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Asian markets diverged Tuesday as bargain buying after recent losses played against ongoing worries about the outlook for the global economy and the impact of a second Donald Trump presidency.A report saying the incoming US leader’s economics team was considering slowly hiking tariffs on imports provided support to traders and put a cap on the dollar’s latest surge, while news of fresh curbs on AI chips to China appeared to have little immediate impact.However, traders remain concerned that his pledges to cut taxes, regulations and immigration continue to dampen sentiment with warnings that the measures will revive inflation.Traders have slashed their expectations on how many times the Federal Reserve will cut interest rates through 2025 to one, from four predicted last year, while there is even talk that the next move could be a hike owing to still-sticky inflation and Trump concerns.Data on Friday showing the world’s top economy created far more jobs than forecast in December dealt yet another blow to the chances of another reduction at the Fed’s next meeting and sent equity markets deep into the red.Wall Street staged a small recovery Monday, with the Dow and S&P ending in positive territory, but tech titans including big-hitter Nvidia dragged the Nasdaq down again.Asian markets fluctuated through the day.Hong Kong and Shanghai advanced as China’s securities regulator said it was looking at ways to provide more stability to markets after another run of poor performances sparked by worries over the world’s number two economy and Trump’s threatened tariffs.Sydney, Seoul, Wellington, Taipei and Mumbai also rose, though there were losses in Singapore, Manila, Bangkok and Jakarta, with Tokyo the biggest loser as traders returned from a long weekend to play catch-up with Monday’s sell-off.Paris and Frankfurt rose at the open, while London was flat.The dollar eased back against its peers after Bloomberg reported that members of the US president-elect’s team were looking at a gradual increase in tariffs in a bid to boost their negotiating hand and tamper inflationary pressures.Traders were spooked when he said soon after his re-election that he would impose huge levies on China, Canada and Mexico as soon as he took office.But while the dollar eased, the pound remained stuck at levels not seen since the end of 2023. The euro was near its weakest since late 2022, with fears it could return to parity with the dollar.The yen edged up against the greenback as the yield of Japan’s 40-year government bond hit its highest since being launched in 2007, with debate returning to whether the country’s central bank will hike interest rates at next week’s policy meeting.Eyes are now on the release of US inflation data this week and the beginning of the release of corporate reports.”This earnings season will set the tone for financial stocks in 2025, but the stakes are high,” said Charu Chanana, chief investment strategist at Saxo Markets.”Even with solid fourth-quarter results, the macro backdrop — characterised by lingering inflation concerns, steeper yields, and recalibrated Fed expectations — may weigh on sentiment.”With valuations already elevated after a strong 2024, further stock gains will require more than just decent earnings. Robust outlooks, ongoing loan demand, and resilient consumer credit will be critical to sustaining investor confidence.”She added that “uncertainty around Fed policy and a potential shift in fiscal priorities under Trump’s new administration will keep markets on edge”.- Key figures around 0815 GMT -Tokyo – Nikkei 225: DOWN 1.8 percent at 38,474.30 (close)Hong Kong – Hang Seng Index: UP 1.8 percent at 19,219.78 (close)Shanghai – Composite: UP 2.5 percent at 3,240.94 (close)London – FTSE 100: FLAT at 8,220.93Euro/dollar: UP at $1.0255 from $1.0224 on MondayPound/dollar: UP at $1.2209 from $1.2180Dollar/yen: DOWN at 157.53 yen from 157.65 yenEuro/pound: UP at 83.99 pence from 83.90 penceWest Texas Intermediate: DOWN 0.6 percent at $78.38 per barrelBrent North Sea Crude: DOWN 0.6 percent at $80.52 per barrelNew York – Dow: UP 0.9 percent at 42,297.12 (close)

Kyoto authorities announced Tuesday plans to hike lodging taxes, as Japan’s ancient capital seeks to assuage grumbles from locals about too many tourists.Lured by its myriad sights and a weak yen, Japan has seen foreign tourism numbers explode in recent years, with arrivals in 2024 expected to have hit a record of more than 35 million.But like other hotspots worldwide such as Venice in Italy or Maya Bay in Thailand, this is not universally welcome, particularly in tradition-steeped Kyoto.The city, which is a modest bullet train ride away from Tokyo — with a view of Mount Fuji on the way — is famed for its kimono-clad geisha performers and Buddhist temples.Residents have complained of disrespectful tourists harassing the geisha like paparazzi in their frenzy for photos, as well as causing traffic congestion and littering.For rooms costing between 20,000 and 50,000 yen ($127-317) per night, visitors will now see their tax double to 1,000 yen ($6.35) per person per night, under the new plans.For accommodation over 100,000 yen per night it will soar tenfold to 10,000 yen. The new levies will take effect next year, subject to approval from the city assembly.”We intend to hike accommodation tax to realise ‘sustainable tourism’ with a high level of satisfaction for citizens, tourists and businesses,” a statement said.