- U.S. reciprocal tariffs announced in April 2025 sparked sharp FX volatility in Japan.
- BIS Triennial Survey (April 2025) shows structural shifts in Japan's FX market by instrument, currency, and counterparty.
- Turnover drivers in Japan's FX market differ from other Asian markets, indicating a unique counterparty mix.
May 22, 2026
▼ 3– 8
Markets 1
Macro/Economy 5
- University of Michigan consumer sentiment index fell to 44.8 in May, below April's 49.8 and near June 2022 trough
- 1-year inflation expectations rose to 4.8% from 4.7% as oil supply risks from Strait of Hormuz persist
- Fed signals reluctance to cut rates amid rising inflation expectations and 10Y/30Y Treasury yields at multi-year highs
- Linkage between wage growth expectations and price inflation expectations has strengthened in recent years.
- Stronger linkage correlates with tighter labor markets, higher labor mobility, higher incomes, and union membership.
- Households with a stronger wage‑inflation link keep higher spending intent even as prices rise, limiting real‑income declines.
- BOJ will publish real export and import figures one business day after the Ministry of Finance's provisional trade stats, at 4:00 p.m. from April 2026
- Data are seasonally adjusted and may be revised retroactively due to base‑year changes or statistical updates
- Methodology notes and revision history are provided, with the latest change noted on May 20, 2026
- Exports are broken down by region and goods, enabling multi‑faceted analysis of Japan's trade
- Flood exposure raises banks' non‑performing loan and credit‑cost ratios while lowering ROA, though changes are modest versus averages
- Banks expand credit supply in flood‑affected regions, reflecting heightened reconstruction demand
- Banks with high real‑estate loan shares or in areas with sharp land‑price declines see larger performance drops and weaker credit expansion
- Land prices in inundated areas declined about 10% five years after the 2019 Typhoon Hagibis.
- Non‑inundated parcels within 100 m of the flood boundary experienced a 5% price drop, with effects disappearing beyond 800 m.
- Price declines were larger outside official hazard zones, showing spillover effects beyond designated risk areas.
- The authors attribute the declines to delayed risk perception, distance‑decay of flood risk, and pre‑flood incorporation of risk in hazard zones.
Central Banks 3
- Kevin Warsh officially sworn in as Fed chairman and Board of Governors member on May 22, 2026
- FOMC unanimously selected Warsh as its chairman, succeeding prior leadership
- Warsh's term as chairman runs until May 21, 2030; Board member term until January 31, 2040
- Fed Governor Christopher Waller now supports holding rates steady due to rising inflation concerns
- Higher energy prices may have a lasting effect on inflation, contradicting earlier views
- Waller requires improvement in inflation or a significant labor market deterioration before considering rate cuts
- Lists coins reserved for circulation and bonds issued by real estate investment corporations
- Details holdings in index‑linked ETFs and equity of real estate investment corporations via trust banks
- Shows foreign currency deposits at foreign central banks, BIS, and foreign government securities
- Describes deposits held by agents for treasury operations and loans under special U.S. dollar lending rules
Energy/Oil 1
- Nationwide average regular gasoline price hit $4.49/gal on May 18, up 42% ($1.32) from a year ago.
- West Coast prices averaged $5.61/gal, the highest among regions, while Gulf Coast remained lowest at $3.95/gal.
- Midwest and Rocky Mountain regions saw price spikes to $4.40/gal and $4.59/gal, up 45% and 47% year‑over‑year, amid refinery maintenance outages.
- Crude oil price pressure stems from a de‑facto closure of the Strait of Hormuz and U.S. SPR releases.
- AAA expects 39.1 million travelers by car over Memorial Day weekend, sustaining demand for gasoline.
Companies 1
- FDIC and Fed reviewed 2025 living wills from 8 largest US banks and 56 foreign banks
- No shortcomings or deficiencies identified in any submission
- Derivatives weaknesses from 2023 plans at BofA, Goldman, JPMorgan, and Citi resolved
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