Asia-Pacific Markets Mostly Rise as China Holds Rates Steady; Investors Watch Middle East Tensions

Asia-Pacific markets ended mostly higher on Friday, with investors reacting to steady loan rates from China and closely monitoring rising tensions between Israel and Iran.

U.S. President Donald Trump is reportedly weighing the possibility of supporting a military strike on Tehran. The White House said he will make a final decision within the next two weeks, adding a layer of geopolitical uncertainty to global markets.

China Keeps Rates Unchanged

China’s central bank, the People’s Bank of China, kept its benchmark lending rates steady on Friday, as expected. The 1-year loan prime rate (LPR) remained at 3.0%, and the 5-year LPR held at 3.5%. This decision provided some relief to investors hoping for stability in borrowing costs.

Following the news, Chinese markets edged up:

• Hong Kong’s Hang Seng Index rose 1.15%
• Mainland China’s CSI 300 index added 0.24%

Japan’s Inflation and Market Movement

Japan’s markets saw mixed action:

• The Nikkei 225 inched up 0.12%
• The broader Topix index fell 0.17%

The market movement came as Japan’s core inflation (which excludes fresh food prices) jumped to 3.7% in May, its highest since January 2023. This figure exceeded expectations of 3.6% and was above April’s reading of 3.5%. Notably, rice prices more than doubled, surging 101.7% year-on-year — the steepest jump in over 50 years. The government is now tapping into emergency rice stockpiles to ease the pressure.

South Korea Crosses Key Milestone

South Korea’s stock market had a big day:

• The Kospi index rose 1.19%, breaking above the 3,000 mark for the first time in 42 months.
• The Kosdaq (small-cap index) climbed 1.01%, reaching its highest level since August 1, 2024.

Investors cheered newly elected President Lee Jae-myung’s plans for capital market reforms. Among major stocks, Samsung Electronics rose 0.42% and SK Hynix soared 3.86%.

Meanwhile, the country’s producer price index (PPI) — a measure of wholesale inflation — rose 0.3% year-on-year in May, marking the lowest increase since prices last fell in July 2023. On a month-to-month basis, prices actually declined by 0.4% in May.

India and Australia Show Modest Moves

• India’s Nifty 50 started the day 0.21% higher, and the BSE Sensex gained 0.29%.
• In Australia, the S&P/ASX 200 index narrowed earlier losses to close down just 0.2%.

Spot Gold Dips Amid Fed Expectations

Gold prices slipped on Friday, poised to end the week in negative territory. As of 12:20 p.m. Singapore time, spot gold was down 0.45% to $3,355.08 per ounce. The decline is due to expectations of fewer interest rate cuts by the U.S. Federal Reserve.

Still, gold has had an impressive run this year — rising 31.2% since January, largely due to its status as a safe-haven asset amid global political and financial uncertainty.

U.S. Markets Await Direction

U.S. stock futures dipped slightly during early Asian hours as traders processed updates on the Middle East situation. Regular trading in the U.S. was closed on Thursday for the Juneteenth holiday.

Market Snapshot

Here’s a look at how key Asia-Pacific indexes fared:

Index	Last Close	Change	% Change
Hang Seng (HSI)	23,504.59	+266.85	+1.15%
Kospi (KS11)	3,009.80	+32.06	+1.08%
Nikkei 225 (N225)	38,461.45	-26.89	-0.07%
Shanghai Composite (SSEC)	3,364.83	+2.73	+0.08%
S&P/ASX 200 (AXJO)	8,504.00	-19.70	-0.23%
CNBC 100 Asia	10,864.77	+42.29	+0.39%

Asia-Pacific markets reflected a cautiously optimistic mood to end the week, with gains led by South Korea and Hong Kong. Central bank decisions, inflation data, and geopolitical developments continue to steer market sentiment.

As investors keep a close eye on the Middle East and upcoming U.S. monetary policy signals, next week could bring more volatility — and opportunity.

Stay tuned.