- Cigarette butts -Tensions are highest in the Gion district, home to teahouses where “geiko” — the local name for geisha — and their “maiko” apprentices perform traditional dances and play instruments.Last year authorities moved to ban visitors from entering certain narrow private alleys in Gion after pressure from a council of local residents.One council member told local media about an instance of a maiko’s kimono being torn and another who had a cigarette butt put in her collar.In 2019, the Gion district council put up signs saying “no photography on private roads” warning of fines of up to 10,000 yen.”I appreciate tourists visiting the city, but there are also some downsides like the impact on the environment,” resident Daichi Hayase told AFP, welcoming the new taxes.”But it doesn’t mean the city should impose excessive taxes. Tourists are coming despite painful inflation,” the 38-year-old photographer said.”If there’s a burden on the infrastructure, I do think taxing tourists is a good idea,” said Australian tourist Larry Cooke, 21.But he said that the city had to find the “right balance”.- Fuji blocked -Tourism has been booming for over a decade in Japan, with foreign arrivals rising five-fold between 2012 and when the Covid pandemic torpedoed foreign travel in 2020.Since restrictions were lifted, and the government is hoping to welcome 60 million tourists per year by 2030, almost double last year’s expected total.Authorities have also taken steps beyond Kyoto, including introducing an entry fee and a daily cap on the number of hikers climbing Mount Fuji.Last year a barrier was briefly erected outside a convenience store with a spectacular view of the famous snow-capped volcano that had become a magnet for photo-hungry visitors.And in December Ginzan Onsen, a Japanese hot spring town with made-for-Instagram snowy scenes began stopping anyone arriving after 8:00 pm if they don’t have a hotel booked.

Donald Trump’s second presidential term promises a return to tariffs as he pressures partners and rivals to tackle everything from migration to drug trafficking, while protecting US industries — in moves that could trigger new trade wars.Even before taking office, Trump has raised the prospect of fresh levies on companies, countries and groups of states as he seeks to implement his agenda.He has vowed tariffs on Mexico, Canada and China until they crack down on fentanyl and border crossings, and he threatened “economic force” against Ottawa after suggesting Canada should become the 51st US state.Trump also warned of 100 percent tariffs on BRICS nations — a bloc including Brazil, Russia, India, China and South Africa — if they create a rival to the US dollar.New trade wars could rock the global economy, worsen tensions with Beijing and upend ties with allies.US manufacturers, farmers and small business owners await his first moves, girding for higher import costs on anything from batteries to wines, while bracing for retaliation.”I’m not necessarily against all tariffs,” said Mark Pascal, a restaurant owner based in New Jersey.He said he understands the rationale of taxing a country that unfairly suppresses prices.But “we’re concerned about any tariff that would apply broadly to wine and spirits, which is an industry that is not unfairly competing in any way,” added Francis Schott, who co-runs restaurants with Pascal.Trump introduced a range of duties in his first term, including on steel and aluminum, and on Chinese imports as he waged an all-out trade war on the world’s second biggest economy.In 2019, he imposed tariffs on European food and drinks as Washington and Brussels clashed over aviation subsidies.While these were later suspended, restaurateurs worry their return would batter small establishments.”It raised our costs, so it raised our prices,” said Pascal.- Global impact -Trump has used tariffs as a bargaining tool and will probably do so again, said Joshua Meltzer of the Brookings Institution.But China is signaling pushback and Europe is more prepared policy-wise, he told AFP.Governments appear to have “reached a similar conclusion that they are better off threatening retaliation at least at this stage, rather than capitulating,” Meltzer added.EY chief economist Gregory Daco warned that tariffs and other measures could tip the world economy into stagflation — stagnation with elevated inflation — if pursued to their fullest.Trump’s other promises include an across-the-board levy of 10 percent or more, with a steeper rate on China.