investingLive Asia-Pacific FX news wrap: RBNZ hold, Oz headline CPI softer, BoJ spadework

• RBNZ Gov Breman says all policy setters agree on hikes, but not on timing
• BOJ signals loose conditions persist as Ueda lays groundwork for rate hike ahead
• Australia April CPI slows to 4.2% but core inflation creeps to highest since 2024
• NZD jumps – RBNZ holds OCR at 2.25% by casting vote as committee splits 3-3 on rate hike
• RBNZ leaves its cash rate on hold at 2.25%, as widely expected
• China data, YTD (January – April) Industrial profits +18.2% y/y (prior +15.5%)
• Australian April CPI: Headline 4.2% (expected 4.4%, prior 4.6%)
• PBOC sets USD/ CNY mid-point today at 6.8291 (vs. estimate at 6.7883)
• Oil slips in Asia as Hormuz deal hopes offset renewed Iran hostilities
• UNCONFIRMED – Al Jazeera says a deal is done, signing to come
• Ueda opens BOJ conference with warning that temporary oil shocks can become persistent
• Japan April Services PPI (Corporate Services Price Index) 3% y/y (f’cast 3.3%, prior 3.1%)
• BOJ opens two-day IMES conference on monetary policy, global central bank cast: Fed, RBA
• Musk discussed merging SpaceX and Tesla as rocket company prepares Nasdaq debut
• NAB joins CBA and Westpac in flagging firm Australian underlying inflation for April
• Australia April CPI preview: Analysts split as conflict costs filter through.
• Citadel Securities warns Fed risks falling behind curve as inflation threat grows
• TD Securities holds bearish dollar view despite stronger US data and Iran conflict
• investingLive Americas FX news wrap 26 May:Records Set on War Risk Fade, Chips Surge
• ICYMI – Bank of France governor vows ECB will do whatever it takes to contain inflation

A knife-edge RBNZ decision, firming BOJ hike signals and stubborn core inflation kept markets busy across a session heavy with central bank newsflow.

Central banks dominated

The session’s centrepiece was the RBNZ’s Monetary Policy Statement, which delivered a hold by the narrowest possible margin. Governor Anna Breman’s casting vote resolved a 3-3 split in favour of keeping the OCR at 2.25%, but the hawkish message embedded in the updated projections and unanimous agreement on the need for hikes this year left the New Zealand dollar higher. The OCR track was revised sharply upward, with a terminal rate of 3.28% now projected for June 2029 and inflation forecast to peak at 4.3% in the September quarter.

Australia CPI: softer headline, firmer core

Australian April CPI printed below consensus at 4.2% annually, but the headline softness owed almost entirely to the temporary fuel excise reduction. The trimmed mean measure of core inflation ticked up to 3.4% annually, a 22-month high, keeping the RBA’s June decision genuinely open. The AUD fell on the data.

BOJ laying groundwork

Governor Ueda’s IMES Conference remarks and subsequent parliamentary testimony from BOJ Monetary Affairs Director-General Akio Okuno together pointed toward a June 16 rate increase. Ueda framed the current Middle East conflict as Japan’s fifth oil shock and argued that initial conditions, including shifting inflation expectations and a tighter labour market, make this episode more consequential than previous ones. Okuno confirmed financial conditions remain loose and real rates negative. The Nikkei rose 1.3% to a fresh record above 66,000.

Geopolitics: cautious optimism on Hormuz

Oil drifted lower as hopes for a US-Iran agreement remained intact despite recent US self-defence strikes in southern Iran. An Al Jazeera chief tweeted that a deal had been agreed but not yet signed, though no official confirmation followed. Uncertainty remained elevated.

Equities: mixed across the region

• Nikkei +1.3%, fresh record above 66,000, driven by tech and a softer-than-expected Services PPI
• KOSPI +4.7%, new all-time high, outperformer of the session
• Hang Seng -0.8%, Shanghai Composite -0.9%, Chinese markets lagged amid USTR Greer comments that US tariffs on Chinese goods will likely always remain higher than for other countries; Xiaomi reported a 43% drop in adjusted Q1 net profit

Other stories

• Goldman Sachs lifted its year-end 2026 S&P 500 target to 8,000 from 7,600
• China industrial profits rose at their fastest pace in more than two years, lifted by AI-related demand and the oil price surge
• Samsung’s largest union approved a compensation deal averaging approximately $340,000 per chip worker, averting a strike that threatened global supply chain disruption
• Elon Musk has discussed merging SpaceX and Tesla with colleagues as SpaceX prepares its Nasdaq debut at a $1.25 trillion valuation; both companies are rapidly scaling AI capital expenditure

This article was written by Eamonn Sheridan at investinglive.com.