Trump Downplays Prospects for US-Iran Deal; Yen Falls Below 160, Raising Intervention Concerns

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Summary:

Trump Downplays Prospects for US-Iran Deal; Yen Falls Below 160, Raising Intervention Concerns Summary: Trump says the US does not need a deal with Iran; the yen has fallen below the 160 level against the dollar, heightening the risk of Japanese authorities intervening in the currency market.

Headlines

1. Trump says the US does not need a deal with Iran, urges Vance to focus on domestic issues.

2. Kushner says multilateral talks on the Russia-Ukraine conflict will take place next week.

3. Iran's Assembly of Experts calls for a review of the country's possible withdrawal from the Treaty on the Non-Proliferation of Nuclear Weapons (NPT).

4. Houthis claim to have carried out strikes on Saudi oil facilities.

5. US House Democratic leader calls for a major transformation in the Middle East, backing a two-state solution for Israel and Palestine.

6. Goolsbee: US inflation is at a dangerous juncture and further deterioration must be prevented.

7. Daly: Further interest rate hikes may be necessary to bring inflation under control.

8. US labor market shows resilience, while October existing home sales hit their lowest level in more than 16 years.

9. Yen falls below 160, raising the risk of Bank of Japan intervention.

Detailed

Trump Says the US Does Not Need a Deal with Iran, Urges Vance to Focus on Domestic Issues

On November 12, US President Donald Trump said Washington did not need to reach a deal with Iran and urged Vice President JD Vance to devote his full attention to domestic issues, including corruption and crime. In a social media post that day, Trump said he had asked Vance to focus entirely on serious corruption and crime in Democrat-led cities and states. He added that the US did not need any agreement with Iran, saying those days were long gone and that Washington controlled hundreds of billions of dollars belonging to Iran, as well as the Strait of Hormuz.

Kushner Says Multilateral Talks on Russia-Ukraine Conflict to Take Place Next Week

On November 12, Trump's son-in-law Jared Kushner said before departing Russia that multilateral talks would take place next week. He noted that everything discussed by US negotiators during their meeting with Russian President Vladimir Putin would have an impact on the upcoming multilateral negotiations. However, he did not specify the exact date, location or participants.

US Special Envoy Steve Witkoff said European countries would participate in the next round of multilateral talks. On November 12, Putin met with visiting US Special Envoy Witkoff and Kushner, Trump's son-in-law.

During the meeting, Witkoff said Trump had asked him to convey to Putin that ending the conflict in Ukraine as soon as possible was of critical importance. Witkoff expressed hope that the meeting with Putin would pave the way for a new round of multilateral talks involving European representatives. Kushner said he hoped the meeting would provide an opportunity to discuss possible pathways to ending the conflict. European countries have also expressed their willingness to participate in negotiations and help bring the conflict to an end.

Iran's Assembly of Experts Calls for Review of Possible Withdrawal from the Nuclear Non-Proliferation Treaty

According to a report by the Islamic Republic of Iran Broadcasting (IRIB) on November 12, Iran's Assembly of Experts issued a statement calling on relevant authorities to consider withdrawing from the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), reassess the country's national defense strategy and develop the necessary deterrence capabilities.

The statement said repeated threats from hostile forces, particularly those targeting Iran's nuclear capabilities, demonstrated that Iran could no longer place its hopes in international institutions responsible for addressing such matters.

It added that if Iran were attacked again, its armed forces would respond swiftly and effectively, without geographical limitations.

Houthis Claim Strikes on Saudi Oil Facilities

Yemen's Houthi movement said in a statement late on November 12, local time, that it had carried out two military operations targeting Saudi oil facilities that day.

The first operation involved a drone strike on Pump Station No. 7 along Saudi Arabia's East-West Pipeline, while the second involved a ballistic missile strike on oil facilities in Yanbu. The Houthis claimed that both operations successfully achieved their objectives.

The statement also described Saudi Arabia's claim that it had intercepted two missiles over Mecca as a serious fabrication. The Houthis denied launching any missiles or drones toward the two holy cities of Mecca and Medina.

US House Democratic Leader Calls for Major Change in the Middle East, Backs Israel-Palestine Two-State Solution

On Thursday, US House Democratic Leader Hakeem Jeffries said he hoped to see a dramatic transformation in the Middle East and reiterated his support for a two-state solution involving Israel and Palestine.

Jeffries, who is widely expected to become Speaker of the House in January next year, said the status quo was unacceptable and that fundamental changes were needed. He explained that this meant ensuring Israel's security and stability while enabling it to coexist as a Jewish democratic state alongside an independent Palestinian state that guarantees the dignity and right to self-determination of the Palestinian people.

