Ueda vows to proceed cautiously on inflation

Asia market update: Ueda vows to proceed cautiously on inflation; China amassed its largest-ever chip investment fund; South Korea-Japan-China trilateral summit.

General trend

- Quiet session ahead of UK, US holidays.

- China, Japan and South Korea leaders vow to make progress on joint free trade agreement (FTA) in their first trilateral summit since 2019.

- BOJ's Gov Ueda and Dep Gov Uchida's speech focused on inflation fight dynamics.

- Japan top currency diplomat Kanda tld G7 speculative, excessive FX moves undesirable so needs to be monitored.

- G7 reaffirmed its long-held commitment on currencies.

- US equity FUTs ‘slightly down during Asian trading.

Looking ahead (Asian time zone)

- Tues May 28th AU Retail Sales, (Tue eve DE Biz Climate).

- Wed May 29th AU Apr CPI, JP May Consumer Conf, NZ May Biz Conf (Wed eve DE Jun Consumer Conf, DE May CPI, Wed night Fed Beige Book).

- Thu May 30th AU Apr Building Permits, NZ 2024 Budget, (Thu night US Q1 GDP 2nd est. + May 25th initial jobless).

- Fri May 31st JP Tokyo May CPI, Apr Ind Prod + Retail Sales, CN NBS May PMIs, (Fri eve EU May flash CPI, Fri night IN Q1 GDP, US Apr PCE, CA Q1 GDP).

Holidays in Asia this week

- Thursday May 30th Malaysia.

- Friday May 31st Malaysia.

Headlines/economic data

- (CN) China Jan-Apr Industrial Profits YTD Y/Y: 4.3% v 4.3% prior.

- (JP) Japan Mar Final Leading Index CI: 112.2 v 111.4 prelim; Coincident Index: 113.6 v 113.9 prelim.

Australia/New Zealand

- ASX 200 opens +0.20% at 7,741.

China/Hong Kong

- Hang Seng opens flat at 18,606; Shanghai Composite opens +0.2% at 3,094.

- China Premier Li Qiang, South Korean President Yoon Suk Yeol, and Japanese Prime Minister Fumio Kishida will adopt a joint statement on six areas including the economy and trade.

Japan

- Nikkei 225 opens +0.3% at 38,766.

- Japan top currency diplomat Kanda: Told G7 speculative, excessive FX moves undesirable so needs to be monitored.

- Japan Fin Min Suzuki: Rise in Japan's long-term interest rates will likely weigh on Japan's fiscal state [weekend update].

- Ex-BOJ board member Masai: Believe BOJ could have one or two hikes, ending up at like 0.5% or so.

South Korea

- Kospi opens +0.4% at 2,697.

North America

- META and Elon Musks' xAI reportedly competing to partner with chatbot maker Character.AI - FT [weekend update].

- (US) Treasury Sec Yellen: Sees no showstoppers in talks with G7 counterparts on loan for Ukraine backed by earnings from frozen Russian assets – Interview [weekend update].

- (US) Fed's Waller (voter, hawk): Factors that lowered neutral rate may reverse in the future [weekend update].

- (US) May final university of Michigan confidence: 69.1 V 67.7E [weekend update].

- (US) APR preliminary Durable Goods orders: +0.7% V -0.8%E; Durable (ex-transportation): 0.4% V 0.1%E [weekend update].

Europe

- Reportedly some Baltic countries think that insufficient Western support for Ukraine could lead to a breakthrough by Russian troops. In this case, the Baltic countries and Poland would consider sending their troops to Ukraine - German press.

- Anglo-American (AAL.UK) Blackrock reportedly pushed Co to extend talks with BHP - FT [weekend update].

- G7 Fin Mins draft statement: Making progress on considering ways to use profits from frozen Russian assets to help Ukraine, and will present options at leaders' summit in June [weekend update].

- ECB's Panetta (Italy): World economy is showing resilience in the face of monetary tightening; The risks to financial stability have diminished [weekend update].

- ECB's Muller (Estonia, hawk): ECB must stay cautious as prices can surprise to upside [weekend update].

Levels as of 01:20 ET

- Nikkei 225 -1.1%; ASX 200 -1.1%; Hang Seng -1.2%; Shanghai Composite -0.3%; Kospi -1.4%.

- Equity S&P500 Futures +0.2%; Nasdaq100 +0.1%; Dax flat; FTSE100 -0.3%.

- EUR 1.0805-1.0816; JPY 156.89-157.15; AUD 0.6592-0.6607; NZD 0.6087-0.6101.

- Gold -0.1% at $2,344/oz; Crude Oil -0.1% at $76.82; Copper +0.7% at $4.8080/lb.