KR VOL continues, Anthropic posts latest AI doom warning, IN CB holds rates

Asia Market Update: KR VOL continues; Anthropic posts latest AI doom warning; IN CB holds rates; JP earnings rise ahead of BOJ; Focus on US May Nonfarm Payrolls.

General trend and developments

-Korean markets again the epicenter of Asian volatility, with the Won falling to 1,550, the lowest in 17 years since the GFC of 2009. Korean equities fell >6%, at worst, triggering trading halts amid reports of foreigners selling >$10B of KR equities this week and local investors said to be 'flocking' to SpaceX IPO's unprecedented private placement set aside for retail investors of ~30% of the float, which at a $75B valuation would pull in around $22.5B of small investor global liquidity. [The giant IPO is likely to dominate market focus next week, perhaps coming as early as Friday, June 12th].

-Anthropic today posted the latest of its periodic doom-warnings about the speed of AI development in a blog on its website today. The company’s latest warning centers around ‘recursive self-improvement’ of agents in the near future able to build and train models without human intervention. The post urges a global coordination mechanism to slow down AI development. [** TTN Note: Previous AI warnings from Anthropic include the “Claude Mythos risk” in April 2026 of its Mythos agentic AI being "too dangerous" to release publicly and creating Project Glasswing to control its release to approved govts and countries. In January 2026 CEO Amodei published an essay on super-human intelligence causing "civilization-level damage" (including weaponization and biological risks) without “rapid intervention.” From August 2025 the company released reports on how its models were being misused by threat actors for large-scale extortion and ransomware. In May 2025 CEO Amodei predicted AI would disrupt 50% of entry-level white-collar jobs within one to five years.

-Critics argue that by lobbying for strict, complex regulations, Anthropic seeks to entrench its market position and elevates its own status among competitors - even as Anthropic itself rushes ahead at high speed in developing its own AI models. Other commentators have noted the stark different between US vs China public attitudes to AI, where the US has an open market of ideas and people can be naturally drawn to stories of doom and gloom, whereas China’s state-controlled media helps contribute to a highly positive public view of AI; around 83-89% in China vs US at only 32-38%. These commentators also point out that any attempt to throttle AI’s development in the US would likely only see the baton of AI development pass to China’s CCP.]

-India Central Bank held rates, as expected, for its 3rd straight pause, amid announcements of an exception for foreign institutional investors from capital gains tax on sale, exchange or transfer of govt securities. The under-pressure Rupee strengthened on the announcement.

-Japan’s April labor earnings saw the first time in over 34 years of wage growth >3% in three consecutive months. April’s total cash earnings of +3.5% y/y marked the fastest growth since December 2024. The rise adds grist to the mill for the market’s 83% pricing of a BOJ 25bps hike on June 16th, which would be the BOJ’s first hike of 2026.

-Japan’s May foreign reserves saw its largest drop on record since 2000 (beginning of the data series) with the official release revealing that Japan’s FX intervention in late April to support the Yen was achieved primarily through the selling of ~$75-80B in foreign securities.

-With Yen still at 160, Japan PM Takaichi said that there are pros and cons to a weak Yen while Japan’s investment will help “maintain trust in the Yen”.

-At time of writing, RBA Dep Gov Hauser was giving one of his favored fireside chats, hot on the heels of Gov Bullock’s testimony yesterday, where she reiterated signs that policy tightening is starting to work, but continues to expect inflation to increase further in the near term.

-Milder inflation out of South-East Asian tigers Thailand and Philippines. Thailand softer (and within central bank target range) on lower diesel and meat prices; While Philippines’ inflation not as bad as feared, with headline CPI for the month of May actually falling against expectations, although Core CPI stubbornly higher than the prior.

-The only Middle East news of note were reports that Oman suspended crude oil loading at Mina Al Fahal terminal following an explosion, possibly caused by a drone attack [time frame uncertain].

-China PBOC set the yuan mid-point at its strongest level since Feb 14th, 2023.

-China Pres Xi confirmed he will visit North Korea between June 8-9th, his first visit there since 2019.

-Data centers continue to be a focus on investor attention as data center builder & operator Switch reportedly in talks to raise "billions" at a valuation of >$50B, with KKR and Brookfield reportedly in discussions.

-US equity FUTs -1.0% to -0.6% during Asia trading.

Looking ahead (Asian-weighted focus, using Asian time zone)

-Fri Jun 5th: (Fri night, US May Nonfarm Payrolls).

Holidays in Asia this week

-Mon Jun 1st: Indonesia, Malaysia, New Zealand, Western Australia & ACT, Thailand.

-Tue Jun 2nd: Malaysia.

