EBC Markets Briefing | Yen flat after new peace hope; AMD shares surged

The yen was unchanged on Thursday on rising hopes that Washington is nearing a deal with Tehran to end the war. The currency rose for the first time in eight sessions on Wednesday.

Japan's exports climbed 14.8% in April, the fastest pace since January on a surge in chip demand. Exports to China and the US were up 15.5% and 9.5% despite higher tariffs and geopolitical tensions.

Economy grew at an annualized 2.1% in Q1, surpassing analysts' expectations. The BOJ has cut its growth forecast for the fiscal year 2026 to 0.5% from 1%, and raised its core inflation outlook to 2.8% from 1.9%.

While a weak yen is boosting exports, it also causes domestic worries by weakening purchasing power. Household spending fell for a 4th consecutive month even as wages continued to grow.

That came despite PM Takaichi rolled out an array of subsidies to soften the blow from inflation, including aid to lower utility fees at the start of the year. Her approval rating remains high in May.

On Monday, Reuters reported that Tokyo was likely to issue fresh debt for an extra budget so as to cushion the economic blow from the Middle East war as the country subsidizes energy bills.

The yen was trading below the 50 SMA, while bullish MACD divergence pointed to a potential reversal. As such we see it breach 158.6 per dollar if a peace deal materialises.

Asset recap

As of market close on 20 May, among EBC major products, AMD shares led gains as CEO Lisa Su forecast explosive adoption of AI over the next five years at an AI conference in Shanghai.

Intuit cut roughly 17% of its workforce, but CEO Sasan Goodarzi said the layoffs were designed to streamline operations and improve execution rather than replace workers with AI.

US crude oil prices fell below $100 per barrel after Trump said talks with Iran are in the final stages. Citibank warned Tuesday that the market is underpricing the risk of a long disruption to oil supplies in Hormuz.

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