closely monitoring the central bank's decisions as they may influence interest rates and economic growth [1]

Core Viewpoint - The Bank of Japan is considering slowing down its bond reduction pace next year, indicating a potential shift in monetary policy strategy [1] Group 1: Monetary Policy Implications - The potential change in the Bank of Japan's approach to bond reduction could impact interest rates and market liquidity [1] - A slower pace of bond reduction may signal a more cautious stance on economic recovery and inflation management [1] Group 2: Market Reactions - Financial markets may react to the news with increased volatility as investors adjust their expectations regarding future monetary policy [1] - The decision could influence investor sentiment and strategies in both domestic and international markets [1]

Group 1 - The Bank of Japan is reportedly considering slowing down its bond reduction pace next year [1]