-Wed Jun 3rd: Thailand.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens +0.1% at 8,695.

-(AU) RBA Dep Gov Hauser fireside chat has started.

China/Hong Kong

-(CN) Shanghai Composite opens -0.3% at 4,047; (HK) Hang Seng opens -0.3% at 25,186.

-(CN) China PBOC scaled back repos in order to stabilize liquidity [inline] – Chinese press.

-(CN) China President Xi to visit North Korea between June 8th-9th, for the first time since 2019 - Xinhua and KCNA.

-(CN) Banks curb China trips and delay events on cross-border scrutiny - US financial press.

-(CN) China private banks removing long-term deposits [3 and 5-year term deposit products] in order to cut costs - Chinese Security Journal.

-(CN) Follow up: Oversight of China brokers said to be tightened at their trading access units, targeting preferential access given to some clients - China press.

-(CN) China PBOC sets the yuan mid-point at 6.8157 v 6.8203 prior (strongest since Feb 14th, 2023).

-(CN) China PBOC Open Market Operation (OMO): Sells CNY215B in 7-day Reverse Repos; Net injects CNY92B v drains CNY101B prior (Volume of China's reverse repos via market operations turns zero for the first time since November 2020); reduced OMO volume to zero for the first time since 2024.

Japan

-(JP) Nikkei 225 opens -0.6% at 66,744.

-(JP) Japan Apr Labor Cash Earnings Y/Y: 3.5% v 3.1%e.

-(JP) Japan PM Takaichi: Pros and cons to weak Yen; Economic and fiscal policy is not targeted at the currency - Parliamentary Comments.

-(JP) Japan Fin Min Katayama: Direction on sales tax cut hasn't been decided; Exploring many options to fund food sales tax cut.

-(JP) Japan Apr Household Spending Y/Y: -0.5% v -1.5%e.

-(JP) Japan end-May Foreign Reserves: $1.31T v $1.38T prior.

-(JP) Japan May 1-20 Exports Y/Y: +18.0%; Imports +13.6% (provisional).

-(JP) Japan's Trade/Industry Min Akazawa: Japan invest additional ¥150B in Rapidus.

-(JP) Japan PM Takaichi: Pros and cons to weak Yen; Economic and fiscal policy is not targeted at the currency - Parliamentary Comments.

-(JP) Japan Finance Ministry Official: Drop in May foreign reserves largest on record since 2000 (beginning of data series).

-(JP) METI Panel: 2-5 Japan nuclear reactors set to need renewals by 2040s.

-(JP) Japan Apr Preliminary Leading Index CI: 115.9 v 114.5e.

Korea

-(KR) Kospi opens -3.7% at 8,323.

-(KR) South Korea Apr Current Account Balance: $28.3B v $37.3B prior.

-(KR) South Korea Minister says US reaffirms trade deal tariffs – US financial press [update].

-(KR) SPCX South Korea investors said to be 'flocking' to Space X IPO private placement - Infomax.

-(KR) South Korea Fin Min Koo: Will respond if FX volatility increases, inflationary pressure worsens.

-(KR) Korea Exchange activates sidecar to halt KOSPI program selling after -5% fall, trading halted for 5 minutes.

-(KR) South Korea police secure ballot boxes from Seoul polling station after dispersing protestors – Yonhap.

-(KR) South Korea regulator to set up AI-backed insurance fraud prevention system - Yonhap.

-(KR) South Korea President Lee to visit France for the G7 summit - Blue House.

Other Asia

-(IN) India Central Bank (RBI) leaves repurchase rate unchanged at 5.25%; As expected.

-(IN) RBI Gov: Over the past few months, global economy shaped by uncertainty; monetary policy has turned more cautious.

-(ID) Indonesia's Coordinating Economic Ministry: US plans to exempt it from some 301 tariffs - Statement.

-(VN) Russia Dep PM Novak: Ready to set up strategic oil reserve for Vietnam, also discusses LNG supplies [US Market Close].

-(IN) India exempts foreign institutional investors from capital gains tax on sale, exchange or transfer of government securities - Notification.

-(IN) India set to boost biogas prices, subsidies in new program - US financial press.

-(IN) ADE.IN Shares of 16.4M at INR2,913.40/share traded on the NSE in a block, equivalent to 1.27% of the company's shares in issue - Exchange Data.

-(TH) Thailand May CPI M/M: 0.2% v 0.4%e; Y/Y: 2.8% v 3.1%e.

-(PH) Philippines May CPI M/M: -0.5% v +0.6%e; Y/Y: 6.8% v 7.8%e.

