BEIJING -- The Hang Seng Index dipped 1% Friday to close at 16,136, while the Shanghai Composite Index managed a gain of 0.6% to 1665.On Thursday, China shares traded down in New York. Focus Media ( FMCN) gave up 0.3% to $62.30 despite an upbeat report from Lehman. 51Job ( JOBS) lost 5% to $19.40 and Ctrip ( CTRP) was down 4.9% to $51.22. The real action in Asia was in Tokyo, where the central bank ended six years of an effective zero interest rate policy, increasing the overnight lending rate to 25 basis points. The decision was hailed as a sign that Japan had finally broken out of deflation mode. The action occurs just as market watchers are starting to wonder about the potential for China to transform from a global deflationary force to a potentially damaging source of inflation, as its turbo-charged economic growth only continues to accelerate. That idea drew more sustenance Friday from a Shenzhen Securities Times newspaper article quoting anonymous insiders who predicted second-quarter GDP growth would hit 10.9%. Growth of that magnitude would mark a substantial rise from already ultra-high first-quarter GDP growth of 10.3%. The same article said year-on-year growth in fixed asset investment hit a stunning 35% in June. The official numbers are expected to be released next Tuesday. "We think China could be on the verge of transforming from being a global deflation exporter into an inflation exporter," wrote Citigroup's head of China strategy Lan Xue in a note published last week. A shift to inflation mode would challenge long-held perceptions about China's role in the world economy. Amid an export boom over the past decade, China has been widely viewed as a country that has transplanted its own low-cost manufactured goods to other nations. Cheap electronics, textiles and other widgets made in China are frequently cited as one factor that's helped keep a lid on price increases in the U.S.