Afp Business Asia

Wall Street stocks retreated from records on Tuesday as markets weighed muted US inflation data, mixed bank earnings and a jump in oil prices.The US consumer price index rose 2.7 percent last month, the same rate as in November and in line with expectations.While the inflation report keeps alive the prospect of interest rate cuts by the Federal Reserve in 2026, US equities tripped into negative territory as Tuesday’s session progressed.All three major indices finished in the red, led by the Dow, which was weighed down by a more than four percent drop in JPMorgan Chase shares.Both the Dow and S&P 500 had finished at records on Monday.Chief Executive Jamie Dimon described the US economy as “resilient” but investment banking results lagged behind expectations and some analysts questioned the lender’s heavy capital spending plans.Shares of other banks and credit card companies have also been pressured by President Donald Trump’s call last week to cap credit card interest at 10 percent — one of several recent Trump statements that have caught markets off guard.”Trump said a lot of stuff” and the market is quite lost where to look at, said Pat Donlon of Fiduciary Trust Company.”It’s like around Liberation Day,” Donlon said, recalling Trump’s April 2025 announcement of sweeping tariffs that sparked market volatility. “We get these wild swings and are back living on Truth Social posts.”The price of oil surged around three percent as Trump announced steep tariffs on anyone trading with Iran, sparking expectations that the threat will restrict supplies of crude.”Supply concerns remained front and center after President Trump announced new tariffs on US imports from any countries trading with Iran, raising fears of further disruptions from one of OPEC’s largest producers,” said David Morrison, senior market analyst at Trade Nation, a financial services provider.”Iran’s domestic unrest, alongside escalating rhetoric around potential military action, added to the geopolitical premium,” he said.European stock markets finished the day little changed.Earlier Tuesday, Tokyo equities closed at a record high and the yen fell on speculation over a snap election in Japan which would allow Prime Minister Sanae Takaichi to capitalize on strong poll numbers.Takaichi was appointed Japan’s first woman prime minister in October and her cabinet enjoys an approval rating of around 70 percent.Seoul climbed 1.5 percent after South Korean chip giant SK hynix said it would spend 19 trillion won ($12.9 billion) building an advanced chip packaging plant, as the firm rides the global AI boom.- Key figures at around 2130 GMT -Brent North Sea Crude: UP 2.5 percent at $65.47 per barrelWest Texas Intermediate: UP 2.8 percent at $61.15 per barrelNew York – Dow: DOWN 0.5 percent at 49,191.99 (close)New York – S&P 500: DOWN 0.2 percent at 6,963.74 (close)New York – Nasdaq Composite: DOWN 0.1 percent at 23,709.87 (close)London – FTSE 100: FLAT at 10,137.35 (close)Paris – CAC 40: DOWN 0.1 percent at 8,347.20 (close)Frankfurt – DAX: UP 0.1 percent at 25,420.66 (close)Hong Kong – Hang Seng Index: UP 0.9 percent at 26,848.47 (close)Shanghai – Composite: DOWN 0.6 percent at 4,138.76 (close)Tokyo – Nikkei 225: UP 3.1 percent at 53,549.16 (close)Euro/dollar: DOWN at $1.1643 from $1.1667 on MondayPound/dollar: DOWN at $1.3426 from $1.3465Dollar/yen: UP at 159.15 yen from 158.14 yenEuro/pound: UP at 86.71  pence from 86.64 penceburs-jmb/iv

The price of oil surged around three percent on Tuesday as US President Donald Trump announced steep tariffs on anyone trading with Iran, sparking expectations the threat will restrict supplies of crude.”Supply concerns remained front and centre after President Trump announced new tariffs on US imports from any countries trading with Iran, raising fears of further disruptions from one of OPEC’s largest producers,” said David Morrison, senior market analyst at Trade Nation, a financial services provider.”Iran’s domestic unrest, alongside escalating rhetoric around potential military action, added to the geopolitical premium,” he said.Trump said in a social media post on Monday that the new levies would “immediately” hit the Islamic republic’s trading partners who also do business with the United States.The move “is likely to hit its biggest trading partners like China”, said Victoria Scholar, head