Tech cheer post-micron: IRGC huffs but oil market ignores, massive VE earthquake

Asia Market Update: Tech cheer post-Micron: IRGC huffs but oil market ignores; Massive VE earthquake; Strongly hawkish BOJ Tamura as JP 20-yr auction weak; US May Core PCE tonight.

General trend and developments

-Kospi up as much as +6% while Nikkei moved steadily up throughout the session, +4.3%, with Hynix +10%, Samsung +6%, Tokyo Electron +12% and Kioxia +9% after Micron’s earnings left behind in the rear-view mirror what had been up to that point a difficult session for chip-relateds and AI, as the chipmaker’s Q3 earnings post-close smashed even the lofty expectations as the stock rocketed nearly +16% after-hours. Soaring prices due to the AI memory crunch saw Micron record a doubling of margins and a quadrupling of Revenue y/y, with raised Capex and strong guidance for the next quarter saw the stock shoot up. Nasdaq FUTs +2% after hours on the results.

-As USD keeps rising and oil falling towards pre-war levels Gold fell below the key $4,000/oz mark and Silver as low as $56/oz.

- IRGC Navy continued to rattle cages by declaring that “Safe transit through Strait of Hormuz possible only via routes designated by Iran; Vessels violating transit instructions will face action”. The proclamation was ignored by the oil markets, with WTI crude plumbing new multi-month lows with front WTI FUTs down to touch $69/bbl. Earlier, US Energy Sec Wright said a return to normal oil flows has been delayed a few weeks due to Iranian mines in the Strait of Hormuz but that Iran will not have ability to block Hormuz in the future.

-A massive earthquake of 7.5 mag hit Venezuela, with collapsed buildings and significant damage including in the capital city of Caracas. USGS estimates the death toll could range from 10-100K, which could make it the deadliest land earthquake since Mexico City in 1985 (believed to have killed up to 30-45K). Pres Trump instructed all US govt agencies to assist.

-Japan BOJ Board member Tamura lived up to his reputation as a hawk, repudiating Gov Ueda’s dovish comments overnight that the BOJ needs to wait and see what happens in the Middle East, with Tamura instead saying that the BOJ cannot wait and needs to hike every few months up to what he believes is the neutral rate of ~2%. [**Note:. Tokyo June CPI tomorrow].

-Japan PM Takaichi added some color to the reported plans that Japan was looking to “improve” management of its $1.3T reserves by saying the govt is forming a strategy for Japan to be an '“asset management nation”.

-Japan FTC to ease merger-review rules for M&A in “critical sectors” in Japan.

-Japan’s 20-year JGB auction surprisingly weak, with coverage less than 3X (vs 12-month avg 3.55X) and the tail widening out to 24bps. Japanese bond yields rose slightly afterwards, but still down around 2bps across most of the curve on the day.

-Hotter jobs out of Australia saw muted rection in bonds and the Aussie dollar, which had fallen to as low as 0.69c vs USD overnight, and the ASX which was weak out of the gate was unmoved. Note that the hotter May jobs was balanced out by significant revisions lower in the prior month.

-Prior to the jobs RBA Dep Gov Hauser reiterated overnight that there is still work to do to tame “too high” inflation (speech came after AU CPI for May showed sticky Trimmed Mean inflation, closely watched by the RBA).

-All 32 US banks passed this year's stress tests, collective losses would be at $708B in a severe recession scenario, with capital levels still robust. Goldman Sachs, JPMorgan Citi and others raised dividends in celebration after the test.

-Thailand Central Bank (BOT) left rates unchanged, as expected, in a unanimous vote. Board sees no need to raise the 1.00% rate at this time, citing monetary policy should be accommodative. (Decision comes as Thailand continues to grind out lower GDP numbers than their SE Asian peers (currently 1.5-2.0% expected for 2026).

-Hyundai Motors joined conglomerates such as Samsung and Kakao in reporting looming strike concerns as its second round of mediation talks with its labor union failed.

-China PBOC said it would add more overnight reverse repo instruments, effective from Jun 29/30th next week. Analysts believe that the 7-day RR will remain the key policy rate.

-China’s alternative to SWIFT payments, mBridge digital payments, will not be used by sanctioned nations according to a PBOC official. [Transactions on mBridge have grown to around $55B, primarily using digital Yuan, with founding members including the PBOC, HKMA, Bank of Thailand and the UAE Central Bank].

- In a sign China may finally be taking the issue of zombie company credit risks seriously, the govt is urging domestic rating firms to review AAA scores of issuers in the local bond market due to perceived "glut" in top-tier AAA ratings, following years of record defaults.

-US equity FUTs +0.6% to +1.9% following Micron earnings post-close.

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

-Thu Jun 25th: US May Core PCE.

-Fri Jun 26th: JP Jun Tokyo CPI.

