At a glance:

US-Iran ceasefire extension tentatively agreed but awaiting Trump sign-off; nuclear language sticking points remain; Iran’s claim of shooting down a US aircraft near Bushehr denied by US authorities
Tokyo core CPI missed across all measures in May, extending a six-month slowdown; core ex-food and energy at 1.6% vs 1.9% forecast; Japanese factory output surprised to the upside in April
RBNZ Governor Anna Breman signalled rates will rise sooner and by more than previously indicated
Russian drone struck a residential building in Galați, Romania; NATO response expected to be diplomatic rather than kinetic
Dell shares surged 25%+ after blowout first-quarter earnings; Pentagon’s $9.7 billion software contract an additional driver
SpaceX targeting $1.8 trillion IPO valuation; Blue Origin’s New Glenn rocket exploded during a hot-fire test
Japan MOF intervention data due 1000 GMT / 0600 Eastern covering April 28 to May 27

A tentative agreement to extend the US-Iran ceasefire for 60 days lifted risk sentiment through the session, but the deal remained unsigned and fragile. Vice President JD Vance said President Trump had yet to endorse the memorandum of understanding, with negotiations still grinding over language on Iran’s nuclear programme, specifically the disposition of Tehran’s highly enriched uranium stockpile and its future enrichment rights. Vance said he believed Iran was negotiating in good faith but could not guarantee an agreement would be reached. Iranian state television claimed a US aircraft had been destroyed near Bushehr, a report US authorities flatly denied.

In Japan, Tokyo’s key inflation gauges missed forecasts across the board in May. Core CPI, excluding fresh food, rose 1.3% year-on-year against a 1.5% forecast, marking a sixth consecutive month of slowdown. The core-core index, stripping out both fresh food and energy, came in at 1.6% against an expected 1.9%. Government subsidies on utilities and tuition were the primary drag, with analysts expecting inflation to re-accelerate as energy and import price pressures build. Offsetting the soft inflation data, separate figures showed Japanese factory output rose 0.8% in April, confounding forecasts for a 0.9% decline, with manufacturers projecting a further 5.1% rise in May.

The soft data complicates the BOJ’s messaging ahead of its June policy meeting, where overnight index swaps had been pricing around an 80% probability of a hike to 1% from the current 0.75%. With subsidies distorting the headline reads, the BOJ’s case for June rests heavily on the expectation that inflation will re-accelerate once those effects drop out.

Japan’s TOPIX moved to a record high.

New Zealand dominated the central bank narrative. RBNZ Governor Anna Breman, whose casting vote broke a 3-3 split on the monetary policy committee to keep the OCR on hold at 2.25% this week, made clear the pause is temporary. Breman said the OCR is likely to increase sooner and by more than previously signalled, with the bank focused on returning inflation to target while managing economic volatility. Assistant Governor Karen Silk had earlier reinforced the hawkish message, saying the bank does not need to wait for a quarterly CPI print to act and that the bias is toward rate increases at coming meetings. The New Zealand dollar firmed on the guidance.

Currencies otherwise consolidated against a broadly flat US dollar. Traders nudged away from the greenback on ceasefire optimism but stopped well short of a full risk-on move, with the deal’s unsigned status keeping positioning cautious.

A Russian one-way attack drone entered Romanian airspace during a strike on Ukraine and struck a residential apartment block in the eastern city of Galați, injuring several people. Romania’s defence ministry confirmed the incident and scrambled F-16s. NATO’s response is expected to be diplomatic, likely involving the summoning of the Russian ambassador and increased economic pressure rather than any kinetic reply.

Dell shares surged more than 25% after the company reported its strongest earnings since returning to public markets in 2018. Revenue hit a record $43.8 billion, up 88% year-on-year, while diluted EPS rose 282% to $5.24. The Pentagon’s award of a five-year, $9.7 billion software purchasing agreement to Dell Federal Systems added further impetus, reinforcing the market’s view of Dell as a major AI infrastructure supplier rather than a traditional hardware company. Separately, SpaceX is targeting a valuation of at least $1.8 trillion in its forthcoming IPO, while Jeff Bezos’ Blue Origin reported an anomaly during a hot-fire test of its New Glenn rocket, which exploded in footage circulated on social media.

Japan’s Ministry of Finance intervention data covering the period from April 28 to May 27 is due at 1000 GMT, 0600 Eastern. Bloomberg analysis of BOJ accounts had pointed to up to ¥10 trillion deployed in late April and through Golden Week, and the official figure will set the tone for yen trading heading into the weekend.