of investment at Interactive Investor.New York stocks moved lower, coming off Monday’s record levels, despite a US consumer price reading that suggested inflation is easing.Annual consumer price inflation held steady at 2.7 percent last month, which analysts believe is not enough to prompt the Federal Reserve bank into an early rate easing.”We’re beginning to see inflation retreat,” said Bret Kenwell, US investment analyst at the eToro trading platform.”December’s in-line CPI report may not be enough to move the Fed’s view toward a more aggressive rate-cutting policy. But as a cooling jobs environment persists, inflation may not be as much of a constraint when it comes to interest rate policy,” he said.Investors meanwhile mostly shrugged off worries about a US criminal probe of the Federal Reserve that comes amid heavy Trump pressure on Fed chair Jerome Powell to cut rates aggressively.The heads of major central banks threw their support behind the Fed and Powell on Tuesday, saying in a joint statement that it was “critical to preserve” their independence.European stock markets finished the day little changed.Earlier Tuesday, Tokyo equities closed at a record high and the yen fell on speculation over a snap election in Japan which would allow Prime Minister Sanae Takaichi to capitalise on strong poll numbers.Takaichi was appointed Japan’s first woman prime minister in October and her cabinet enjoys an approval rating of around 70 percent.Seoul climbed 1.5 percent after South Korean chip giant SK hynix said it would spend 19 trillion won ($12.9 billion) building an advanced chip packaging plant, as the firm rides the global AI boom.Gold and silver set record highs for the second day in a row as investors sought refuge from geopolitical uncertainty.- Key figures at around 1630 GMT -Brent North Sea Crude: UP 2.9 percent at $65.75 per barrelWest Texas Intermediate: UP 3.1 percent at $61.32 per barrelNew York – Dow: DOWN 0.6 percent at 49,278.03 pointsNew York – S&P 500: DOWN 0.3 percent at 6,958.63New York – Nasdaq Composite: DOWN 0.2 percent at 23,690.92London – FTSE 100: FLAT at 10,137.35 (close)Paris – CAC 40: DOWN 0.1 percent at 8,347.20 (close)Frankfurt – DAX: UP less than 0.1 percent at 25,420.66 (close)Hong Kong – Hang Seng Index: UP 0.9 percent at 26,848.47 (close)Shanghai – Composite: DOWN 0.6 percent at 4,138.76 (close)Tokyo – Nikkei 225: UP 3.1 percent at 53,549.16 (close)Euro/dollar: DOWN at $1.1639 from $1.1666 on MondayPound/dollar: DOWN at $1.3430 from $1.3466Dollar/yen: UP at 159.17 yen from 158.17 yenEuro/pound: UP at 86.67 pence from 86.63 penceburs-rl/jh

The price of oil rose on Tuesday after US President Donald Trump announced steep tariffs on anyone trading with Iran, sparking expectations the threat will restrict supplies of crude.”Supply concerns remained front and centre after President Trump announced new tariffs on US imports from any countries trading with Iran, raising fears of further disruptions from one of OPEC’s largest producers,” said David Morrison, senior market analyst at Trade Nation, a financial services provider.”Iran’s domestic unrest, alongside escalating rhetoric around potential military action, added to the geopolitical premium,” he said.Trump said in a social media post on Monday that the new levies would “immediately” hit the Islamic republic’s trading partners who also do business with the United States.The move “is likely to hit its biggest trading partners like China”, said Victoria Scholar, head of investment at Interactive Investor.European stock markets were mixed following a US consumer price reading that suggested inflation is easing — although not by enough to prompt the Federal Reserve bank into an early rate easing.”We’re beginning to see inflation retreat,” said Bret Kenwell, US investment analyst at the eToro trading platform.”December’s in-line CPI report may not be enough to move the Fed’s view toward a more aggressive rate-cutting policy. But as a cooling jobs environment persists, inflation may not be as much of a constraint when it comes to interest rate policy,” he said.New York stocks started the day in mildly negative territory, just shy of Monday’s record levels.Investors meanwhile mostly shrugged off worries about a US criminal probe of the Federal Reserve that comes amid heavy Trump pressure on Fed chair Jerome Powell to cut