Live news updates: Asia-Pacific stocks rise following US rate increase and Jay Powell comments

Shanghai is to test its entire population for Covid-19 every weekend for the next six weeks, authorities said on Wednesday evening, as the Chinese city struggles to throw off restrictions after emerging from weeks of lockdown.

Shanghai will require all residents to undergo weekly tests until the end of July. The mega-city of 26mn people reported 174 new local cases of the virus on Thursday, down from a peak of more than 20,000 a day in April.

Shanghai authorities are under pressure to stamp out community cases, which is proving difficult given the transmissibility of the Omicron variant. China’s curbs have been damaging to economy, with premier Li Keqiang warning that Shanghai might struggle to post growth this quarter and banks concerned that further lockdowns might significantly dent economic prospects.

The People’s Daily newspaper, an official mouthpiece of the Chinese Communist party, on Thursday published a triumphant take on the country’s economy, pointing to May’s better-than-expected industrial output and retail sales data as signs that China was “gradually overcoming the negative impact of the virus, [and] the economy has regained momentum”.

Analysts at BNP Paribas estimated that China’s gross domestic product contracted 1.5 per cent in May, however, compared to the same period a year go. This, they said, coupled with a 4 per cent decline in April, “makes the government’s target of achieving positive growth in Q2 and regaining a desirable growth rate from Q3 difficult”.

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