Asia

Japan Retail Sales Fall After Tax Increase. Retail sales in Japan fell 4.4% in April, compared with the same period last year, as the effect of an increase in the country's sales tax began to be felt. Japan raised the tax from 5% to 8% on 1 April -the first hike in 17 years. The country faces rising social welfare costs due to an ageing population and is trying to rein in public debt. (BBC)

BOJ Revises Government Bond Purchases To Manage Record Easing. The Bank of Japan revised guidance for its government bond purchases for a third time since it began unprecedented easing last year, reflecting challenges Governor Haruhiko Kuroda faces in reflating the economy. The BOJ will buy about 150 billion ($1.5 billion) to 350 billion yen of Japanese government bonds of more than 10 years per auction, compared with its prior guidance of 200 billion to 300 billion yen, it said yesterday in a statement. It will buy about 6 trillion to 8 trillion yen of debt per month, revising a prior statement that specified “approximately 7+ trillion yen.” (Bloomberg)

S. Korea Current Account Surplus Narrows In April. South Korea's current account surplus narrowed slightly in April, but strong car and steel exports kept it in the black for the 26th straight month, the central bank said Thursday. The April surplus stood at US$7.12bil, down 2.2% from a revised US$7.29bil in March, the Bank of Korea (BoK) said. Compared with a year earlier, the surplus was up 56.5% from US$2.57bil. (AFP)

South Korea June Business Outlook Index Slips To Ten-Month Low. South Korean manufacturing companies' assessment of their business conditions for the coming month eased for a fourth month to its lowest in 10 months, a central bank survey showed on Friday. The Bank of Korea's manufacturing business outlook index for June stood at a seasonally adjusted 77, compared with a reading of 79 for May. It was the lowest the index has been since August 2013. Weak domestic demand continued to be the biggest concern for manufacturers in their future business, the survey said, while exchange rates moved up the list to be the second largest hurdle for manufacturers. (Reuters)

China Speeds Up Spending. Chinese authorities are stepping up efforts to ward off a sharper economic slowdown, analysts said after Beijing called on local governments to speed up their spending over the next month to boost activity. The finance ministry said on Wednesday that local governments risked losing 2014 budget funds not allocated by the end of June and that spending on some projects could be front-loaded to help boost the economy. The move to accelerate, but not increase, spending follows other steps to underpin the economy after a run of weaker-than-expected data this year raised concerns growth could miss the official forecast for the first time in 15 years. (Reuters)

USA

U.S. Economy Stumbles In First-Quarter, But Prospects Brighter. The U.S. economy contracted for the first time in three years in the first quarter as it buckled under a severe winter, but there are signs it has rebounded and economists say it could grow as much as 4 % in the current quarter. The Commerce Department on Thursday slashed its estimate of gross domestic product to show the economy shrank at a 1.0 % annual rate. The worst performance since the first quarter of 2011 reflected a far slower pace of inventory accumulation and a bigger than previously estimated trade deficit. These weather-related temporary factors should fade. Inventories, in particular, are expected to swing higher, boosting output in the April-June quarter. (Reuters)

U.S. Jobless Claims Drop, Continuing Claims Lowest Since 2007. The number of Americans filing new claims for unemployment benefits fell more than expected last week, pointing to a strengthening labor market. Initial claims for state unemployment benefits declined 27,000 to a seasonally adjusted 300,000 for the week ended May 24, the Labor Department said on Thursday. The prior week's claims were revised to show 1,000 more applications received than previously reported. Economists polled by Reuters had forecast first-time applications for jobless aid falling to 318,000 last week. (Reuters)

Pending Sales Of U.S. Existing Homes Increased 0.4% In April. Contracts to purchase previously owned homes rose for a second month in April, a sign the residential real estate market is stabilizing after a weak start to the year. The pending home sales index climbed 0.4 % after a 3.4 % increase in March that was the first gain in nine months, the National Association of Realtors said today in Washington. The median projection in a Bloomberg survey of economists called for the April index to rise 1 %. (Bloomberg)

Europe

Russia Forges Huge Economic Bloc With Kazakhstan And Belarus. he presidents of Russia, Kazakhstan and Belarus signed a treaty on Thursday creating a vast trading bloc, which they hope will challenge the economic might of the US, the European Union and China. The treaty forging the Eurasian Economic Union will come into force on Jan 1, once it has passed the formality of being approved by the three former Soviet republics' parliaments. The new union's three countries have a combined population of more than 170 million people, and a gross domestic product between them of around US$2.7tril. Kazakhstan and Russia are both oil producers. (Reuters)

Currencies

Dollar Inches Down As Yields Remain Below 2.5%. The dollar pulled back against major rivals Thursday as U.S. yields remained below 2.5%. But losses were limited, with a key gauge of the dollar’s strength remaining near three-month highs. The ICE dollar index, a measure of the greenback’s strength against six rivals, fell to 80.491 from 80.563 late Wednesday. The dollar inched down to ¥101.75 from ¥101.84 late Wednesday. The euro edged up to $1.3605 from $1.3594 late Wednesday. The British pound traded at $1.6717 versus $1.6713 late Wednesday. The Australian dollar rose to 93.04 U.S. cents from 92.32 U.S. cents. (Market Watch)

Commodities

U.S. Crude Rises As Gasoline Stocks Draw Supports. U.S. Crude prices rose on Thursday after government inventory data showed a sharp drawdown in gasoline that outweighed a build in overall crude stocks, while Brent edged up supported by the low Libyan output and the Ukraine crisis. U.S. Crude oil rose as much as $1.22 to an intra-day high of $103.94 before giving back some gains to settle 86 cents higher at $103.58 a barrel. Brent crude settled 16 cents higher at $109.97 a barrel after losing 21 cents on Wednesday. (reuters)

Gold Eases But Off Lows As Data Shows U.S. GDP Shrank. Gold prices eased on Thursday but bounced off their lowest level in nearly four months after data showed the U.S. economy contracted in the first quarter for the first time in three years. Spot gold fell as low as $1,251.10 an ounce, its lowest since Feb. 4. It was down 0.2 % to $1,255.29 by 2:42 p.m. EDT (1842 GMT). Silver fell 0.2 % to $18.99 an ounce. Among other precious metals, platinum rose 0.4% to $1,454.13 an ounce, while palladium was up 0.5% at $833.75 an ounce. (Reuters)