rates aggressively.The heads of major central banks threw their support behind the Fed and Powell on Tuesday, saying in a joint statement that it was “critical to preserve” their independence.Earlier Tuesday, Tokyo equities closed at a record high and the yen fell on speculation over a snap election in Japan which would allow Prime Minister Sanae Takaichi to capitalise on strong poll numbers.Takaichi was appointed Japan’s first woman prime minister in October and her cabinet enjoys an approval rating of around 70 percent.Seoul climbed 1.5 percent after South Korean chip giant SK hynix said it would spend 19 trillion won ($12.9 billion) building an advanced chip packaging plant, as the firm rides the global AI boom.- Key figures at around 1440 GMT -Brent North Sea Crude: UP 1.3 percent at $64.73 per barrelWest Texas Intermediate: UP 1.3 percent at $60.28 per barrelNew York – Dow: DOWN 0.2 percent at 49,503.60 pointsLondon – FTSE 100: DOWN 0.1 percent at 10,132.19Paris – CAC 40: DOWN 0.1 percent at 8,350.44Frankfurt – DAX: UP 0.3 percent at 25,482.08Hong Kong – Hang Seng Index: UP 0.9 percent at 26,848.47 (close)Shanghai – Composite: DOWN 0.6 percent at 4,138.76 (close)Tokyo – Nikkei 225: UP 3.1 percent at 53,549.16 (close)Euro/dollar: UP at $1.1668 from $1.1666 on MondayPound/dollar: UP at $1.3471 from $1.3466Dollar/yen: UP at 158.89 yen from 158.17 yenEuro/pound: DOWN at 86.61 pence from 86.63 pence

David Webb, a Hong Kong activist investor who campaigned for market transparency and democratic accountability, died on Tuesday aged 60, according to a statement posted on his social media.”It is with great sadness that we share that David M. Webb MBE passed away peacefully in Hong Kong on Tuesday January 13th, 2026 from metastatic prostate cancer,” the statement read.”David will be missed by family, many friends, and supporters. The family request privacy at this difficult time.”Webb was championed by retail investors, who saw him as a rare outlier in a corporate world known for vested interests and opacity — and a headache for regulators whose failings he laid bare.His online database, Webb-site, was an invaluable resource for regulators, investors, journalists and lawyers for decades until its shutdown late last year.Webb told AFP in 2024 that his ethos could be summed up in one word: “fairness”.”Fair treatment, which comes with giving people all the information that is relevant and giving them the power to make decisions,” he said.”And choice, whether it’s in economics or in finance or in politics.”Webb revealed his cancer diagnosis in 2020.He was awarded a Member of the Order of the British Empire (MBE) last year for his decades-long contributions to Hong Kong.- ‘Did my best’ -Born in Britain, Webb moved to Hong Kong from London in 1991 and retired from investment banking seven years later.”Having already made enough money to be financially secure, I was more interested in leaving some mark on the system than just dying rich,” Webb told AFP.His wide-ranging causes included corporate transparency and tax reform.He founded his non-profit website in 1998, which tracked the ins and outs of the financial sector and gave him a platform.His greatest triumph was his 2017 expose of the “Enigma Network”, involving cross-shareholdings in 50 listed companies, which had eluded regulators.The ensuing crash wiped out $6 billion in market value.Webb was a longtime member of Hong Kong’s Takeovers and Mergers Panel and at one time served as an independent director of the city’s stock exchange operator.He told AFP he often ran up against vested interests but “I don’t think I’m at war with anybody”.Webb, who became a Hong Kong permanent resident, believed that the former British colony’s success was its “differentiation” from mainland China.He addressed pro-democracy demonstrators during the city’s 2014 Umbrella Movement, speaking in favour of a “free market in leadership”.The activist investor also criticised Hong Kong authorities during the city’s huge and sometimes violent pro-democracy protests in 2019.In one of his last public appearances, Webb warned in May 2025 that the rise of authoritarianism in Hong Kong had threatened its core economic model.Looking back at his career, he told reporters he was “certain” he would stay in Hong Kong.”I wanted to make a contribution… I will die confident that I did my best.”