- Growth risks -Domestically, Trump has touted tariffs as a means to protect US manufacturing, coupled with policies like tax cuts and deregulation that he says will spur growth.His Treasury secretary nominee Scott Bessent said in a November interview that tariffs would not be inflationary even if there were a “one-time price adjustment.”But Daco estimates higher import costs could lift consumer price inflation by 1.2 percentage points after a year.”The long-run impact is that it shrinks the US economy and it reduces the value of our incomes,” said Erica York of the Tax Foundation.While the Congressional Budget Office estimated a uniform 10 percent hike and added 50 percent on Chinese goods would slash deficits, this could also lower real GDP.- Emergency? -Analysts expect Trump could implement tariffs quickly using the International Emergency Economic Powers Act.This allows the president to regulate imports during a national emergency, although it could be hindered by lawsuits.A tried-and-tested method would be the trade law, with Trump previously using Section 301 as justification for tariffs.But this takes more time as it calls for a government probe.He could also use Section 232 of the Trade Expansion Act to hike tariffs on goods with national security implications.

The United States unveiled new export rules Monday on chips used for artificial intelligence, furthering efforts to make it tough for China and other rivals to access the advanced technology in Joe Biden’s final days as president.The announcement of the restrictions drew a fiery pushback from Beijing and prompted US chip industry criticism, while the European Union expressed its “concern” over the approach.In recent years, Washington has expanded its efforts to curb exports of state-of-the-art chips to China, which can be used in AI and weapons systems, as Beijing’s tech advancements spark concern among US policymakers.”The US leads the world in AI now — both AI development and AI chip design — and it’s critical that we keep it that way,” Commerce Secretary Gina Raimondo told reporters.The new rules update controls on chips, requiring authorizations for exports, re-exports and in-country transfers — while also including a series of exceptions for countries considered friendly to the United States.If a country is not exempted — and most are not — they will face a cap on imports of advanced chips.AI data centers meanwhile will need to comply with enhanced security parameters to be able to import chips.The restrictions also tighten rules around the sharing of cutting-edge AI models.China’s Commerce Ministry called the new policy “a flagrant violation” of international trade rules, vowing that Beijing would “firmly safeguard” its interests.The European Union meanwhile expressed concern about US measures and stressed that Europe did not represent a “security risk.”- US competitiveness -The latest move drew industry criticism and warnings that it would hurt US competitiveness.Semiconductor Industry Association chief executive John Neuffer said: “We’re deeply disappointed that a policy shift of this magnitude and impact is being rushed out the door days before a presidential transition and without any meaningful input from industry.”He added in a statement that the rule could cause “lasting damage to America’s economy and global competitiveness” by ceding key markets to rivals.Chip titan Nvidia said in a blog post that “while cloaked in the guise of an ‘anti-China’ measure, these rules would do nothing to enhance US security.”In a white paper released Monday, OpenAI said the federal government should help the AI industry grow, adding that “responsibly exporting” cutting-edge models to allies and partners will help them stand up their own AI ecosystems.- Trump decision? -The rules make it “hard for our strategic competitors to use smuggling and remote access to evade our export control,” White House National Security Advisor Jake Sullivan said.They also create “incentives for our friends and partners around the world to use trusted vendors for advanced AI,” he added.The new rules will take effect in 120 days, Raimondo said, giving President-elect Trump’s incoming administration time to potentially make changes.Freezing the rule, however, could risk allowing China to stockpile US hardware, a senior US official told reporters.And the Computer & Communications Industry Association cautioned that the rule will hamper the ability of US firms to deploy advanced semiconductors in data centers abroad.In its post, Nvidia stressed that the first Trump term showed how the United States “wins through innovation, competition and by sharing our technologies with the world — not by retreating behind a wall of government overreach.”Trump put heavy tariffs on China during his first presidential term.But his backers in Silicon Valley could also see the rules as an undue burden on their ability to export products.On Monday, Nvidia shares lost around two percent.The Information Technology and Innovation Foundation (ITIF) said that pressuring countries to choose between Washington and Beijing could alienate partners and boost China’s position in global AI.”Many countries may opt for the side offering them uninterrupted access to the AI technologies vital for their economic growth and digital futures,” said ITIF vice president Daniel Castro.

