Asia Pacific News
LAST UPDATE: July 19, 2025
Japan, US Can Reach Good Trade Deal, Bessent Tells Ishiba
U.S. Treasury Secretary Scott Bessent told Japanese PM Shigeru Ishiba in Tokyo that a mutually beneficial tariff deal between the U.S. and Japan remains possible. They agreed to continue vigorous negotiations, involving Japan’s chief trade negotiator Ryosei Akazawa, ahead of an August 1 tariff deadline.
Insight
This exchange reflects both countries’ willingness to keep talks open and politically sensitive timing—Japan’s fragile coalition ahead of upper house elections may drive Ishiba to secure a deal, while the U.S. seeks tariff clarity. Continued dialogue signals cautious optimism.
Japan’s Kato Aware Market Views Over Debt Driving Bonds
Japanese Finance Minister Katsunobu Kato acknowledged bond market concerns about Japan’s fiscal health and that recent volatility in long-term sovereign yields reflects doubts over debt sustainability.
Insight
Kato’s recognition indicates government awareness of rising market anxieties. It signals possible forthcoming measures in debt management and fiscal discipline to reassure investors and stabilize bond markets.
Japan and EU to hold summit: Tokyo
Japan announced a summit with the European Union, scheduled in Tokyo next week, expecting attendance by EU Commission President Ursula von der Leyen.
Insight
The summit underscores Japan’s drive to strengthen strategic and economic ties with the EU amid global trade fragmentation. It complements Tokyo’s efforts to diversify beyond heavy U.S.-focused diplomacy.
Japan rice prices double, raising pressure on PM
Official data showed rice prices in Japan surged by nearly 100% year-on-year in June, significantly increasing cost-of-living pressures and fueling criticism toward PM Ishiba ahead of elections.
Insight
The extreme spike in staple food prices underscores domestic economic vulnerabilities affecting political capital. Ishiba’s leadership is being directly tested by inflationary pressures, revealing a growing tension between economic policy and voter sentiment.
China to expand trade in next five-year plan, minister says
Commerce Minister Wang Wentao said that China will expand both import and export activity under its upcoming 2026–2030 five-year plan, highlighting trade resilience and planning to stimulate domestic consumption.
Insight
China is signaling a balanced strategy to manage external uncertainties by diversifying trade and bolstering domestic demand. This marks a shift toward reducing dependency on foreign markets and maintaining stability under geopolitical stress.
Economists urge Chinese local govts to target consumption to drive growth
Economists, including Liu Qiao of Peking University, urged local administrations to pivot toward boosting household disposable income and consumption, rather than relying on infrastructure and land-sale stimulus. The proposal is shaping policy for the next five-year plan, with retail sales targeted to exceed 50 trillion yuan by end-2025.
Insight
The emphasis on bolstering the consumer economy illustrates a strategic move to transition from export-driven to more sustainable consumption-led growth. Enhanced welfare measures could help counter emerging deflationary risks.
China Lifts Exports of Rare-Earth Products After Trade War Curbs
China’s customs data shows rare-earth exports surged ~80% in June after hitting a five-year low in May, following the lifting of export curbs imposed during trade tensions.
Insight
The rebound indicates China’s return to asserting control over rare-earth supply but could also be a calculated signal to global partners. Managing export levels remains a key geopolitical tool in trade leverage.
Philippines Eyes US Trade Deal as Marcos Set to Meet Trump
During his July 20–22 Washington visit, President Ferdinand Marcos Jr. plans to discuss a new trade deal with the U.S., amid talks of a tariff increase from 17% to 20% on Philippine goods. Marcos also aims to strengthen security cooperation.
Insight
Manila is leveraging strategic ties to counter looming tariff pressures, integrating economic and security objectives in its U.S. engagement. This underscores the Philippines’ balancing act between trade access and geopolitical alignment.
Malaysia’s Exports Drop Again Amid Tariff Angst
Malaysia’s exports fell 3.5% year‑on‑year in June, weighed down by reduced shipments of petroleum products, LNG and crude oil, illustrating ongoing trade headwinds as U.S. tariffs loom. (MarketScreener)
Insight
The decline shows vulnerability in Malaysia’s export-driven economy, particularly around energy commodities. With U.S. tariffs set to increase to 25% on August 1, businesses facing dwindling orders risk further slowdown unless tariff relief or new trade arrangements emerge.