European and Asian stock markets diverged Tuesday as investors awaited key US inflation data while concerns about Iran lifted oil prices.Tokyo closed at a record high and the yen fell on speculation over a snap election in Japan.Paris and Frankfurt were in the red nearing the half-way mark, while London was flat. Wall Street finished at another record high Monday, as investors shrugged off worries about a US criminal probe of the Federal Reserve central bank.The heads of major central banks have thrown their support behind the US Fed and its chairman Jerome Powell, saying in a joint statement Tuesday that it was “critical to preserve” their independence.On Sunday, Powell took aim at escalating pressure from President Donald Trump’s administration to lower interest rates.Investors were treading water ahead of the release of US inflation data later in the day.”This is by far the most important metric for the Fed,” said Kathleen Brooks, research director at XTB trading group. “Today’s data is expected to reset inflation expectations and be a clear indicator of what the Fed should do this year and how many rate cuts to expect,” she added.In Asia, Tokyo’s Nikkei closed up 3.1 percent, driven by anticipation that Prime Minister Sanae Takaichi will capitalise on strong poll numbers by calling an election.Takaichi was appointed Japan’s first woman prime minister in October and her cabinet is enjoying an approval rating of around 70 percent.But her ruling bloc has only a slim majority in parliament’s powerful lower house, hindering her ambitious policy agenda.Hong Kong also gained, while Shanghai closed lower. Seoul climbed 1.5 percent after South Korean chip giant SK hynix said it would spend 19 trillion won ($12.9 billion) building an advanced chip packaging plant, as the firm rides the global AI boom.Oil prices rose after US President Donald Trump announced a 25-percent tariff on any country trading with Iran, ramping up pressure on Tehran and its friends over its violent crackdown on a wave of protests.Trump said in a social media post on Monday that the new levies would “immediately” hit the Islamic republic’s trading partners who also do business with the United States.The move “is likely to hit its biggest trading partners like China”, said Victoria Scholar, head of investment at Interactive Investor.In other company news, shares in Danish renewable energy firm Orsted climbed five percent after a US judge cleared the way for its offshore wind project to resume work in New England, nullifying a Trump administration order pausing the project.- Key figures at around 1100 GMT -London – FTSE 100: FLAT at 10,144.11 pointsParis – CAC 40: DOWN 0.5 percent at 8,316.16Frankfurt – DAX: DOWN 0.1 percent at 25,368.69Hong Kong – Hang Seng Index: UP 0.9 percent at 26,848.47 (close)Shanghai – Composite: DOWN 0.6 percent at 4,138.76 (close)Tokyo – Nikkei 225: UP 3.1 percent at 53,549.16 (close)New York – Dow: UP 0.2 percent at 49,590.20 (close)Euro/dollar: UP at $1.1667 from $1.1666 on MondayPound/dollar: UP at $1.3471 from $1.3466Dollar/yen: UP at 158.89 yen from 158.17 yenEuro/pound: DOWN at 86.62 pence from 86.63 penceBrent North Sea Crude: UP 1.2 percent at $64.65 per barrelWest Texas Intermediate: UP 1.3 percent at $60.28 per barrel

Swedish automaker Volvo Cars said Tuesday that it was pausing operations at a battery factory under construction, dismissing all 75 workers there, after failing to find a partner for the business.Volvo Cars, majority-owned by the Chinese conglomerate Geely, last year took full control of NOVO Energy, a subsidiary it had previously shared with Northvolt, a battery maker that went bankrupt in March.Northvolt’s failure, one of the biggest in Swedish corporate history, highlights the difficulties for EU battery producers facing by high costs and Chinese competition.Last month, the EU Commission said it would provide 1.5 billion euros ($1.76 billion) to support the bloc’s battery producers through interest-free loans.NOVO Energy, founded in 2021, was to build a mega battery factory supplying Volvo Cars and Geely-owned Polestar.But the business requires an external technology partner, which Volvo said it had failed to find after a search it started last year.”Until a new technology partner is secured, NOVO Energy can no longer proceed with its operations as previously planned,” Volvo Cars said. “As a result, NOVO Energy AB today announces layoffs that affect all positions in the company.”Volvo Cars said it maintained its “long-term ambition to produce batteries for its electric cars in the Gothenburg, Sweden, area”.But it said it was not possible to say when battery production could start, “or in what organisational structure this might happen”.