Holidays in Asia this week

-Fri Jun 26th: India.

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens -0.1% at 8,800.

-(AU) Australia May Employment Change: 40.3K v 32.5Ke; Unemployment rate: 4.4% V 4.4%E.

-(AU) RBA’s Hauser: Has work to do to tame "too high" inflation [EU market close].

-(AU) Australia May Household Spending M/M: 1.3% v 0.5%e; Y/Y: 5.5% v 4.3%e.

-(AU) Australia May Job Vacancies Q/Q: -2.1% v 2.7% prior.

-(AU) RBA seeks feedback on payments regulation paper by 7th August, 2026.

-(NZ) Westpac now sees only two RBNZ hikes in 2026, with first hike still to be Sept 2026.

China/Hong Kong

-(CN) Shanghai Composite opens -0.2% at 4,103; (HK) Hang Seng opens -0.1% at 23,389.

-(CN) China's PBOC to add more overnight reverse repo instruments, effective on June 29th/30th, 2026.

-(CN) China urges rating firms to review AAA scores in bond market.

-(CN) China markets a record $5.7B in Euro Sovereign bonds in 5-year, 8-year, and 12-year tenors.

-(CN) China PBOC sets the yuan mid-point at 6.8209 v 6.8195 prior (weakest level since May 28th, 2026).

-(CN) China PBOC Open Market Operation (OMO): Sells CNY371B in 7-day Reverse Repos; Net injects CNY123B v injects CNY242B prior.

Japan

-(JP) Nikkei 225 opens +1.3% at 70,102.

-(JP) Japan PM Takaichi: Reiterates growth-strategy target for ¥370T in combined public/private investment through FY2040 [EU market close].

-(JP) Japan FTC (Fair Trade Commission) set to ease merger-review rules for M&A in “critical sectors” - press [EU market close].

-(JP) Japan BOJ Board member Tamura (hawk; dissenter): Need to raise rate every few months; Neutral rate ~2% - meeting with local leaders in Hyogo.

-(JP) Japan sells ¥700B vs. ¥700B indicated in 20-year JGB bonds; Avg yield: 3.5420% v 3.7110% prior; Bid-to-cover: 2.97x v 4.01x prior (Weakest bid-to-cover ratio since May, 2025).

-(JP) JMA: Earthquake reported in Japan, off Iwate prefecture; Earthquake early warning issued for Japan; Earthquake reported to have hit at 07:30:13 Japan time; Japan quake has initial magnitude of 6.9, depth 50km.

-(JP) BOJ: Japan end-Q1 Household Assets at ¥2,386T v ¥2,195T y/y (+7.1% y/y); Household Assets in Stocks +28.6% - Quarterly Flow of Funds report.

-(JP) Follow up: Japanese nationals detained in China are Fuji Electric staff - Nikkei.

-(JP) Japan Government will call for 'appropriate monetary policy supporting demand' in economic blueprint - draft.

-(JP) Shizuoka Governor set to approve linear project (maglev train) start - Yomiuri.

-(JP) Japan Chief Cab Sec Kihara: Will continue expressing rare-earth concerns to China.

-(JP) Japan releases weekly flows data [period ended Jun 12th]: Foreign buying of Japan equities: ¥479.4B v -¥785.2B prior; Japan buying of foreign bonds: ¥199.7B v ¥382.5B prior.

Korea

-(KR) Kospi opens +2.7% at 8,703.

-(KR) 005380.KR Reportedly Hyundai Motor labor union members in South Korea voted in favor of possible strike - press.

-(KR) Korea Exchange activates sidecar to halt Kospi program buying.

-(KR) South Korea Jun Business Manufacturing Survey: 101.2 v 100.8 prior.

-(KR) Five South Korean ships said to have exited Strait of Hormuz [time frame uncertain] - press.

Other Asia

-(TH) Thailand Central Bank (BOT) leaves benchmark rate unchanged at 1.00%; As expected; Vote was unanimous [EU market close].

-(IN) India Central Bank: Banks should not use any AI/ML model that harms consumer; Must ensure that all models, including third party, are subject to independent validation [EU market close].

-(IN) Follow up: India-US teams concluded talks on trade pact; But no deal yet.

-(MY) Malaysia Econ Min Akmal: Government to continue taking targeted, data-driven measures to protect workers, support businesses - Parliamentary comments.

-(ID) Indonesia approves subsidized mortgage with a 40-year tenure - Detik.

-(TH) Thailand May Customs Trade Balance: -$5.7B v -$5.5Be.

North America

-(VE) USGS: 7.5 mag earthquake strikes in Moron, Venezuela region; Estimates death toll could range from 10,000 to 100,000 according to USGS initial estimates.

-(CO) Colombia Electoral Body confirms De La Espriella as Colombia President.