Global markets mostly retreated on Monday after traders trimmed bets on US Federal Reserve rate cuts and oil extended a rally sparked by new sanctions on Russia’s energy sector.Equities had tumbled Friday following strong US jobs data that traders viewed as lessening the odds of Federal Reserve interest rate cuts in 2025.Wall Street began the day looking poised to continue that trend. But two of the three major indices finished in positive territory.LBBW’s Karl Haeling said the market is less overbought compared with a few weeks ago after the sluggish beginning to 2025 equity trading.”The market is showing less sensitivity to higher bond yields,” Haeling said.The Nasdaq finished the day down 0.4 percent, in the red but above its session lows.Stocks losing ground included Nvidia, which criticized fresh curbs on AI chips to China announced by the outgoing Biden administration.Earlier in the day, bourses in London, Paris and Frankfurt all finished lower.In Asia on Monday, Hong Kong and Shanghai stocks fell but pared initial losses as data showed Chinese exports and imports topped forecasts in December.Tokyo’s stock market was closed for a holiday.Keenly awaited data on Friday showed the US economy created 256,000 jobs last month, a jump from November’s revised 212,000 and smashing forecasts of 150,000-160,000.It follows data last week that pointed to a rise in inflation expectations, and adds to concerns that President-elect Donald Trump’s plans to slash taxes, regulations and immigration will reignite prices.”The robust labor market, along with the recent pickup in inflation, are both making it difficult for the Federal Reserve to justify further rate cuts,” said David Morrison, senior market analyst at Trade Nation.”In fact, some analysts now believe the Fed’s next move may be a hike,” he added.This week’s calendar includes earnings from large banks, as well as economic releases on US inflation and retail sales.Both major crude contracts extended Friday’s gains — after the United States and Britain announced new sanctions against Russia’s energy sector, including oil giant Gazprom Neft.”The spike in oil prices could pose additional challenges for central banks, particularly the Federal Reserve, if it leads to higher inflation,” said Patrick Munnelly, partner at broker Tickmill Group.  On currency markets, the pound was wallowing around lows not seen since the end of 2023 owing to fading hopes for US rate cuts as well as worries about the British economy. The euro struggled at its weakest level since November 2022.- Key figures around 2130 GMT -New York – Dow: UP 0.9 percent at 42,297.12 (close)New York – S&P 500: DOWN 0.2 percent at 5,836.22 (close)New York – Nasdaq Composite: DOWN 0.4 percent at 19,088.10 (close)London – FTSE 100: DOWN 0.3 percent at 8,224.19 (close)Paris – CAC 40: DOWN 0.3 percent at 7,408.64 (close)Frankfurt – DAX: DOWN 0.4 percent at 20,132.85 (close)Hong Kong – Hang Seng Index: DOWN 1.0 percent at 18,874.14 (close)Shanghai – Composite: DOWN 0.3 percent at 3,160.76 (close)Tokyo – Nikkei 225: Closed for a holidayEuro/dollar: DOWN at $1.0224 from $1.0244 on FridayPound/dollar: DOWN at $1.2180 from $1.2207Dollar/yen: DOWN at 157.65 yen from 157.73 yenEuro/pound: DOWN at 83.90 pence from 83.92 penceBrent North Sea Crude: UP 1.6 percent at $81.01 per barrelWest Texas Intermediate: UP 2.9 percent at $78.82 per barrelburs-jmb/bs

Global markets slid Monday after traders trimmed bets on US Federal Reserve rate cuts and oil extended a rally sparked by new sanctions on Russia’s energy sector.An outsized US jobs report Friday dealt another blow to hopes for more interest rate cuts in 2025, and was followed by hefty losses on Wall Street. Wall Street’s main three indices fell further at the start of trading on Monday, with the tech-heavy Nasdaq dropping 1.4 percent after the United States announced additional export restrictions on AI chip exports.Shares in tech giant Nvidia, whose chips are prized by firms developing AI applications, fell by 3.6 percent as trading got underway in New York.Shares in Dutch firm ASML, which makes the machines that create the most advanced chips, slid by 2.5 percent in Amsterdam.In Europe, London, Paris and Frankfurt were down in afternoon trading.In Asia on Monday, Hong Kong and Shanghai stocks fell but pared initial losses as data showed Chinese exports and imports topped forecasts in December.Tokyo’s stock market was closed for a holiday.Keenly awaited data on Friday showed the US economy created 256,000 jobs last month, a jump from November’s revised 212,000 and smashing forecasts of 150,000-160,000.”Given a resilient labour market, we now think the Fed cutting cycle is over,” said Bank of America’s Aditya Bhave and other economists.It follows data last week that pointed to a rise in inflation expectations, and adds to concerns that President-elect