10/06/2026

BIZ & FINANCE WEDNESDAY | JUNE 10, 2026

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Indonesia raises rates in move to support rupiah

late April through early May, to support the yen. But the impact has proved limited with the yen having wiped out all gains made after the record amount of intervention. Rising Japanese government bond (JGB) yields have also done little to halt the yen’s declines. Mounting inflationary pressures from the Iran war has pushed up the benchmark 10-year JGB yield to 2.74% yesterday, putting it on track for its highest close since May 22. “Rising interest rates affect the economy through various channels, so we will continue to scrutinise rate moves and their effect on the economy,” Economic Revitalisation Minister Minoru Kiuchi told a news conference yesterday. Kiuchi is seen as close to reflationist aides of Prime Minister Sanae Takaichi, who propose keeping fiscal and monetary policy loose to focus on propping up growth. An influential ruling party panel submitted to Kiuchi yesterday a list of proposals, which included a call to proceed with the food levy freeze and consider ramping up spending if needed to cushion the economic blow from the Iran war. – Reuters GSK to buy cancer specialist Nuvalent for US$10.6 billion LONDON: British pharmaceutical group GSK said yesterday it had agreed to buy Nuvalent, a Boston-based company focused on cancer treatments, for US$10.6 billion (RM43 billion). The deal includes three lung cancer therapies currently in their testing phase, GSK said in a statement. Two of the treatments “are potential best-in-class assets that could launch this year if approved” by US regulators, said GSK chief executive Luke Miels. GSK said it could complete the deal this year, which may allow it to launch the two late-stage drugs, zidesamtinib and neladalkib, before the end of 2026 subject to approvals. “GSK’s proven track record, infrastructure, and expertise will support the successful commercialisation of zidesamtinib and neladalkib, as well as accelerate advancement of our broader discovery pipeline,” Nuvalent CEO James Porter said in the statement. – AFP South Korean shares rebound over 8% SEOUL: South Korean shares rebounded sharply yesterday, recovering after the previous session’s steep losses, as investors snapped up beaten-down technology stocks following the market’s sharpest one-day decline in three months. The benchmark Kospi closed up 612.52 points, or 8.18%, at 8,096.93, marking its biggest one-day percentage gain since May 21. In the previous session, the index slipped 8.3% to its biggest decline since early March. In early hours yesterday, the index triggered a “sidecar” trading curb designed to temper excessive market volatility, but extended gains in afternoon trade. Among index heavyweights, chipmaker Samsung Electronics rose 8.97% and peer SK Hynix gained 15.91%, mirroring gains on Wall Street where chipmakers surged overnight on bargain-hunting demand to send the Philadelphia SE Semiconductor Index 5.6% higher. – Reuters

BI also said its policy intended to increase returns by attracting foreign portfolio investment inflows into Indonesia. Barclay’s said in an analyst note that the central bank was also using other measures to attract capital inflows, including a 10% reduction in the hedging swap rate for foreign investors as well as higher six-, nine- and 12-month SRBI yields. It added that it expected another hike of 25 basis points in next week’s meeting, taking rates to 5.75%, with the possibility of a larger, 50bp move. –Reuters

spending plans and a ballooning fuel subsidy budget following the Iran war, along with doubts about the central bank’s autonomy and controversial new commodity export policies. Meanwhile, the central bank’s escalating interventions in the currency markets have drained Indonesia’s forex reserves to their lowest level in nearly two years. They dropped by US$1.3 billion in May to US$144.9 billion, despite the government’s US$3.5 billion sale of US dollar- and euro-denominated bonds last month.

o Central bank cites currency weakness, global volatility, inflation risks as reasons for off-cycle hike of 25 basis points

