Asian markets trade higher as the Bank of Japan leaves interest rates unchanged, in line with expectations

Reva Goujon, director of Rhodium Group, discusses what may be on the agenda ahead of US Secretary of State Antony Blinken’s visit to Beijing and says “expectations are low”.

Japan’s central bank maintained its extremely loose monetary policy on Friday, choosing to support fragile economic growth at a time of swirling global uncertainty.

The Bank of Japan kept its short-term interest rate target at -0.1% and made no changes to its yield curve management policy, in line with economists’ expectations.

The Japanese yen fell after the decision, falling as much as 0.3% to around 140.70 per US dollar before losses. The Nikkei 225 reversed similar earlier losses to creep higher.

— Clement Tan

Carl Vine of Japan’s M&G Investments says consumers are more willing to accept price increases and companies are much more proactive in thinking about pricing mechanisms.

More countries are reducing their reliance on China, and India may be the next best option for nations looking to relocate their manufacturing operations, said Matthew Culley, portfolio manager at Janus Henderson Investors.

“The long-term outlook for India is clearly positive, and it is the only country blessed with the demographics to rival China on the global stage,” Culley told CNBC’s Squawk Box Asia on Friday.

India is therefore a “fantastic place” for countries looking to move away from China because of its strong economic background and cheap labor, he added.

Culley highlighted that the South Asian nation is now starting to see “green shoots of private sector capital”, and banks will also play a central role.

“There’s a ton of infrastructure that needs to be done, because it’s not just about building a manufacturing facility … you really need the whole supply chain to be replicated for it to be successful.”

— Charmaine Jacob

New Zealand’s factory activity remained in contraction territory for the third consecutive month, with the country’s purchasing managers’ index at 48.9 in May.

That’s slightly above April’s reading of 48.8, but the ninth consecutive month New Zealand’s PMI has been printed below its long-term norm of 53.

The reading comes a day after the country entered a technical recession, after seeing first-quarter GDP contract 0.1% year-on-year.

A PMI reading above 50 indicates expansion, while a reading below 50 indicates contraction.

Government data showed the textiles and clothing sector had the largest decline with a PMI of 41, followed by the metal products sector at 42.5.

– Lim Hui Jie

Hong Kong’s producer price index rose 1% in the first quarter compared with a year ago, a sharp reversal from the 0.4% fall recorded in the fourth quarter of 2022.

The city’s Census Bureau elaborated that the highest increases in producer prices were mainly recorded in paper products, which saw a 3.7% increase year-on-year.

Other sectors that saw increases included the food, beverage and tobacco industries, as well as the metals and electronics industries.

In the same period, the textile and clothing industry experienced a marginal fall in producer prices, with a decrease of 0.1% year-on-year.

– Lim Hui Jie

Singapore’s non-oil domestic exports fell 14.7% year-on-year in May, a bigger drop than the 9.8% drop in April and more than the 8.1% drop expected by economists polled by Reuters.

The May figures also mean that Singapore’s non-oil domestic exports have fallen for eight consecutive months. On a month-on-month seasonally adjusted basis, domestic non-oil exports fell 14.6%, sharply higher than the 1.3% decline forecast.

Government data showed that both electronics and non-electronics exports declined, with exports to Hong Kong, Malaysia and Taiwan leading the decline. In contrast, exports to the USA and China increased.

Singapore’s total trade fell 17.9% year-on-year in May, following the 18.9% decline in the previous month.

Total exports fell by 15.2%, somewhat less than April’s decline of 18.1%. Meanwhile, total imports fell 20.7%, extending the previous month’s 19.7% decline.

– Lim Hui Jie

Swiss investment bank UBS expects shares of a major global airline to rise 50% in the next year

The airline’s shares are already up 50% this year as it plans to grow by nearly three times by 2030.

CNBC Pro subscribers can read more here.

– Ganesh Rao

The S&P 500 has further upside heading into next year, Fundstrat’s Tom Lee predicts, as he gives his S&P 500 target for 2024.

“Our view is that you want to be risk this year,” he added, citing stocks to buy.

CNBC Pro subscribers can read more here.

— Weizhen Tan

The Dow and S&P 500 are running circles around historical June averages about halfway through the month, according to data from the Stock Trader’s Almanac.

In a typical June, the Dow has declined 0.2% on average. But so far this month, the 30-stock average is up 4.4%. It also puts it ahead of the overall average, with a typical month showing a relatively modest 0.7% advance.

Similarly, the S&P 500 has gained 5.5% this month, blowing past its historical June average of just 0.1%. When averaging the historical performance of all months of the S&P 500, the index typically adds 0.7%.

That achievement means both have defied conventional wisdom, with June historically being a weak month. On average, it has produced the second-worst historical performance for the Dow and fourth-worst for the S&P 500.

– Alex Harring

The US dollar hit a high not seen since November against the yen.

The dollar reached 141.50 against the yen. It is the highest level since November 23, 2022, when it reached 141.61.

Meanwhile, the dollar index was negative as the euro hit a high against the dollar not seen in nearly a month. The euro hit 108.78 against the dollar, its highest since May 16 when it hit 1.0904.

—Alex Harring, Gina Francolla

On Thursday morning, a number of economic data were published. Here are the results against Dow Jones consensus estimates:

• Weekly unemployment claims: 262,000 vs. 245,000 Dow Jones estimate. Continued claims 1.757 million against 1.79 million (fact set).
• Retail sales May: 0.3% vs. -0.2% estimate; ex-auto 0.1% vs. flat estimate.
• Import prices May: -0.6% vs. -0.5% estimate.
• Empire State Manufacturing June: 6.6 vs. -16 estimate.
• Philadelphia Fed Manufacturing June: -13.7 vs. -14.8 estimate.

-Jeff Cox