Donald Trump’s plans to slash taxes, regulations and immigration will reignite prices.”The robust labour market, along with the recent pickup in inflation, are both making it difficult for the Federal Reserve to justify further rate cuts,” said David Morrison, senior market analyst at Trade Nation.”In fact, some analysts now believe the Fed’s next move may be a hike,” he added.Those inflation concerns have seen US bond yields climb higher. Higher borrowing costs tend to weigh on equities as it implies tighter margins and a more difficult sales environment.”It is evident now that the stock market isn’t liking what it is seeing in the Treasury market,” said Briefing.com analyst Patrick O’Hare.He said the release the producer and consumer inflation figures this week “will either soothe or exacerbate the market’s inflation concerns”.O’Hare said the earnings of big banks, which begin reporting on Wednesday, will likewise influence concerns about the impact of rising rates on lenders and the economy.Surging oil prices added to unease, with both main contracts extending Friday’s gains — after the United States and Britain announced new sanctions against Russia’s energy sector, including oil giant Gazprom Neft.”The spike in oil prices could pose additional challenges for central banks, particularly the Federal Reserve, if it leads to higher inflation,” said Patrick Munnelly, partner at broker Tickmill Group.  However, analysts do not expect prices to spike too much in the longer term as global oil production is expected to meet demand. On currency markets, the pound was wallowing around lows not seen since the end of 2023 owing to fading hopes for US rate cuts as well as worries about the British economy. The euro struggled at its weakest level since November 2022.- Key figures around 1430 GMT -New York – Dow: DOWN 0.2 percent at 41,874.71 pointsNew York – S&P 500: DOWN 0.9 percent at 5,777.79New York – Dow: DOWN 1.4 percent at 18,895.64London – FTSE 100: DOWN 0.7 percent at 8,194.89 Paris – CAC 40: DOWN 0.6 percent at 7,387.64Frankfurt – DAX: DOWN 0.7 percent at 20,077.13Hong Kong – Hang Seng Index: DOWN 1.0 percent at 18,874.14 (close)Shanghai – Composite: DOWN 0.3 percent at 3,160.76 (close)Tokyo – Nikkei 225: Closed for a holidayEuro/dollar: DOWN at $1.0212 from $1.0244 on FridayPound/dollar: DOWN at $1.2140 from $1.2210Dollar/yen: DOWN at 157.18 yen from 157.74 yenEuro/pound: UP at 84.10 pence from 83.90 penceBrent North Sea Crude: UP 1.0 percent at $80.56 per barrelWest Texas Intermediate: UP 1.3 percent at $77.59 per barrelburs-rl/lth

Asian and European markets sank Monday after an outsized US jobs report dealt another blow to hopes for more interest rate cuts, while oil extended a rally sparked by new sanctions on Russia’s energy sector.The equity sell-off tracked hefty losses on Wall Street, where all three main indexes finished more than one percent lower as the new trading year continued to falter.Keenly awaited data on Friday showed the US economy created 256,000 jobs last month, a jump from November’s revised 212,000 and smashing forecasts of 150,000-160,000.The figures followed news that the crucial US services sector picked up in December, with the prices component soaring more than expected to the highest level since last January, while another report showed job openings hit a six-month high in November.Hopes that the Federal Reserve will continue cutting rates through 2025 — having made three trims last year — were dashed when in December it indicated just two reductions over the next 12 months, down from four tipped previously.The hawkish pivot came as inflation continues to hover above the bank’s two percent target, while there are also concerns that president-elect Donald Trump’s plans to slash taxes, regulations and immigration will reignite prices.”Given a resilient labour market, we now think the Fed cutting cycle is over,” said Bank of America’s Aditya Bhave and other economists.”Inflation is stuck above target: in the December (summary of economic projections), the Fed not only marked up its base case for 2025 significantly, but also indicated that inflation risks were skewed to the upside. Economic activity is robust. “We see little reason for additional easing.”Markets in Sydney, Singapore, Seoul, Mumbai, Taipei, Manila, Bangkok and Jakarta all sank. Tokyo was closed for a holiday.Hong Kong and Shanghai also fell but pared initial losses as data showed Chinese exports and imports topped forecasts in December.London, Paris and Frankfurt fell at the open.On currency markets the pound was wallowing around lows not seen since the end of 2023 owing to fading hopes for US rate cuts as well as worries about the British economy. The euro struggled at its weakest since November 2022.Surging oil prices added to unease, with both main contracts jumping more than percent — extending Friday’s gains of more than three percent — after the United States and Britain announced new sanctions against Russia’s energy sector, including oil giant Gazprom Neft.However, commentators do not expect prices to spike too much, even amid speculation that Trump will hit Iran with fresh sanctions.”A significant and perhaps underpriced risk to crude oil prices is the potential for supply to outstrip demand, especially given OPEC+’s intention to reintroduce barrels to the market,” said Stephen Innes at SPI Asset Management.”Even if US sanctions curtail Iranian oil production by 1.5 million barrels a day — a scenario similar to that during Trump’s previous presidency — this amount could easily be compensated by OPEC+, which is currently holding back 5.8 million barrels a day, or 5.3 percent of the total global production capacity.”However, he added that some issues could lead crude to rocket, including an escalation of the Middle East crisis, a significant reduction in Russian output or exports and a strategic about-face by OPEC+ to slash production.- Key figures around 0815 GMT -Hong Kong – Hang Seng Index: DOWN 1.0 percent at 18,874.14Shanghai – Composite: DOWN 0.3 percent at 3,160.76 (close)London – FTSE 100: DOWN 0.3 percent at 8,224.50Tokyo – Nikkei 225: Closed for a holidayEuro/dollar: DOWN at $1.0216 from $1.0244 on FridayPound/dollar: DOWN at $1.2140 from $1.2210Dollar/yen: DOWN at 157.39 yen from 157.74 yenEuro/pound: UP at 84.17 pence from 83.90 penceWest Texas Intermediate: UP 1.5 percent at $77.75 per barrelBrent North Sea Crude: UP 1.4 percent at $80.86 per barrelNew York – Dow: DOWN 1.6 percent at 41,938.45 (close)

China’s exports surged to a record high in 2024, providing a much-needed boost for the economy as the prospect of biting tariffs imposed by US president-elect Donald Trump looms.Overseas shipments represented a rare bright spot for Beijing last year as sluggish domestic consumption and a prolonged crisis in the property sector dragged on growth.But Trump, who imposed sweeping tariffs on China during his first term in office, has threatened even heftier levies when he returns to the White House next week.Observers said that a recent surge in China’s exports has likely been boosted by companies ramping up stockpiles ahead of Trump’s second term amid fears of a painful trade war.”In 2024, China’s total exports exceeded 25 trillion yuan for the first time, reaching 25.45 trillion yuan ($3.47 trillion), an increase of 7.1 percent year-on-year,” Lu Daliang, spokesman for the General Administration of Customs, said at a news conference.Total imports, meanwhile, rose 2.3 percent to 18.39 trillion yuan, Lu said.Combined trade swelled five percent to reach a record 43.85 trillion yuan, said Wang Lingjun, vice minister of the customs administration.”China’s position as the world’s largest goods trading nation has become even more secure,” Wang added.Official customs data showed Monday that exports in December jumped 10.7 percent year-on-year, comfortably outperforming a forecast of 7.5 percent in a Bloomberg survey of economists.”We expect shipments to remain strong in the coming months, as US importers continue to stockpile Chinese goods ahead of tariff hikes,” Zichun Huang, China economist at Capital Economics, wrote in a note.”But exports are likely to weaken later this year as President Trump puts his tariff threats into action,” she added.Imports last month grew one percent year-on-year, customs data showed, compared with a Bloomberg forecast of a one percent decline.- ‘Resilient’ -Exports have historically represented a key driver of activity for the world’s number two economy, which officials say is likely to have grown five percent last year.During the most recent US presidential campaign, Trump threatened to slap a 60 percent tariff on all Chinese goods.China’s exports “are likely to stay resilient in the near-term”, wrote Huang.”But outbound shipments will weaken later this year if Trump follows through,” she wrote, adding that the new US tariffs “could reduce export volumes by about three percent and shave roughly 0.5 percent off China’s GDP.”Since September, Beijing has announced some of its most aggressive policy measures in years as officials try to kickstart the economy, which has so far failed to achieve a full post-pandemic recovery.The steps have included the cancellation of certain restrictions on homebuying, subsidies for the purchasing of household items and key interest rate cuts.Exports have historically represented a key driver of activity for the world’s number two economy, which officials say is likely to have grown five percent last year.”With the help of strong exports and macro policy easing, the economic momentum likely stabilised,” wrote Zhiwei Zhang, chief economist at Pinpoint Asset Management, in a note Monday following the