The heads of major central banks have thrown their support behind the US Federal Reserve and its chairman Jerome Powell, saying in a joint statement Tuesday that it was “critical to preserve” their independence. US prosecutors have issued subpoenas against Powell threatening a criminal indictment, an unprecedented move widely seen as an escalation of President Donald Trump’s campaign against the central bank.The inquiry prompted a rare public rebuke by Powell on Sunday, who vowed to continue setting monetary policy “without political fear or favor”.”We stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell,” said the statement signed by chiefs of the European Central Bank, the Bank of England and others.”The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve,” it added. “Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest.”The statement was also signed by the central bank chiefs of Australia, Brazil, Canada, Denmark, South Korea, Sweden and Switzerland, as well as the chairman of the Bank for International Settlements. The US inquiry concerns a $2.5 billion renovation of the Fed headquarters in Washington, which Trump has repeatedly attacked Powell of mismanaging. Last year, Trump floated the possibility of firing Powell over cost overruns for the historic buildings’ facelift.He has also slammed Powell as a “numbskull” and “moron” for the Fed’s policy decisions and not cutting borrowing costs more sharply.In his video statement Sunday, Powell dismissed the renovation and testimony as “pretexts”.”The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” he said.

Japanese Prime Minister Sanae Takaichi called on South Korean President Lee Jae Myung Tuesday to help “ensure regional stability”, as Beijing pressures Tokyo over its stance on Taiwan.The two leaders met in Takaichi’s picturesque home region of Nara in western Japan, days after Lee visited Chinese leader Xi Jinping in Beijing.They agreed to strengthen cooperation on economic security, regional and global issues, as well as artificial intelligence, according to South Korea’s presidential office.Looming in the background of the meeting was Japan’s heated diplomatic spat with China, triggered by Takaichi’s suggestion in November that Japan could intervene militarily if China attacks Taiwan.China, which regards Taiwan as its own territory, reacted angrily, blocking exports to Japan of “dual-use” items with potential military applications, fuelling worries in Japan that Beijing could choke supplies of much-needed rare earths.Takaichi said she told Lee that “while advancing Japan-South Korea relations, both countries should cooperate to ensure regional stability and fulfill their respective roles”.”As the environment surrounding both of our countries becomes ever more severe, our bilateral relations, as well as the cooperation among Japan, South Korea and the United States, are assuming greater importance,” she later told a news conference.At the beginning of his meeting with Takaichi, Lee said that cooperation between the two US allies “is more important than ever”.”In this increasingly complex situation and within this rapidly changing international order, we must continue to make progress toward a better future,” Lee added.They agreed to continue their “shuttle diplomacy” of regular meetings, according to Takaichi, as well as work towards the complete denuclearisation of North Korea.Lee and Takaichi, who both took office in 2025, last met in October on the sidelines of the APEC regional summit in Gyeongju, South Korea.It is Lee’s second visit to Japan since August, when he met Takaichi’s predecessor Shigeru Ishiba.- Bitter memories -Lee and Takaichi will have dinner Tuesday, before visiting one of Japan’s oldest temples in Nara on Wednesday.”Behind closed doors, the leaders will certainly discuss the current Japan-China crisis, as Beijing’s retaliatory measures, including export controls, will have an impact on Korea as well,” Benoit Hardy-Chartrand, an East Asian geopolitics expert at Temple University’s Tokyo campus told AFP, with the supply chains of the three nations deeply intertwined.Lee said in an interview with Japanese public broadcaster NHK aired on Monday that it was not his place to “intervene or get involved” in the Japan-China row.”From the