Asia market update: Asian equities generally gain; AU events in focus for Wed [monthly CPI and RBA’s Kent].

General Trend

- USD/JPY remains below ¥160.

- Japan Gotobi day in focus [refers to the 5th day of the month and dates that are multiples of 5; accounts are generally settled on Gotobi days].

- Japan banks rise amid higher JGB yields.

- Energy and REIT indices outperform in Australia.

- China Premier Li Qiang: confident of achieving GDP growth target of ~5.0%; Domestic economy expected to continue to show steady improvement in Q2.

- US data releases include Consumer Confidence.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.3% at 7,754.

- Australia Jun Westpac Consumer Confidence: 83.6 v 82.2 prior.

- Australia sells A$100M v A$100M indicated in 0.25% Nov 2032 Indexed Bonds: Avg Yield 1.8195%: bid-to-cover: 4.60x.

- New Zealand Treasury: Economy may be underperforming expectations, recent economic indicators on the 'weak' side.

- RBNZ: Cut foreign currency intervention capacity in May to NZ$20.2B v NZ$21.0B m/mChina/Hong Kong.

- Hang Seng opens +0.3% at 18,088.

- Shanghai Composite opens flat at 2,962.

- Biden Administration [US Commerce Dept] is probing big China telecom companies [China Telecom, China Mobile and China Unicom] – financial press.

- (US) Treasury Sec Yellen: China investment limits could be finalized by end of 2024.

- China Pres Xi: China will step up tech R&D in response to bottlenecks, constraints in areas that include integrated circuits, industrial motherboards, basic software, advanced materials, and scientific research instruments.

- China reportedly considering perks for German carmakers in attempt to stop EU's tariffs on Chinese EVs - press.

- China NDRC (state planner): Urging local govts to loosen car purchase restrictions and add additional purchase quota.

- Bank of China's Russian arm reportedly suspends operations with sanctioned Russian banks; Now focuses on facilitating Chinese yuan (CNY) payments between Russia and China will continue working with non-sanctioned banks - Russian press.

- China PBOC sets Yuan reference rate: 7.1225 v 7.1201 prior (weakest CNY fix since Nov 22nd, 2023).

- China PBOC Open Market Operation (OMO): Sells CNY300B in 7-day reverse repos; Net injects CNY214B.

- China Premier Li Qiang: Should face up to the difficulty of global economic growth, needs new sources of growth drivers; confident of achieving GDP growth target of ~5.0%; Domestic economy expected to continue to show steady improvement in Q2.


-Nikkei 225 opens +0.1% at 38,833.

- Japan sells ¥1.0T VS. ¥1.0T indicated in 20-year JGB bonds; AVG yield: 1.8430% V 1.7340% prior; bid-to-cover: 3.27x V 3.65X prior; Tail: 7bps v 11bps prior.

- Japan May PPI services Y/Y: 2.5% V 3.0%E.

-Japan May BoJ Core CPI Y/Y: 2.1% v 1.9%e; Weighted Median CPI Y/Y: 1.3% v 1.1% prior [**Note: BOJ has a 2.0% inflation target].

-Japan Cabinet: To revise Jan-Mar GDP to reflect corrected data on construction orders; the revised data will be released on Jun 30th at 23:50 GMT.

-Moody's: Unlikely take negative rating action on Japan even if the Japan govt fails to meet its primary budget-balancing target next fiscal year; Do not expect the FY25 budget target to be met.

-Japan Chief Cabinet Sec Hayashi: Reiterates excessive FX volatility is not desirable.

-Japan to license satellite phone communications system - Nikkei.

-Japan to allow utilities to recoup ‘unexpected’ nuclear costs – Japanese press.

- Majority of Japan CEOs support building new reactors – Nikkei poll.

- Follow Up: Japan might announce ¥3.5/kWh electricity subsidy for households – Japanese press.

- Seeing USD/JPY moved lower over ~70 pips below 159.00 and then bounce back to ~159.25 amid potential new FX intervention worries [NY morning on Monday].


- Kospi opens flat at 2,765.

- South Korea Jun Consumer Confidence: 100.9 v 98.4 prior.

North America

- Spirit Aerosystems [SPR]: Boeing said to propose using stock to acquire the co.; the M&A talks said to have ‘last-minute twist’; transaction said to value Spirit at ~$35/share - WSJ.


- Airbus [AIR.FR]: Cuts FY24 EBIT ~€5.5B (prior: €6.5-7.0B), FCF €3.5B (prior: €4.0B) deliveries 770 (prior: 800), cites supply chain issues.

Levels as of 01:20 ET

- Nikkei 225, +0.8%, ASX 200 +1.1% , Hang Seng +0.5%; Shanghai Composite flat ; Kospi +0.4%.

- Equity S&P500 Futures: +0.1%; Nasdaq100 +0.3%, Dax +0.1%; FTSE100 +0.1%.

- EUR 1.0743-1.0730 ; JPY 159.70-159.18 ; AUD 0.6664-0.6650 ;NZD 0.6130-0.6111.

- Gold -0.2% at $2,340/oz; Crude Oil +0.1% at $81.68/brl; Copper +0.4% at $4.4407/lb.

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