JAKARTA: Indonesia’s central bank raised interest rates by 25 basis points yesterday in an unexpected off-cycle rate hike, taking the benchmark rate to 5.50% as it moves to stabilise the rupiah, which has hit a series of record lows. Bank Indonesia (BI) said in a statement posted on its website that the off-cycle rate hike was necessary because “the rupiah exchange rate has weakened more than expected” since its last meeting. The bank was scheduled to meet next week with the rupiah coming under mounting pressure after falling 8% this year and 7% since the Iran war erupted, making it one of the world’s worst performing currencies. The currency strengthened slightly to 18,075 after the decision, a day after touching another record low of 18,190 per US dollar. In the past three weeks it experienced its steepest drop since 2020. BI hiked rates by a higher than expected 50 basis points in its last meeting in May. But even that hike and a US$12 billion (RM48.7 billion) drop this year in Indonesia’s foreign exchange reserves, which the central bank uses to defend the rupiah, have not been able to shore up the currency. “This rate hike is a further step to strengthen the rupiah’s exchange rate stabilisation against the impact of high global volatility BEIJING: Chinese exports surged by almost a fifth last month, official data showed yesterday, as shipments of tech components and machinery helped the world’s second-largest economy weather pressure from the Middle East war. The spike marks a bright spot for the Chinese leadership as it struggles to kickstart growth following the pandemic and amid trade frictions with the United States. The 19.4% year-on-year jump in overseas shipments was driven largely by artificial intelligence and auto exports, the General Admi nistration of Customs (GAC) said, and topped the 15% forecast in a Bloomberg survey of economists. It was also faster than April’s 14.1% jump. Imports soared 27.4% year-on year in May, topping the 26% estimated in the Bloomberg survey. That will come as some comfort to Beijing as it looks to shift the country’s drivers of growth away from manufacturing and towards domestic consumption.

caused by the war in the Middle East and a pre-emptive measure to maintain inflation in 2026 and 2027 within the target range,” BI said. The rupiah has been under pressure due to a wide range of investor worries, including President Prabowo Subianto’s big

Farmers plant seedlings in a rice field, as the Indonesian government urged farmers to immediately replant their plots, responding to the erratic forces of weather for a possible prolonged dry spell linked to El Nino, in Cirebon regency, West Java province. The central bank’s escalating interventions in the currency markets have drained Indonesia’s forex reserves to their lowest level in nearly two years. – REUTERSPIC

China exports surge as economy withstands Middle East pressure

Japanese policymakers issue warning on yen, bond yields

TOKYO: Japanese policymakers said yesterday they stood ready to act decisively against excessive yen falls while remaining vigilant to rising bond yields that could hurt the economy, highlighting the dilemma they faced in countering unfavourable market moves. Mounting prospects of a Bank of Japan (BOJ) rate hike next week, following hawkish signals from its governor, failed to reverse the yen’s declines that boost import prices and households’ cost of living. “Our stance remains unchanged. We are always prepared to take decisive measures,” Finance Minister Satsuki Katayama said in a news conference yesterday. The renewed threat of intervention, however, failed to drive the yen away from the 160-per-dollar level seen as heightening the chance Tokyo will step in to prop up the currency. The yen weakened to as low as 160.295 per dollar yesterday. Data showed Japanese authorities spent ¥11.7 trillion (RM296.7 billion) intervening in foreign exchange markets, likely in several occasions from

critical industries from Chinese rivals will feed further discussions at the G7 heads of state meeting in France and an EU leaders’summit in Brussels this month. Last month, China kept a trade surplus of US$105 billion, from US$85 billion in April, a gap that is worrying for European economies and other governments. Experts are increasingly warning of a “China shock 2.0”, with a glut of inexpensive goods made in the Asian powerhouse threatening manufacturers around the world as trade deficits widen. Despite surging trade, weaker demand and rising energy costs caused by the Middle East war have started to weigh on economic growth. China’s factory activity was flat last month after two months of expansion, official data showed. The country’s factories are facing higher costs with the prices of raw materials rising, particularly in the energy and chemical sectors, as shipping constraints remain a problem. – AFP

Exports to the United States surged 35.4% on-year, as President Donald Trump visited Beijing with trade high on the agenda. The surge also came from a low base of comparison after the US president sparked a trade war with Beijing in April last year. Shipments to the world’s biggest economy hit US$39 billion (RM158.3 billion), according to the GAC, up from US$28.8 billion 12 months ago. “The strong export growth shows the competitiveness of the Chinese firms in the international market,” said Zhiwei Zhang of Pinpoint Asset Management. “It helps to offset some of the weakness in the domestic demand.” But, Zhang warned, there was still a risk of “potential escalation of trade tension between China and the major trading partners such as Europe”. The European Union said last month it needed to act more forcefully to rebalance its trade relationship with China. Talks held among European commissioners on protecting