iShares MSCI Pacific ex Japan ETF

EPP

Market cap $2.13B

The Bank of Japan should lay out a clear path for policy normalisation after a widely expected rate hike this month ​to stabilise the bond market, Sumitomo Mitsui Financial Group's global markets chief, Arihiro ‌Nagata, told Reuters.

Japan's government is preparing a supplementary budget of around 3 trillion yen, or about $19 billion, to replenish reserves and fund fuel and utility subsidies amid higher energy costs. Takaichi has said overall bond issuance will remain unchanged, even though the extra spending will be financed with deficit-covering bonds.

Japanese stocks were higher in early trade thanks to continued hopes for U.S.-Iran peace talks.

Japan's consumer inflation cooled in April as government measures capped price growth despite rising energy costs.

Energy costs remained in focus as lawmakers pushed subsidy measures. Strong exports supported growth and kept rate hike expectations alive.

Policy board member Junko Koeda said Japan's underlying inflation is likely already at around 2%.

Investors are focusing on AI developments in North Asia. China is coming out of more than three years of deflation measured by the producer price index.

Nick Ferres, CIO of Vantage Point Asset Management, joins Squawk Box Asia to discuss the impact of the prolonged energy shock on global markets. He notes that the Japan is particularly vulnerable to the oil supply shock, and talks about the BOJ's policy dilemma.

Asia-Pacific equities outside Japan have quietly delivered one of the stronger performances among developed-market ETFs over the past year, and most retirees haven't noticed.

Among APAC equity markets, Australia has a higher beta to oil prices while India, Indonesia and Thailand have lower betas. Domestic political uncertainties have been one main reason for the decoupling trend seen in Indonesia and Thailand.