Asia Pacific News
LAST UPDATE: June 13, 2025
BOJ Is Said to See Inflation Running Stronger Than Expected
Bank of Japan officials expect inflation to exceed previous forecasts, potentially prompting discussions on interest-rate hikes if global trade stays supportive (bloomberg.com).
Insight
The BOJ is showing signs of pivoting from its ultra-easy stance due to persistent inflation pressures. Should global trade conditions remain stable, a shift toward tightening may occur sooner than anticipated, marking a significant policy shift.
Japan’s Treasury holdings not a topic at Bessent meetings, Kato says
Finance Minister Kato clarified that Japan’s $1 trillion-plus U.S. Treasury holdings were not discussed with U.S. Treasury Secretary Scott Bessent; they are used solely for yen stabilization, not trade leverage .
Insight
This statement dispels market speculation linking Japan’s bond holdings to trade negotiations, underlining a clear divide between currency stabilization tools and trade policy.
Akazawa Sees a Deal With US Sparing Japan From Higher Car Levies
Japan’s top trade negotiator Akazawa anticipates a deal with the U.S. that could shield Japanese automakers from higher tariffs amid ongoing trade discussions .
Insight
Tokyo is leveraging negotiations to protect its automotive sector, signaling that easing auto tariffs is central to U.S.–Japan trade talks and could bring tangible relief to Japanese exporters.
South Korea’s Lee pledges support on trade issues in meeting with top conglomerates
President Lee Jae‑myung pledged to ease regulatory burdens and accelerate tariff talks with the U.S. during a meeting with major Korean conglomerates including Samsung and Hyundai .
Insight
This move shows Seoul’s intent to anchor export resilience through strong public-private coordination. Quick tariff resolutions and regulatory streamlining are key to sustaining competitiveness in key industries like chips and autos.
Narendra Modi visits Air India crash site as investigation gets under way
Prime Minister Modi visited the Air India Boeing 787 crash site in Ahmedabad where over 240 have died, one survived. Authorities recovered the black box and launched a thorough probe .
Insight
Modi’s visit underscores a high-level commitment to accountability in aviation safety. With the black box recovered, the investigation could lead to regulatory reforms and tighter safety oversight for India’s aviation sector.
Vietnam risks being the trade war’s biggest loser. Does it have a plan B?
Vietnam, once a trade‑war beneficiary, faces new risks after a proposed 46% U.S. tariff on its exports. Companies are diversifying into Japan and Europe. Authorities are speeding economic reforms aimed at reducing dependence on U.S. markets (ft.com).
Insight
The tariff shock underscores Vietnam’s vulnerability due to heavy reliance on U.S. demand. While short‑term economic pain is likely—such as GDP slowdown and potential job losses—the government’s accelerated reforms and market diversification efforts indicate a strategic pivot toward more resilient growth.
US-Thailand Tariff Talks Likely to Be Virtual as Deadline Nears
As President Trump’s July 9 deadline approaches, U.S.–Thailand tariff discussions are expected to be conducted virtually. Details remain limited. .
Insight
The shift to virtual talks reflects accelerated diplomacy under tight deadlines. It suggests urgency on both sides, but could introduce communication challenges that might affect the pace and substance of any agreement.
Thai central bank chief sees need for greater inflation target flexibility
Bank of Thailand Governor Sethaput emphasized in London that inflation targeting should tolerate wider deviations due to shocks. Thailand’s inflation has been low, averaging 0.48% year-to-date, prompting a 25 bp rate cut to 1.75%, with the next decision on June 25 .
Insight
Governor Sethaput’s approach signals a shift toward pragmatic policy—balancing growth and inflation risks. By allowing flexibility, the central bank can better absorb external shocks without triggering unnecessary tightening or easing.
Indonesia aims to sign EU free-trade agreement in 2026, official says
After nine years of talks, Indonesia expects to finalize and ratify an EU‑Indonesia FTA by 2026, possibly effective by late 2026/early 2027. The deal covers palm oil, textiles, seafood, with reciprocal market access, and promises a 5–50% export boost and increased EU investment .
Insight
This FTA marks a major strategic win for Indonesia, promising both trade expansion and diversification of investment. It may help buffer economic exposure to the U.S. and China and inject momentum into industrial, renewable, and mineral sectors.