-(US) Pres. Trump: Cancels today's Housing news conf; Delayed until the passing of Save America Act [US market close].

-(US) May New Home Sales: 580K v 640Ke; Median price: $424.9K v $424.8K prior (0% m/m); Months supply (seasonally adjusted): 10.3 v 9.4 prior m/m [US market close].

-(US) DOE Crude: -6.1M v -4.5Me; Gasoline: +2.1M v -0.5Me; Distillate: +3.1M v -0.5Me [US market close].

-(US) Q1 Current Account Balance: -$226.8B v -$208.9Be [US market close].

-(US) Treasury Sec Bessent: Time to correct trade imbalances; Telling allies, here are the economic rules of the road - CNBC interview [US market close].

-(US) Reportedly Meta and Microsoft are the biggest drivers of an AI-driven surge in long-term data-center lease commitments, with the total boom framed at ~$850B - financial press [US market close].

-(US) MBA Mortgage Applications w/e Jun 19th: 1.0% v -3.8% prior [US market close].

-(US) Treasury $70B 5-year note auction draws 4.200% v 4.182% prior, BTC 2.35 v 2.34 prior and 2.38 over the last 12 auctions [US market close]

-(US) Pres. Trump: The two major earthquakes that just hit the great people of Venezuela are both massive in scale and ...

-(US) Sec of State Rubio to meet with Gulf Cooperation Council (GCC) and Foreign Ministers in Bahrain at 10:15am GMT.

-(US) Pres Trump to meet US House Speaker Johnson at 2pm ET Thursday.

-(US) Pres. Trump: The two major earthquakes that just hit the great people of Venezuela are both massive in scale and ...

-(CA) Canada Defense Minister: Discussed Global Combat Air Programme (GCAP) fighter development program during talks with Japan's Defense Minister.

-(DRC) Democratic Republic of Congo: Number of Ebola case has been raised to 1,118 (prior: 1,094).

-(BR) Brazil Jun FGV Consumer Confidence: 88.7 v 88.8 prior [US market close].

-(VE) Venezuela Interior Minister Cabello: Trujillo, Yaracuy, Carabobo, Miranda, Guaira affected - State TV.

-(CL) Chile Central Bank (BCCh) Jun Minutes: Steady policy was the only option considered.

-(US) Pres. Trump: The two major earthquakes that just hit the great people of Venezuela are both massive in scale and ...

Europe

-(EU) ECB's Schnabel (Germany): Views more hiking as needed to get to 2% inflation; ECB rates are not yet res.trictive; The ceasefire is no reason for the ECB to let our guard down [EU market close].

-(UK) PM Starmer: Reiterates defense investment plan will come before NATO summit [EU market close].

-(UK) UK May vehicle production 49.2K units, +3.2% y/y - SMMT.

-(RU) Local Official: Fuel depot on fire in Russia's Krasnodar region from falling, drone debris - Tass.

-(TR) Trump, asked about selling fighter jets to Turkey, says "we will probably do something".

-(HU) Hungary Jun Business Confidence: -8.4 v -8.8 prior.

Middle East

-(IR) IRGC Navy: Safe transit through Strait of Hormuz possible only via routes designated by Iran.

-(IR) Israel Defense Min Katz: Israel will not withdraw from South Lebanon even if US demands it [EU market close].

-(IR) Pres. Trump: Iran has informed the U.S. that, despite troublemaking Fake News reporting to the contrary, there are “No tolls, no insurance costs, & no other charges of any kind being sought or received by Iran on ships travelling the Strait of Hormuz.” [US market close].

-(IR) Sec of State Rubio: US would not doing anything to undermine the security of Persian Gulf allies [US market close].

-(IR) US Energy Sec Wright: Return to normal oil flows has been delayed a few weeks due to Iranian mines in the Strait of Hormuz; Iran will not have ability to block Hormuz in the future [US market close].

-(IR) NATO Sec Gen Rutte: We need to ramp up patriot missiles production; Currently being discussed.

-(IR) Pres. Trump: Wow! The Senate just changed its vote on Iran from 50-48 against, to 50-47 for. Rand Paul and Bill C...

Levels as of 01:20 ET

Nikkei 225 +4.4%; ASX 200 -0.3%; Hang Seng -1.7%; Shanghai Composite +0.2%; Kospi +6.3%;.

Equity S&P500 Futures +0.5%; Nasdaq100 +1.8%; DAX +0.1%; FTSE100 -0.2%.

EUR 1.1372-1.1348; JPY 161.81-161.57; AUD 0.6908-0.6888; NZD 0.5664-0.5634.

Gold -0.1% at $3,994/oz; BTC -2.0% at $61,675; Crude Oil -1.3% at $69.46/bbl; Copper +0.4% at $6.0055/lbs.