The Hong Kong Monetary Authority intervened in the currency market to defend the U.S. dollar peg as importers drive higher demand for foreign exchange.
Japan's stock market indexes, yen, and bond yield held firm, and the Bank of Japan's latest Summary of Opinions reiterated the central bank's cautious approach in normalizing interest rate policy.
China and Hong Kong market indexes rebounded after crude oil prices dropped as much as 3% following the rising possibility of a temporary ceasefire between Israel and Iran.
Middle East tensions escalated rapidly after the U.S. joined Israel's war on Iran and carried out multiple strikes targeting nuclear infrastructure. Japan's indexes declined amid the worry of a wider war in the Middle East and a disruption in global energy supply.
Crude oil prices soared as much as 7% after the U.S. joined Israel's war on Iran. China indexes wavered around the flatline amid worries of global crude oil supply disruptions.
Japan's indexes trimmed weekly gains after Friday's trading. The acceleration in core inflation in May supported the case for the Bank of Japan to continue its rate hike campaign.
Japan's trade balance remained in deficit for the second consecutive month, raising the risk of a recession. Core machinery orders and the Tankan survey showed a weakening outlook for the manufacturing sector.
Rapidly escalating Middle East tensions raised the prospects of crude oil and natural gas supply chain disruptions, as the U.S. mulled joining Israel's war on Iran.
The Bank of Japan held its short-term interest rates steady, citing rising geopolitical uncertainty and lingering uncertainty rooted in the U.S. trade policy.
