Insights 
VT 
China’s industrial profits have risen by 1.4% year-on-year in the January-April period of 2025, an increase from the 0.8% growth observed in the first quarter. This growth is a result of government stimulus and strong performance in high-end manufacturing sectors.
Japanese Inflation Data
On June 27, 2025, the economic calendar in Asia will pay close attention to Japanese inflation data. Notably, Tokyo inflation data will be released, and Minneapolis Federal Reserve Bank President Neel Kashkari is scheduled to speak.
Neel Kashkari’s participation will be at a town hall and Q&A session at the Montana Chamber of Commerce. This event is set for 1900 US Eastern time, equivalent to 2300 GMT.
What this means, more plainly, is that profits generated by Chinese industrial firms — factories, manufacturers, and other secondary sector players — grew by just over one percent in the first four months of the year, compared to the same period last year. While that rise may not seem drastic, it’s a step up from where things stood after the first three months, nudging us toward the idea that momentum could be gaining. The bulk of that momentum has come not from broad-based growth but rather from heavily targeted government support and increased demand in upper-tier manufacturing — think aerospace, automotive technologies, and precision equipment.
When we consider such data alongside what’s ahead on the economic diary, especially out of Asia, it sets the stage for a week where market participants may need to stay watchful. Japanese inflation is next in focus. The Tokyo reading often serves as a bellwether for the nationwide picture, and while the core figures matter, even the headline number can shift expectations about monetary policy just a notch — which rarely goes unnoticed by rates traders.
Meanwhile, Kashkari’s upcoming remarks don’t just wander into irrelevance. Recent history shows that even town hall events — especially those featuring Q&A opportunities — sometimes produce headlines that rattle short-term rate expectations. Though he isn’t regarded as the most hawkish voice in the room, his views carry added weight when they challenge or reaffirm consensus speculation about the Federal Reserve’s direction.
Market Volatility
So we take this as a moment that calls for being more selective and timing-conscious. Lower-tier volatility, particularly around Asian hours, might be more frequent as positioning adjusts ahead of the Tokyo numbers. Currency pairs and cross-asset movements that include the yen may drift erratically, influenced by even marginal differences between expected and actual data.
A small uptick in manufacturing profits, especially in a powerhouse economy like China’s, tends to give ripple effects to exporting neighbours and commodity-linked asset pricing. It doesn’t change the whole game, but contributes enough to shift beta-sensitive derivatives just enough to trap the complacent. At the same time, any guidance from Kashkari that bends too far away from the forward curve could press premiums on short-dated volatilities, as hedges are quickly realigned.
Eyes should not stray far from liquidity proxies and relative rate spreads as these two drumbeats play out. When profit margins narrow, as they still do in several traditional sectors, and central banks flag uncertainty even in casual remarks, pricing flows become slippier. It only takes one misstep — a misread CPI, a misunderstood comment — to unravel what, on the surface, looks like a calm preparatory phase.
From where we stand, it won’t do to go into the weekend carrying the same exposures unchecked. Watch the knee-jerks and thin liquidity gaps. And try not to assume that silence means stability.
