News

NBC with the report citing Republican senators:

• Republicans shouldn’t back away from looking at potential changes to Medicare
• exploring ideas to slash “waste, fraud and abuse” in Medicare, several senators
• they’re open to looking at other programs, too

Sen. Kevin Cramer, R-N.D., said they shouldn’t be afraid of cutting waste in Medicare

• “Why don’t we go after that? I think we should”

More at that link.

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan finance minister Kato

• says monetary policy up to BOJ, when asked about US Treasury report on Japan

Earlier:

• US Treasury says no other country manipulates their own currency

In the report the U.S. Treasury Department urged the Bank of Japan to stay the course on monetary tightening, arguing that doing so would help correct the yen’s prolonged weakness and contribute to a more balanced trade relationship between the two countries.

In its exchange-rate report to Congress, the Treasury said the BOJ’s policy decisions should be driven by Japan’s domestic economic conditions, including growth and inflation trends. A continued tightening path, it noted, would support a healthier exchange rate and facilitate needed structural adjustments in trade flows.
The report also cautioned against using state-run investment funds—such as public pension schemes—as tools to influence the yen’s value. Instead, the Treasury emphasized that these vehicles should focus on risk-adjusted returns and portfolio diversification, not currency competitiveness.

This article was written by Eamonn Sheridan at www.forexlive.com.

People’s Bank of China USD/CNY reference rate is due around 0115 GMT.

The People’s Bank of China (PBOC), China’s central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a “band,” around a central reference rate, or “midpoint.” It’s currently at +/- 2%.

How the process works:

• Daily midpoint setting: Each morning, the PBOC sets a midpoint for the yuan against a basket of currencies, primarily the US dollar. The central bank takes into account factors such as market supply and demand, economic indicators, and international currency market fluctuations. The midpoint serves as a reference point for that day’s trading.
• The trading band: The PBOC allows the yuan to move within a specified range around the midpoint. The trading band is set at +/- 2%, meaning the yuan could appreciate or depreciate by a maximum of 2% from the midpoint during a single trading day. This range is subject to change by the PBOC based on economic conditions and policy objectives.
• Intervention: If the yuan’s value approaches the limit of the trading band or experiences excessive volatility, the PBOC may intervene in the foreign exchange market by buying or selling the yuan to stabilize its value. This helps maintain a controlled and gradual adjustment of the currency’s value.

Something is afoot at the Bank:

• What is the People’s Bank of China planning?

This article was written by Eamonn Sheridan at www.forexlive.com.

Tariff negotiations between the U.S. and Japan are being complicated by the involvement of three senior American officials who hold conflicting views on trade, according to sources close to the talks. The differing approaches of Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamiesol Greer have created confusion and made it difficult for Japanese negotiators to gauge the Trump administration’s true position.

Tensions among the U.S. team have at times spilled into the open. One source said that at a recent meeting, the three cabinet members paused discussions with their Japanese counterparts to argue among themselves, further highlighting the internal discord shaping the negotiations.

–

Info via Japanese media

Earlier on these talks:

• Is Japan about to do it own tariff taco? Ishiba to ease demand for US auto tariff repeal?

This article was written by Eamonn Sheridan at www.forexlive.com.