publication of the trade figures.The government is due to release 2024 economic growth data later this week. President Xi Jinping has recently expressed confidence that the country achieved an official target of around five percent.Many economists say more policy support targeted at incentivising domestic consumption is needed to restore China’s economic health.The country narrowly avoided a slip into deflation in December, official figures showed last week, suggesting that recent measures have not yet produced a robust rebound in domestic spending.Low inflation may lead to an increase of real interest rates, said Yue Su, principal economist at the Economist Intelligence Unit. “So monetary easing policy needs to be more proactive to really reduce the borrowing cost of enterprises, which is important for a broad recovery of the economy,” she told AFP.The International Monetary Fund has previously predicted China’s economy would grow 4.8 percent in 2024 before slowing to 4.5 percent this year.

Japanese Prime Minister Shigeru Ishiba told US President Joe Biden that his blocking of Nippon Steel’s takeover of US Steel raised “strong” concerns in both countries, local media reported Monday.The comments came in a three-way call with the president of the Philippines that according to the White House also touched on China’s “dangerous and unlawful” behaviour in the region.Citing national security concerns, Biden nixed Nippon Steel’s $14.9 billion acquisition of US Steel earlier this month, irking close ally Japan where the United States has some 54,000 military personnel.”I said that strong voices of concerns are being raised not just in Japan but also in the US business community, and I urged (Biden) to dispel these feelings,” Ishiba told reporters after the call on Monday.Blocking a takeover by a Japanese firm is highly unusual and both firms have launched legal action, accusing the outgoing US president of “illegal interference”.Nippon Steel had touted the acquisition as a lifeline for its struggling US rival, but opponents warned the Japanese group would slash jobs despite its assurances to the contrary.The takeover, which was announced in 2023, came in the run-up to last year’s US presidential election and proved a political flashpoint.US Steel is based in the swing state of Pennsylvania and both Donald Trump and Kamala Harris opposed the transaction.- ‘Big picture’ -Japanese firms invested almost $800 billion in the United States in 2023, more than any other country, and 14.3 percent of the total, according to official US data.US firms are also the biggest outside investors in Japan.Japan is also a close strategic ally for Washington as it seeks to counter China asserting its presence in contested areas of the South China Sea.Both steel companies said Sunday that US authorities have extended the deadline for unwinding the acquisition until June 18.Japan’s Foreign Minister Takeshi Iwaya, who will attend Trump’s inauguration as US president on January 20, said it was important not to undermine the “big picture” of bilateral ties.Iwaya also said that while in Washington he would seek talks with Marco Rubio, slated to be Trump’s Secretary of State, and to lay the groundwork for a meeting between Ishiba and Trump.Kyodo News cited government sources as saying that this could take place before mid-February.During Trump’s first term, he and Japan’s then-prime minister Shinzo Abe, enjoyed warm relations. In December, Trump met Abe’s widow at Mar-a-Lago.- US allies -In recent years, with an eye on China, Washington has sought to improve strategic relations with both Japan and the Philippines as well as with South Korea. Biden, Philippines President Ferdinand Marcos and with Ishiba’s predecessor Fumio Kishida held talks at the White House last April.In another first, in 2023 Biden hosted Kishida and South Korean President Yoon Suk Yeol — who briefly imposed martial law last month — at Camp David.Last year the Philippines ratified a key defence pact with Japan, which allows them to deploy troops on each other’s soil. On Monday Biden, Marcos and Ishiba “discussed trilateral maritime security and economic cooperation, as well as the People’s Republic of China’s dangerous and unlawful behaviour in the South China Sea,” the White House said.”The three Leaders agreed on the importance of continued coordination to advance a free and open Indo-Pacific,” said a statement, which made no mention of the steel deal.Marcos’s office said that the call was to “reaffirm their commitment to strengthening cooperation in areas such as economic growth, emerging technologies, climate action, clean energy and regional security”.Biden also “highlighted the ‘historic progress’ made, particularly in maritime security, economic security and technological collaboration” between the three countries, the Philippines statement said.

