Attention now turns to upcoming US inflation data. US 10-year Treasury yields rose to around 4.54% as higher energy prices and stronger labor market data reinforced expectations that the Federal Reserve may need to keep policy restrictive for longer.

The stronger inflation reading strengthened expectations of a Bank of Japan rate increase in the coming months. China’s annual inflation rate held at 1.2% in May, below forecasts. Higher transport costs offset weaker food prices, while core inflation eased and monthly consumer prices recorded a modest decline.

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