Asia Pacific News
LAST UPDATE: June 12, 2025
IMF agrees to release $42.7 million in sixth installment of ECF to Nepal
The IMF has approved a further disbursement of $42.7 million to Nepal under its Extended Credit Facility (ECF), following a staff-level agreement during an IMF mission from May 26 to June 10. The decision is subject to final approval by the IMF Executive Board and brings total ECF support to approximately $331.8 million.
Insight
This continued funding reflects the IMF’s confidence in Nepal’s economic reform trajectory and its recovery from forex reserve pressures. The release will support fiscal stability, bolster sectoral reforms (including AML/CFT), and underpin macroeconomic resilience.
China will ‘honour’ commitments after Trump said trade deal ‘done’
China’s Foreign Ministry stated it will honour all commitments from the recent US–China trade negotiations after President Trump claimed the deal was “done.” The ministry urged both nations to implement the agreed framework, including rare-earth export and tariff arrangements.
Insight
The statement underscores Beijing’s interest in maintaining trust amid trade tensions. While both parties claim success, enforcement mechanisms and specifics remain unclear—highlighting the fragility of reforming long-standing trade disputes.
China Puts Six-Month Limit on Its Ease of Rare‑Earth Export Licenses
China is imposing a temporary six-month cap on rare-earth export licenses for U.S. automakers and manufacturers—a concession tied to ongoing trade negotiations in London and pending final approval from Trump and Xi. The U.S. is reciprocating by relaxing controls on jet engines, ethane, and related items.
Insight
By imposing a time-bound license, China retains leverage—demonstrating strategic flexibility while signaling that the truce is precarious. This move highlights how critical-mineral control remains a central bargaining chip in U.S.-China trade dynamics.
India health minister says ‘many people’ killed in Air India plane crash
On June 12, Air India Flight AI171 (Boeing 787‑8) crashed shortly after departing from Ahmedabad to London Gatwick, hitting a residential doctors’ hostel in Meghani Nagar. Health Minister Jagat Prakash Nadda confirmed “many people” were killed. As the first fatal incident involving a Dreamliner, over 200 people perished.
Insight
The tragedy underscores critical vulnerabilities in aviation safety even in modern aircraft and highlights the profound human and systemic impacts of such disasters. It may prompt global scrutiny of maintenance and emergency protocols.
Japan Won’t Rush Trade Deal, While Welcoming Progress Before G‑7
Ahead of the G‑7 summit, Japanese officials welcomed progress in trade discussions but emphasized they will not hastily conclude an agreement without securing national interests, particularly in digital data and industrial competitiveness.
Insight
Japan’s cautious approach signals a desire to balance multilateral diplomacy with domestic safeguards. Their stance may influence the tone of upcoming G‑7 trade talks and set expectations for comprehensive rather than quick-win deals.
Japan’s business mood worsens as US tariff uncertainty takes toll
A Reuters Tankan survey indicates that Japanese businesses have turned pessimistic for the first time in 2025, citing uncertainty over potential U.S. tariffs as a significant drag on investment sentiment. Exporters and manufacturers expressed concerns about disrupted trade flows.
Insight
The survey highlights how U.S. trade policy—even as a pending threat—can materially impact Japan’s corporate outlook. This may drive firms to diversify export markets and prompt Tokyo to seek tariff assurances at the G‑7.
BOK Urges Swift Extra Budget, Sees Limited Inflation Impact
The Bank of Korea has called on the government to enact an additional supplementary budget to support economic growth, asserting that it would have only a minor inflationary effect. The central bank downplayed concerns over overheating.
Insight
BOK’s stance underscores proactive macroeconomic policymaking: it signals that fiscal stimulus can bolster growth without compromising price stability, likely easing coordination between Seoul’s fiscal and monetary authorities.
Thai consumer confidence hits 27‑month low in May over U.S. tariffs
Thai consumer confidence dropped to its lowest in 27 months (54.2 in May vs. 55.4 in April), largely due to concerns about U.S. tariffs. A potential 36% tariff looms if renegotiation fails by July, threatening exports and tourism, with growth downgraded to 1.3–2.3%.
Insight
The slide reflects growing domestic anxiety over external trade risks. With a moratorium expiring in July, delayed negotiations could compound consumer and business pessimism, potentially undermining economic stability for years.
Vietnam lawmakers approve merging provinces, slashing nearly 80,000 jobs
Vietnam’s National Assembly approved a reorganization plan merging provinces and cities, resulting in the elimination of nearly 80,000 state positions. This is part of broader administrative streamlining.
Insight
These structural reforms aim to enhance efficiency and reduce fiscal burdens. While cost-saving, the workforce cuts may strain affected communities and require careful management to ensure smooth transitions.
Earthquake worsens Myanmar’s economic decline, World Bank says
The World Bank forecasts Myanmar’s economy to shrink by 2.5% in fiscal year 2025/26, driven by $11 billion in damages (14% of GDP) from March’s 7.7 magnitude quake. The quake affected 17 million people and left over 3,700 dead.
Insight
The disaster exacerbates pre-existing turbulence from conflict and weak governance. The scale of human and economic loss will require extensive recovery aid and poses a major challenge to rebuilding resilience.
NZ’s Willis criticizes RBNZ handling of Orr resignation
Finance Minister Nicola Willis reproached the Reserve Bank for lack of transparency around the sudden February resignation of governor Adrian Orr, citing delays in disclosing the reasons and inadequate OIA responsiveness.
Insight
Willis’s criticism signals increased political oversight of central bank operations and transparency standards. It may prompt RBNZ to tighten governance protocols and clarify its communication policies.
