Asia markets trade mixed as U.S. inflation shows more signs of easing

Japanese companies are expected to mark the biggest wage hikes in 31 years with average wages to rise by 3.89% in 2023, according to a Nikkei survey of 308 Japanese companies.

The poll also showed 90% of the surveyed companies were increasing base wages as well, noting that the previous high of wage increments reflected “favorable economic conditions” instead of the current tightness seen in the Japanese labor market.

The survey comes after the Bank of Japan in its summary of opinions from its April meeting emphasized the need for a reform in its “economic and wage structures” so that pay increments move in line with economic growth.

— Jihye Lee

Political stability and economic prosperity are the two “main considerations” for foreign investors in the upcoming Thai elections, The American Chamber of Commerce in Thailand told CNBC.

President Mook Pibuldham of AMCHAM Thailand said that the the organization’s “top wish list” from the prospective government is to solve the shortage of labor issue in the country.

“We would like to urge the government to relax the policy of immigration to allow foreign workers and skilled labor to come into Thailand,” she told CNBC’s Sri Jegarajah on “Squawk Box Asia.”

Pibuldham elaborated that last year’s introduction of the Long-Term Resident visa to the manufacturing industry was “very well received” by foreign investors, and hoped that the scheme would be extended to the service sector as well.

But the program is “only limited to the manufacturing industry,” she noted, adding, “We will like the new government to extend [that] into the service sector as well.”

Additionally, whichever government inherits office will need to have a “solid plan” on how to handle the country’s high household debt, as she feels that Thai’s domestic consumption is an instrumental gauge for investors as well.

—Lee Ying Shan

China’s foreign minister Qin Gang will visit Australia in July, South China Morning Post reported, citing sources close to the Chinese government.

He would be the most senior Chinese government official to make the visit since 2017. It also follows Australian foreign minister Penny Wong’s meeting in December with her counterpart then-foreign minister Wang Yi in Beijing.

Australia’s trade minister Don Farrell is also in Beijing for talks with his counterpart Wang Wentao to discuss the removal of China’s trade restrictions on Australian exports.

— Jihye Lee

Malaysia’s first quarter gross domestic product grew by 5.6% year on year, higher than the 4.8% predicted by economists in a Reuters poll.

This was also higher than the 4.8% rise recorded in the same period of 2022.

On a seasonally adjusted quarter-on-quarter basis, Malaysia’s economy grew marginally by 0.9%, compared to a contraction of 1.7% in the final quarter of 2022.

Malaysia’s chief statistician said the service sector was the “main impetus” for the growth, recording an increase of 7.3% compared to the same period last year.

The country’s construction sector expanded 7.4%, while its manufacturing sector grew 3.2% in the first quarter.

— Lim Hui Jie

Hong Kong’s economy is scheduled to post its final gross domestic product reading for the first quarter of this year, after a preliminary release showed a 2.7% year-on-year growth earlier this month.

The reading marked a significant turnaround after Hong Kong’s economy contracted by 4.2% in the final quarter of 2022.

Quarter-on-quarter, preliminary releases showed the economy grew by 5.3%.

“We expect Hong Kong’s economy will continue to recover, supported by reopening tailwinds and China’s growth pickup,” Oxford Economics’ senior economist Lloyd Chan said in a note earlier this month after the preliminary readings.

“But slowing growth in the major advanced economies, higher interest rates, and less fiscal support will be drags on the pace of recovery,” Chan wrote.

— Jihye Lee

Shares of K-pop giant YG Entertainment surged over 13% on Friday after the company reported a first quarter net profit of 24.78 billion won ($18.6 million), a sharp jump from the 73 million won loss in the same period last year.

The company, which is behind K-pop sensation Blackpink, saw its first quarter revenue more than double to 157.5 billion won from 75.5 billion won in the first quarter of 2022.

On Thursday, the company also announced the debut of its new girl group BABYMONSTER, its first girl group since Blackpink debuted in 2016.

— Lim Hui Jie

The European Union will see moderate growth despite persistent core inflation, as long as fiscal policy does not fuel inflation, European Commissioner for the Economy said.

“The task of fighting inflation is not finished, we still have very strong core inflation in Europe,” Gentiloni told CNBC’s Martin Soong at the G7 Finance Ministers and Central Bank Governors meeting in Niigata, Japan

He added that he expects the euro zone to see “moderate growth, not recession.”

“We have to be careful with our fiscal policy, we cannot fuel inflation with our fiscal policy,” he said.

The crisis seen in U.S. regional banks and Credit Suisse should “wake up all our regulation efforts,” Gentiloni said.

— Clement Tan

Taiwan electronics contract manufacturer Foxconn saw its first-quarter net profit tumble by 56% to 12.83 billion Taiwanese dollars ($417.2 million), down from from NT$29.45 billion in the same period the previous year.

Foxconn, which is formally known as Hon Hai Precision Industry, attributed this to impairment losses related to its 34% stake in Japanese electronics company Sharp.

