China Lags Regional Gains

Positive risk sentiment in Asia has seen most major markets in the green, Japan leading the way higher with gains around 2% as the yen weakens on a trade weighted basis, even as Japan extends its State of Emergency in Tokyo and other areas through to June 20, just five weeks before the Olympics is due to start. In Taiwan the Taiex is up around 1.5%, boosted by foreign inflows which resumed yesterday after four days of outflows. The ASX 200 is up over 1%, buoyed by miners after metals prices rose as China said it could reduce output in a pollution crackdown. Markets in mainland China are struggling though, just about keeping their head above water. The yuan weakened today as the PBOC set the fix higher than sell-side estimates, indicating a preference for a weaker yuan, there is speculation that this is a signal the bank sees the currencies recent appreciation as too fast. In the US futures are higher, building on yesterday's gains after a rally inspired by US President Biden's spending plans.