standpoint of peace and stability in Northeast Asia, confrontation between China and Japan is undesirable,” he said. “We can only wait for China and Japan to resolve matters amicably through dialogue.”Hardy-Chartrand said he believed “the South Korean government felt that it was necessary for President Lee to visit Japan not too long after going to China, in order to demonstrate that Seoul is not favouring one side over the other”.Lee and Takaichi were also expected to discuss their relations with the United States because the unpredictable Trump “has put in doubt old certainties and highlighted the importance of strengthening their ties”, he said.On the bilateral front, bitter memories of Japan’s brutal occupation of the Korean peninsula from 1910 to 1945 have cast a long shadow over Tokyo-Seoul ties.Lee’s conservative predecessor Yoon Suk Yeol, who declared martial law in December 2024 and was removed from office, had sought to improve relations with Japan.Lee is also relatively more dovish towards North Korea than was Yoon, and has said that South Korea and Japan are like “neighbours sharing a front yard”.

Asian markets mostly rose on Tuesday with Tokyo closing at a record high on speculation over a snap election, while concerns about Iran pushed oil prices higher.The rallies followed another record finish on Wall Street overnight, where investors shrugged off worries about a US criminal probe of the Federal Reserve central bank.Tokyo’s Nikkei closed 3.1 percent up, driven by anticipation that Prime Minister Sanae Takaichi will capitalise on strong poll numbers by calling an election.Takaichi became Japan’s first woman prime minister in October and her cabinet has an approval rating of around 70 percent.But her ruling bloc only has a slim majority in parliament’s powerful lower house, hindering her ambitious policy agenda.Tokyo’s gains were mirrored by increases in Hong Kong, Sydney, Singapore and Malaysia. Shanghai was down at the close, with Wellington, Mumbai, Bangkok and Manila also in the red.London and Frankfurt were flat at the open, with Paris in the red.Seoul climbed 1.5 percent after South Korean chip giant SK hynix said it would spend 19 trillion won ($12.9 billion) building an advanced chip packaging plant, as the firm rides the global AI boom.It came after New York’s Dow and S&P 500 ended at records for a second straight day.The tech-rich Nasdaq index also bounced back from early losses after Sunday night’s disclosure of the US Department of Justice probe into the Federal Reserve.Broad optimism over the global economy and technological advances such as artificial intelligence have buoyed market sentiment in recent months.Oil prices rose after US President Donald Trump announced a 25 percent tariff on any country trading with Iran, ramping up pressure on Tehran over its violent crackdown on a wave of protests.Michael Wan at MUFG noted that Iran makes up three percent of global oil production, with Venezuela supplying around one percent “as a rough rule of thumb”.”China stands out as the top trading partner for Iran, both across exports and imports, and also in terms of its position as the top importer of Iranian crude oil,” he said.Trump said in a social media post on Monday that the new levies would “immediately” hit the Islamic republic’s trading partners who also do business with the United States.Taipei was up 0.5 percent after the democratic island said it had reached a “general consensus” with Washington on a trade deal, following months of talks.Taiwan and the United States began negotiations in April to hash out a trade deal after Trump slapped a 32 percent tariff on Taiwanese exports, which was later lowered to 20 percent, as part of his sweep of measures against dozens of trade partners.- Key figures at around 0815 GMT -Hong Kong – Hang Seng Index: UP 0.9 percent at 26,848.47 (close)Shanghai – Composite: DOWN 0.6 percent at 4,138.76 (close)Tokyo – Nikkei 225: UP 3.1 percent at 53,549.16 (close)West Texas Intermediate: UP 0.5 percent at $59.81 per barrelBrent North Sea Crude: UP 0.5 percent at $64.18 per barrelEuro/dollar: DOWN at $1.1658 from $1.1666 on MondayPound/dollar: UP at $1.3468 from $1.3466Dollar/yen: UP at 158.86 yen from 158.17 yenEuro/pound: DOWN at 86.56 pence from 86.63 penceLondon – FTSE 100: FLAT at 10,140.70New York – Dow: UP 0.2 percent at 49,590.20 (close)