Hon Hai’s CFO David Huang elaborated that Sharp had “large material asset impairments” of 219.7 billion yen or NT$50.5 billion for its financial year ended March. As such, due to Hon Hai’s shareholding ratio, it has to recognize NT$17.3 billion of investment losses.

The company’s operating results are still strong, however, with revenue increasing 4% to a record high of NT$1.46 trillion, and operating profit of NT$40.5 billion, 11% higher year-on-year.

Shares of Hon Hai slid 1.9% on Friday.

— Lim Hui Jie

MSCI will remove two Adani entities from its indexes including its India gauge on May 31 following changes to tradable shares calculation.

“Adani Transmission and Adani Total Gas will deleted from the MSCI GIMI, as well as the related MSCI Factor, MSCI ESG, MSCI Thematic and MSCI Capped Indexes as of the close of May 31, 2023,” MSCI announced as a result of its May index review.

This comes after Adani Enterprises on Wednesday announced plans to raise funds with a board meeting set for Saturday, according to a filing.

Adani companies shares fell in a nearly $150 billion sell-off earlier this year after short-selling firm Hindenburg Research accused the companies of stock manipulation and accounting fraud.

— Jihye Lee

Bank of America expects shares of a U.K. company that provides investors with direct exposure to uranium price movements, will rise by 55% over the next 12 months.

With uranium production concentrated mainly in Kazakhstan and Canada, the bank expects supply constraints to continue, further supporting uranium prices.

CNBC Pro subscribers can read more here.

— Ganesh Rao

U.S.-listed shares of e-commerce giant JD.com rose after the company beat earnings expectations.

China’s second largest e-commerce company closed 7.21% higher after the company reported stronger-than-expected first-quarter earnings.

The Alibaba rival saw its net sales for the quarter rising 1.4% year-on-year to 243 billion Chinese yuan ($35 billion), beating an analysts’ average estimate of 239.42 billion yuan, according to Refinitiv data.

The company also announced CEO Xu Lei would step down and be replaced by the current chief financial officer, Sandy Ran Xu.

— Arjun Kharpal, Jihye Lee

New Zealand’s manufacturing sector continued to see contraction in activity during April, with the reading slightly higher than seen in the previous month, government data showed.

According to the BusinessNZ Performance of Manufacturing Index, the country’s manufacturing purchasing managers index came in at 49.1, one point above March’s figure of 48.1.

A PMI reading above 50.0 indicates expansion in the sector, while a reading below 50 indicates contraction.

BusinessNZ’s Director for advocacy Catherine Beard said that the stresses and strains of the wider economy appears to be playing out in the manufacturing sector.

She noting that while the sector has not “strayed too far down into stronger levels of contraction,” it seems unable to get back in expansion mode, “with the key sub-index values of production and new orders in April again not returning a positive result.”

— Lim Hui Jie

U.S. and Chinese officials met for two days in Vienna to discuss a range of topics, including Russia’s war in Ukraine, amid tensions between the world’s two largest economies.

“The two sides had candid, substantive, and constructive discussions on key issues in the U.S.-China bilateral relationship, global and regional security issues, Russia’s war against Ukraine, and cross-Strait issues, among other topics,” the White House said Thursday in a readout of the meeting between Biden’s national security advisor, Jake Sullivan, and China’s top diplomat, Wang Yi.

The White House National Security Council and the State Department did not respond to CNBC’s requests for more details on the meeting.

Sullivan has previously reiterated deep U.S. concerns about China’s alignment with Russia and the possibility that the world’s second-largest economy might attempt to help Moscow blunt sanctions.

In the months following Russia’s invasion of its ex-Soviet neighbor, Washington and its allies have imposed rounds of coordinated sanctions vaulting Russia past Iran and North Korea as the world’s most-sanctioned country.

Read the full story here.

— Amanda Macias

Disney shares tumbled about 9% on Thursday, putting them on track for their biggest one-day loss since Nov. 9. Back then, the media giant dropped 13%.

— Fred Imbert

Alphabet shares rose more than 4% a day after Google unveiled a host of new AI tools at its developer conference in Mountain View, California.

Google said Wednesday it’s bringing AI to its poster search feature and will add capabilities to its online office suite. The company also said it’s eliminating the wait list for its chatbot Bard and unveiled its next-generation large language model known as PaLM 2.

— Samantha Subin

The producer price index, a gauge of what wholesalers paid for raw goods, rose 0.2% month over month in April, the Labor Department said Thursday. That’s less than the 0.3% advance economists polled by Dow Jones expected.

— Fred Imbert

European equities showed little initial movement in response to the Bank of England’s decision to raise interest rates by 0.25%, in line with forecasts by analysts polled by Reuters.

The pan-European Stoxx 600 index moved from a 0.4% uptick to 0.3% in the minutes after the announcement, and the banking sector dropped from a 0.4% gain to a 0.2% increase.

Britain’s central bank voted to lift its policy rate by 0.25 percentage points in its 12th consecutive hike.

— Hannah Ward-Glenton