Daily Commentary

MarketMinder’s View: Citing an excessively weak yen (versus the dollar, chiefly), Japanese officials have conducted several days’ worth of interventions in currency markets, buying up yen and selling other reserve assets like dollars in an effort to prop it up. The government aims to do so to limit the weak yen’s potentially inflationary impact on import costs, particularly for energy. This article notes IMF rules allow governments to intervene three times in six months and still qualify as having a “free-floating currency,” so the fact the present multiday effort is tabulated as one move gives them some leeway to intervene again later. But here is the thing: Unilateral yentervention like this has a spotty record of success. Look at the four-year graph included. Both prior interventions since the pandemic needed two rounds to have “success,” which likely came as a result of broader market conditions and not the intervention itself. In 2022, for example, the yen began strengthening in October … as the dollar weakened against a basket of currencies. Ditto in 2024. Sure, the yen may play a role in that. But it is only 5.2% of the broad currency basket (source: Federal Reserve). It didn’t sway the whole basket. People make a lot out of currency interventions, but unless they are coordinated and global, they rarely have much identifiable and lasting effect. They are noise more than news for markets.

MarketMinder’s View: The Institute for Supply Management’s Services purchasing managers’ index—a survey-based gauge of business leaders that aims to estimate the breadth of growth across the US’s chief economic sector—ticked down from 54.0 in March to 53.6 in April. Now, readings above 50 indicate more companies reported growth than contraction, so this downtick really isn’t very significant. But this article spends more time on the -7.1 point drop in the “new order” gauge. And yes, the 53.5 read is a notable cooling from March’s 60.6. But here again, this is still an expansionary read and some volatility is typical. Finally, the other area where this coverage focuses is prices paid, which was at 70.7—meaning a large majority of firms saw rising costs. But this is a breadth gauge. So is that surprising? We think not, considering oil and gas prices’ rise is so, so, so widely known. It doesn’t really tell you where things are heading … or even how much prices rose.

MarketMinder’s View: This is all backward looking, but it is perhaps notable that trade-and-finance hub Hong Kong posted bonzer GDP growth in Q1. “Advance data, marking the first economic print since the war broke out, showed that the city’s gross domestic product rose 5.9% in January-March period from a year earlier. On a quarterly basis, the economy expanded 2.9%, accelerating from the final quarter of 2025, when a rebound in consumption and investment cemented an economic turnaround, aided by a stock market rally and global demand for exports.” This, despite the fact the city is reliant on imported energy and the war covers a slice of this timeframe. It all speaks to the global economy proving more resilient than feared, which underpins the global rally since late March.