Hong Kong slides 2% to new 2023 low; Asia markets mixed as China manufacturing

Thailand’s central bank raised its benchmark reverse repurchase rate to 2%, up from 1.75%, the Bank of Thailand said in a release.

This is the sixth straight rate increase since the Bank of Thailand started raising rates in August 2022 from a base of 0.5%.

The BOT explained while headline inflation slowed, core inflation remains “elevated,” and inflationary risks still come from greater demand pressures “amid expanding economic activity and higher cost pass-through from supply pressures.”

The Thai baht weakened slightly against the greenback to trade at 34.75 on Wednesday.

— Lim Hui Jie

American chipmakers embroiled in the U.S.-China chip war are going to push back if Washington imposes more export controls on China, said Carol Schleif, chief investment officer at U.S.-based BMO Family Office.

“Clearly businesses in the U.S. want the government to back off a bit and toe a very fine line,” said Schleif on CNBC’s “Squawk Box Asia” on Wednesday.

Her comments come after Nvidia’s CEO Jensen Huang last week called China a “very important market” and warned that chip wars with China risk “enormous damage” to U.S. tech.

In a retaliatory move to Washington’s efforts to cut off China’s access to high-end chips, China banned the use of Micron — the biggest U.S. memory chip maker — chips in China in May.

BMO Family Office’s Schleif said that the government wants to ensure security and protection of intellectual property but at the same time, businesses need to participate in a global market. 

“I would imagine that the government is going to listen to the heavy lobbying from businesses because we have got a lot of important chipmakers,” said Schleif.

She added that while the U.S. invented semiconductors, most of the manufacturing are outside of the U.S. “It is just as important for us to rebuild the infrastructure that we have here to continue to play and grow our position in those chips.”

— Sheila Chiang

North Korea’s first attempt at launching a military spy satellite resulted in failure on Wednesday, with South Korea’s military picking up wreckage after the carrier rocket crashed into its western waters.

North Korea’s state media agency, the Korean Central News Agency, said that an “accident” occurred during the launch of a military reconnaissance satellite.

“The carrier rocket ‘Chollima-1’ fell to the West Sea of Korea after losing thrust due to the abnormal starting of the second-stage engine after the separation of the first stage during the normal flight,” it said on the English language version of its website.

South Korean defense stocks seemed unmoved by the Wednesday launch, with Hanwha Aerospace and Korea Aerospace both flat in Seoul’s afternoon trade.

– Jihye Lee

China’s official measure of factory activity for May came in at 48.8, below the 50-mark that separates growth from contraction — and missing the 49.4 estimate from a Reuters poll.

A weak read in that manufacturing measure “has been a solid precursor to policy easing,” Morgan Stanley analysts said in a May 17 report.

“If growth does not accelerate sufficiently to narrow the output gap, social stability risk may rise and eventually trigger more meaningful stimulus,” they said.

The National Bureau of Statistics noted the purchasing managers’ index for large manufacturers came in at 50, while that of smaller manufacturers was lower. The index for services activity remained in expansionary territory at 54.5, but marked a second-straight month of decline.

— Evelyn Cheng, Jihye Lee

Australia’s headline inflation hit 6.8% in April, higher than the range of expectations from economists polled by Reuters. The poll of 19 economists saw predictions range from 5.9% to 6.6%.

The country’s statistics bureau elaborated that the most significant price rises were in housing, which saw a year-on-year increase of 8.9%.

This was followed by increases in food and non-alcoholic beverages, as well as transport, which saw…