-(PH) Philippines Economic Planning Agency: Will continue targeted measures to stabilize prices.

-(SG) Singapore Apr Retail Sales M/M: 0.3% v 3.4% prior; Y/Y: 5.4% v 4.4%e.

-(ID) Follow up: Indonesia issues regulations on export centralization of strategic commodities - Government website.

North America

-(US) Initial Jobless Claims: 225K v 215Ke; Continuing Claims: 1.777M v 1.780Me [US Market Close].

-(US) Q1 Final Nonfarm Productivity: 0.3% v 0.4%e; Unit Labor Costs: 1.8% v 2.4%e [US Market Close].

-(US) ANTHROPIC.IPO*Urges the global economy to form a coordination mechanism to slow down AI development; Warns that AI agents could in the near future become capable enough to build and train models without human intervention, 'recursive self-improvement;' Provides evidence based trends; Lays out possible future scenarios - Blog post (update).

-(US) Fed's Schmid (hawk; non-voter in 2026): Data suggests the economy is doing well; Biggest risk racing economy right now is inflation [US Market Close].

-(US) Fed's Daly (non-voter): Possible that AI is adding to the AI productivity growth, but there could be additional factors; AI gains are not yet seen in data; Generally bullish on productivity and AI, and we can expect this to show up in the data next year and the year after [US Market Close].

-(US) Weekly EIA Natural Gas Inventories: +95 BCF vs. +98-101 BCF [US Market Close].

-(US) Treasury Sec Bessent: Asked Congress to move to eliminate gas tax [US Market Close].

-(US) Agriculture Sec Rollins: There are no additional cases of screwworm found in Texas [US Market Close].

-(US) Pres. Trump lawyers refuse to reveal financial information to the BBC in $10B lawsuit - FT.

-(US) HHS confirms Americans with ‘high-risk’ to Ebola exposures will have access to experimental therapy – US press.

-(US) Data center provider Switch reportedly in talks to raise "billions" at $50B+ valuation - The Information.

-(US) US House Ways and Means Panel: Preparing bills to draw up Crypto tax structure.

-(US) President Trump to attend NBA finals at 08:30pm ET on Monday June 8th, 2026.

Europe

-(UR) Ukraine Pres Zelenskiy sends open letter to Putin, proposing a bilateral meeting to end the war; Ukraine will continue fighting if Putin decides not to stop the war [US Market Close].

-(EU) USTR Greer: US will uphold its tariff caps in trade deals with EU, Japan and others; US consumers and global trade have been resilient [US Market Close].

-(EU) Trade Commissioner Sefcovic: On EU-US trade deal, absolutely crucial for us that at the end of the process we end up well within the Turnberry parameters and for us this is a 15% tariff all inclusive [US Market Close].

-(IE) Ireland May Unemployment Rate: 4.9% v 4.8% prior [US Market Close].

-(IE) Ireland Q1 Preliminary GDP Q/Q: -12.1% v -2.0% prior; Y/Y: -17.1% v -6.0% prior [US Market Close].

-(UK) Bank of England (BOE) Gov Baily: Markets have been orderly but stretched at times [US Market Close].

-(UK) UK PM Spokesperson: Starmer will not walk away from PM job - Responding to Andy Burnham's bid for the post.

-(NO) Norway's Stryke Labor Union: Has agreed wage deal for oil workers, will not go on strike.

-(SE) Sweden May Maklarstatistik Housing Prices: 2.2% v 1.5% prior.

Middle East

-(IR) Pres. Trump: We are right in the middle of my final negotiations to end the War with the Islamic Republic of Iran. [US Market Close].

-(IR) Oman suspends crude oil loading at Mina Al Fahal terminal following explosion [time frame uncertain]- Sources.

-(IR) IAEA quarterly Iran report: Reiterates that it is indispensable and urgent to implement effectively the NPT agreement safeguards in Iran, and that its implementation cannot be suspended [US Market Close].

-(IL) Hezbollah reportedly rejects outcome of Lebanon-Israel direct talks - press [US Market Close].

Levels as of 01:20 ET

Nikkei 225 -1.1%; ASX 200 -0.6%; Hang Seng -1.0%; Shanghai Composite +0.1%; Kospi -4.4%;.

Equity S&P500 Futures -0.6%; Nasdaq100 -1.0%; DAX -0.4%; FTSE100 flat.

EUR 1.1617-1.1610; JPY 160.03-159.90; AUD 0.7142-0.7106; NZD 0.5874-0.5851.

Gold -0.7% at $4,445/oz; BTC -0.9% at $63,315; Crude Oil +0.1% at $93.15/bbl; Copper -1.5% at $6.4308/lbs.