Japanese Prime Minister Sanae Takaichi met with South Korea’s President Lee Jae Myung for talks on Tuesday aimed at demonstrating their cordial ties as Beijing pressures Tokyo over its stance on Taiwan.The two leaders are in Takaichi’s picturesque home region of Nara in western Japan, days after Lee visited Chinese leader Xi Jinping in Beijing.Looming in the background is Japan’s heated diplomatic spat with China, triggered by Takaichi’s suggestion in November that Japan could intervene militarily if China attacks Taiwan.China, which regards Taiwan as its own territory, reacted angrily, blocking exports to Japan of “dual-use” items with potential military applications, fuelling worries in Japan that Beijing could choke supplies of much-needed rare earths.”In this increasingly complex situation and within this rapidly changing international order, we must continue to make progress toward a better future,” Lee said at the beginning of the meeting with Takaichi.”Therefore, cooperation between our two countries is more important than ever”.Takaichi said she told Lee that that “while advancing Japan-South Korea relations, both countries should cooperate to ensure regional stability and fulfill their respective roles”.The two US allies have already agreed to strengthen cooperation on economic security, regional and global issues, and artificial intelligence, according to South Korea’s presidential office.They are also expected to compare notes on Washington after President Donald Trump’s unpredictable tariffs and “America First” approach, analysts said.Tense regional geopolitics could provide Takaichi and Lee “further impetus for wanting to build stronger relations”, said Benoit Hardy-Chartrand, an East Asian geopolitics expert at Temple University’s Tokyo campus.Lee and Takaichi, who both took office in 2025, last met in October on the sidelines of the APEC regional summit in Gyeongju in South Korea.It is Lee’s second visit to Japan since August, when he met Takaichi’s predecessor Shigeru Ishiba.After the summit meeting, Lee and Takaichi will have dinner Tuesday to discuss regional and global issues.”Behind closed doors, the leaders will certainly discuss the current Japan-China crisis, as Beijing’s retaliatory measures, including export controls, will have an impact on Korea as well,” Hardy-Chartrand told AFP, with the supply chains of the three nations deeply intertwined.Lee said in an interview with Japanese public broadcaster NHK aired on Monday that it was not his place to “intervene or get involved” in the Japan-China row.”From the standpoint of peace and stability in Northeast Asia, confrontation between China and Japan is undesirable,” he said. “We can only wait for China and Japan to resolve matters amicably through dialogue.”- Bitter memories -Hardy-Chartrand said he believed “the South Korean government felt that it was necessary for President Lee to visit Japan not too long after going to China, in order to demonstrate that Seoul is not favouring one side over the other”.Lee and Takaichi are also expected to discuss their relations with the United States because the unpredictable Trump “has put in doubt old certainties and highlighted the importance of strengthening their ties”, he said.Yee Kuang Heng, a professor in international security at the University of Tokyo, did not expect Lee to bring any particular message from Xi to Takaichi.”However, the two leaders may discuss the fallout from China’s economic coercion that both ROK (South Korea) and Japan have experienced over the years,” Heng told AFP.”Takaichi will be wary of China’s wedge strategy designed to drive divisions between ROK and Japan and will want to re-emphasise common ground shared between Seoul and Tokyo.”On the bilateral front, bitter memories of Japan’s brutal occupation of the Korean peninsula from 1910 to 1945 have cast a long shadow over Tokyo-Seoul ties.Lee’s conservative predecessor Yoon Suk Yeol, who declared martial law in December 2024 and was removed from office, had sought to improve relations with Japan.Lee is also relatively more dovish towards North Korea than was Yoon, and has said that South Korea and Japan are like “neighbours sharing a front yard”.