Asia Pacific News
LAST UPDATE: July 1, 2025
Asian Factory Activity Stays Subdued as Tariff Deadline Looms
S&P’s June PMI survey showed Asia’s manufacturing sector remained weak in late Q2, with contracting output, new orders, and hiring amid uncertainty over possible U.S. tariff hikes.
Insight
The data reflects how potential trade barriers are increasingly weighing on factories across ASEAN—fueling caution and slowing growth ahead of a tight tariff deadline. The findings point to a regional export slowdown.
China Vows to Rein In Intense Competition, Build Unified Market
Top Chinese leaders pledged to limit aggressive price wars among firms and advance a unified domestic market, as highlighted in recent directives.
Insight
This move signals a more managed competitive environment, aimed at reducing regional market fragmentation. It aligns with Beijing’s “dual circulation” strategy, emphasizing stronger internal coordination and domestic resilience.
India’s Foreign Minister Sees US Trade Deal as Possible in Days
External Affairs Minister Jaishankar stated that India and the U.S. are in advanced negotiations and a trade agreement could be reached in a matter of days.
Insight
His comments indicate an optimistic outlook, suggesting willingness on both sides to make concessions quickly. This progress may ease export pressures before U.S. tariff deadlines.
Japan says it won’t sacrifice farm sector for tariff deal after Trump rice complaints
Japan reaffirmed it won’t make concessions on its farm sector—especially rice production—to secure a tariff deal with the U.S., despite Trump’s criticism of rice imports.
Insight
This reflects Tokyo’s refusal to compress domestic agricultural protections, highlighting the political sensitivity of farm reforms ahead of key July elections.
BOJ should not rush into raising rates, new board member Masu says
Incoming BOJ board member Kazuyuki Masu cautioned against rushing interest rate increases, citing ongoing economic and external uncertainties, including U.S. tariff risks.
Insight
Masu’s moderate stance reinforces the BOJ’s cautious approach. By focusing on underlying inflation rather than headline figures, it signals the bank may delay further tightening until justifiable conditions emerge.
Japan Business Sentiment Improves Despite Tariffs
Japan’s Tankan survey shows business confidence among big manufacturers rose in June, as firms adapt to U.S. tariffs by passing on costs while maintaining capex growth (+11.5% projected) (wsj.com, kfgo.com).
Insight
Strong sentiment amid tariff uncertainty suggests corporate resilience. Sustained investment reflects strategic long-term planning, though vigilance is essential as trade tensions evolve.
Blow for Thailand’s government as court suspends PM from duty
Thailand’s Constitutional Court suspended PM Paetongtarn Shinawatra pending a dismissal petition linked to leaked remarks criticizing a military commander and praising Cambodia’s Hun Sen .
Insight
The setback deepens political instability and weakens the coalition, increasing the risk of early elections. It highlights the military’s influence and the fragility of dynastic governance.
EXPLAINER – Thailand’s political chaos: what happens next?
Following the PM’s suspension and mass protests, the article outlines possible scenarios including caretaker rule, negotiations with the military, or a snap election .
Insight
The analysis underscores a constitutional crisis aggravated by public dissent and coalition breakdown. The country faces either unstable interim governance or an early electoral cycle.
Malaysia receives positive U.S. feedback in tariff talks, minister says
Malaysia’s trade minister reported constructive U.S. feedback in negotiations ahead of a looming 24% tariff deadline .
Insight
Optimism in talks could avert punitive tariffs and support export resilience. Success may set a model for other Southeast Asian nations under U.S. trade pressure.
Indonesian annual inflation at 1.87% in June, just above expectations
Measure: 1.87% y/y inflation in June, slightly above the 1.80% consensus, remaining within Bank Indonesia’s 1.5–3.5% target .
Insight
Moderate inflation gives the central bank room to consider further rate cuts to stimulate growth, though policymakers must monitor stability and inflation trajectory.
Indonesia’s free meal programme reaches 5.6 mln people as of June, finmin says
Indonesia’s finance minister reported that the government’s free meal initiative has reached 5.6 million beneficiaries by the end of June.
Insight
The expansion of this social support program indicates the government’s commitment to cushioning low-income households during inflationary pressures. It also demonstrates fiscal responsiveness in managing cost-of-living challenges ahead of regional elections.
