Asia Pacific News
LAST UPDATE: May 28, 2025
ASEAN leaders agree tariff deals with US should not harm members
At the ASEAN summit in Kuala Lumpur, Southeast Asian leaders agreed that any bilateral trade agreements with the United States regarding tariffs should not negatively impact other member nations.
Insight
This consensus underscores ASEAN’s commitment to regional solidarity amidst global market volatility and a steep U.S.-led tariff regime that could impose duties of 32% to 49% on six ASEAN nations. By ensuring that individual agreements with the U.S. do not harm fellow members, ASEAN aims to protect its collective economic interests. Additionally, the leaders addressed the ongoing crisis in Myanmar, calling for an expanded nationwide ceasefire to build trust and initiate inclusive dialogue.
India Sees US Trade Deal as Key to Lowering External Risks
India is currently discussing a U.S. trade deal structured in three tranches, with an interim agreement expected by July.
Insight
India’s pursuit of a structured trade deal with the U.S. reflects its strategic aim to mitigate external economic risks and enhance bilateral trade relations. The phased approach indicates a methodical negotiation process, potentially allowing India to secure favorable terms while addressing domestic economic concerns. This move also signifies India’s intent to strengthen its position in the global trade landscape amidst shifting geopolitical dynamics.
Japanese bonds rally on hopes of less supply
Japanese longer-dated government bonds rallied following a rare move by the finance ministry to seek market participants’ feedback on bond issuance, sparking speculation of an impending reduction in bond supply.
Insight
The rally in Japanese government bonds indicates investor optimism about potential reductions in bond supply, which could alleviate concerns over market saturation and declining demand. The finance ministry’s outreach suggests a responsive approach to market signals, aiming to maintain fiscal stability. However, persistent inflation and the Bank of Japan’s tapering of its bond-buying program may continue to influence yield volatility.
Sri Lanka’s leftist government begins privatization
Sri Lanka’s leftist government announced the sale of a failed hotel project, marking its first privatization move in line with an IMF agreement.
Insight
The initiation of privatization by Sri Lanka’s leftist government represents a significant policy shift aimed at addressing economic challenges and fulfilling IMF obligations. This move may indicate a pragmatic approach to economic reform, balancing ideological positions with the necessity of attracting investment and improving fiscal health. The success of such initiatives could influence future policy directions and investor confidence in the region.