Asian markets tumbled Monday after an outsized US jobs report dealt another blow to hopes for more interest rate cuts, while oil extended a rally sparked by new sanctions on Russia’s energy sector.The equity sell-off tracked hefty losses on Wall Street, where all three main indexes finished more than one percent lower as the new trading year continued to falter.Keenly awaited data on Friday showed the US economy created 256,000 jobs last month, a jump from November’s revised 212,000 and smashing forecasts of 150,000-160,000.The figures followed news that the crucial US services sector picked up in December, with the prices component soaring more than expected to the highest level since last January, while another report showed job openings hit a six-month high in November.Hopes that the Federal Reserve will continue cutting rates through 2025 — having made three last year — were dashed when in December it indicated just two reductions over the next 12 months, down from four tipped previously.The hawkish pivot came as inflation continues to hover above the bank’s two percent target, while there are also concerns that president-elect Donald Trump’s plans to slash taxes, regulations and immigration will reignite prices.”Given a resilient labour market, we now think the Fed cutting cycle is over,” said Bank of America’s Aditya Bhave and other economists.”Inflation is stuck above target: in the December (summary of economic projections), the Fed not only marked up its base case for 2025 significantly, but also indicated that inflation risks were skewed to the upside. Economic activity is robust. “We see little reason for additional easing.”Equities fell across Asia, with Hong Kong, Taipei and Manila off more than one percent each, while Shanghai, Sydney, Singapore, Seoul and Jakarta were also well down. Tokyo was closed for a holiday.Surging oil prices added to unease, with both main contracts jumping around two percent — extending Friday’s gains of more than three percent — after the United States and Britain announced new sanctions against Russia’s energy sector, including oil giant Gazprom Neft.However, commentators do not expect prices to spike too much, even amid speculation that Trump will hit Iran with fresh sanctions.”A significant and perhaps underpriced risk to crude oil prices is the potential for supply to outstrip demand, especially given OPEC+’s intention to reintroduce barrels to the market,” said Stephen Innes at SPI Asset Management.”Even if US sanctions curtail Iranian oil production by 1.5 million barrels a day — a scenario similar to that during Trump’s previous presidency — this amount could easily be compensated by OPEC+, which is currently holding back 5.8 million barrels a day, or 5.3 percent of the total global production capacity.”However, he added that some issues could lead crude to rocket, including an escalation of the Middle East crisis, a significant reduction in Russian output or exports and a strategic about-face by OPEC+ to slash production.- Key figures around 0230 GMT -Hong Kong – Hang Seng Index: DOWN 1.6 percent at 18,765.65Shanghai – Composite: DOWN 0.3 percent at 3,157.92Tokyo – Nikkei 225: Closed for a holidayEuro/dollar: DOWN at $1.0241 from $1.0244 on FridayPound/dollar: DOWN at $1.2186 from $1.2210Dollar/yen: DOWN at 157.63 yen from 157.74 yenEuro/pound: UP at 84.04 pence from 83.90 penceWest Texas Intermediate: UP 2.0 percent at $78.06 per barrelBrent North Sea Crude: UP 1.8 percent at $81.17 per barrelNew York – Dow: DOWN 1.6 percent at 41,938.45 (close)London – FTSE 100: DOWN 0.9 percent at 8,248.49 (close)