Jeffries called for significant changes to the memorandum of understanding governing US assistance to Israel, particularly regarding the West Bank and Gaza. The memorandum provides Israel with $3.8 billion in annual US military assistance and is set to expire in September 2028.

Goolsbee: US Inflation Is at a Dangerous Juncture, Further Deterioration Must Be Prevented

Chicago Fed President Austan Goolsbee said he had initially hoped that US inflation would cool significantly as the impact of tariffs gradually faded and oil prices declined. However, that expectation had yet to materialize.

October CPI came in above expectations, marking a second consecutive monthly increase. Goolsbee described the US inflation outlook as being at a "dangerous juncture" and said policymakers should remain cautious to prevent inflation from worsening further.

Goolsbee noted that persistent price pressures remained in areas such as services and healthcare within the CPI basket, and that these pressures were unrelated to tariffs or oil prices. He said the US was gradually entering a phase in which central banks historically had difficulty bringing inflation under control.

He added that the Federal Reserve was trying to distinguish between two factors keeping inflation elevated: supply-side shocks, such as tariffs and oil prices remaining high for longer than expected, and demand-side overheating driven by large-scale data center construction.

Goolsbee said AI-related inflation had not yet spread across the broader economy and remained concentrated mainly in AI, technology and related industries. However, the Fed was closely monitoring whether these pressures would spill over into other sectors. If demand overheating caused by data center construction began to affect the broader economy, it would become a concern.

He also noted that recently elected Democratic governors had proposed suspending data center construction, but said these proposals currently had no direct bearing on the Federal Reserve's efforts to address inflation.

Daly: Further Interest Rate Hikes May Be Necessary to Bring Inflation Under Control

San Francisco Fed President Mary Daly said on Thursday that further monetary policy tightening might be necessary to bring inflation down, as price pressures remained persistent and were not confined to industries directly affected by tariffs or oil prices.

She said a growing number of businesses had told her they planned to pass higher input costs on to consumers, while their willingness to raise prices was increasing.

Daly said she supported the Fed's September rate hike and its decision to hold rates steady in October.

On AI, Daly said investment in AI infrastructure was undoubtedly pushing up prices in certain areas. However, its impact on overall inflation remained modest, with cost increases limited in scale and not yet spreading to other sectors.

She believed that overall inflation was currently being driven mainly by other factors rather than AI-related goods. While she remained optimistic about AI's long-term potential to accelerate productivity growth, she said it was too early to determine when those gains would materialize.

Daly is not a voting member of the Federal Open Market Committee (FOMC) this year.

US Labor Market Shows Resilience, October Existing Home Sales Hit Lowest Level in More Than 16 Years

US initial jobless claims rose more than expected last week but remained at a level consistent with a stable labor market, allowing the Federal Reserve to keep its focus on combating inflation.

The US Department of Labor reported that initial claims for state unemployment benefits increased by 9,000 to a seasonally adjusted 200,000 in the week ended November 7. Economists had previously expected 195,000 claims.

In a separate report, the National Association of Realtors (NAR) said existing home sales fell sharply by 5.5% in October to a seasonally adjusted annual rate of 3.75 million units, the lowest level since August 2010.

Yen Falls Below 160, Raising the Risk of Bank of Japan Intervention

The yen weakened past the 160 level against the US dollar for the first time since September, marking its third consecutive trading session of losses.

Rising US Treasury yields and growing expectations of further Federal Reserve rate hikes have strengthened the dollar. The interest rate differential between the US and Japan has widened to more than 250 basis points, adding to downward pressure on the yen.

Atsushi Mimura, Japan's vice finance minister for international affairs, said on Thursday that recent yen movements had been excessively rapid and referred to previous foreign exchange interventions. Japanese Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent had also previously signaled that intervention could be considered again if necessary.

Earlier, the dollar briefly plunged more than 70 pips against the yen to 159.30, triggering speculation that Japanese authorities had intervened in the currency market. It has since recovered to 159.72.

Japan intervened in the foreign exchange market three times over the summer, deploying a total of 15.4 trillion yen (approximately $96.4 billion).

Today's Economic Calendar

15:00 (UTC+8) ECB Governing Council Member Simkus and Executive Board Member Schnabel speak.

16:30 (UTC+8) ECB Governing Council Member Zygimantas Vaiciunas speaks.

17:00 (UTC+8) International Energy Agency (IEA) releases its monthly Oil Market Report.

21:30 (UTC+8) Canada September Wholesale Sales MoM.

21:30 (UTC+8) US October PPI YoY.

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