Asia Pacific News
LAST UPDATE: July 21, 2025
Japan’s Shigeru Ishiba remains PM to negotiate tariffs despite historic defeat
Despite losing his ruling coalition’s majority in the upper house, PM Shigeru Ishiba has announced he will remain in office to lead urgent trade talks with the US aimed at averting potential tariffs, especially on autos.
Insight
Ishiba’s decision to stay on signals Japan’s commitment to securing a trade deal before the US’s August 1 deadline, but his weakened mandate may limit his leverage both domestically and in negotiations.
Japanese First’ party emerges as election force with tough immigration talk
The far-right Sanseito party surged from 1 to 14 seats in Japan’s July upper house election, campaigning on “Japanese First” nationalist, anti-immigration, and economic populist policies, leveraging strong YouTube presence.
Insight
Sanseito’s rise reflects growing public dissatisfaction with mainstream parties and Japan’s economy; its nationalist message is already shifting the policy discourse, pressuring the LDP to take a tougher stance on immigration.
China leaves benchmark lending rates unchanged, as expected
China’s central bank kept its one‑year Loan Prime Rate at 3.0% and five‑year LPR at 3.5%, matching market expectations from a Reuters survey, signaling steady support to mortgage and business lending.
Insight
The decision reflects cautious optimism in the Chinese economy – resilient enough to delay further easing, yet faced with weak domestic demand that may warrant action later in the year.
South Korea industry minister says US tariff talks in critical phase
Industry Minister Kim Jung‑kwan said tariff negotiations with the US are at a crucial stage ahead of an August 1 deadline. National security adviser and other officials are engaging directly with US counterparts to reduce reciprocal tariffs.
Insight
Seoul is taking a high‑stakes diplomatic push to soften potential US tariffs. Active engagement at the ministerial and national security levels reflects the government’s urgency to protect its trade‑dependent economy.
Korea’s Early Exports Remain Solid Despite US Tariff Uncertainty
South Korean exports rose by 4.1% year-over-year in the first 20 days of July, driven by continued global demand for AI chips, despite looming US tariffs set for August.
Insight
The data underscores the resilience and structural strength of South Korea’s tech-export economy, but also increases the pressure on Seoul to secure tariff relief quickly to sustain growth momentum.
Philippines’ Marcos to meet Trump hoping to secure trade deal
President Ferdinand Marcos Jr. will meet US President Donald Trump this week, aiming to secure a favorable trade agreement before the August tariffs deadline, leveraging his country’s ally status.
Insight
This visit demonstrates Manila’s proactive effort to avoid potential economic damage from tariffs. It also highlights the Philippines’ strategic pivot to the US amid regional competition and its own export vulnerability.
Malaysian Court Pauses Sexual Assault Suit Against Premier Anwar
A court has temporarily halted a 2021 civil sexual assault suit against PM Anwar Ibrahim brought by a former aide, pausing proceedings while immunity arguments are reviewed.
Insight
The pause gives Anwar temporary legal relief, allowing him to focus on governing. However, the case continues to cloud his tenure, potentially undermining his reform agenda and credibility.
Singapore to Allocate $856 Million in First Phase of Stock Plan
Singapore plans to allocate S$1.1 billion (US$856 million) via its Monetary Authority to three asset managers (including JPMorgan, Avanda, Fullerton) to enhance liquidity and investor participation. (LinkedIn)
Insight
This significant capital injection reflects Singapore’s proactive strategy to deepen its domestic capital markets and support long-term economic resilience. It also signals confidence in the ability of asset managers to stimulate market activity and broaden investor base.
Indonesia’s Prabowo Rolls Out First of 80,000 ‘Red-White’ Cooperatives to Boost Economic Growth
President Prabowo Subianto launched the pilot phase of a nationwide initiative to establish 80,000 “Red‑White” cooperatives aimed at empowering village economies and micro/small enterprises, starting in Klaten, Central Java. (en.antaranews.com, Bloomberg.com)
Insight
This bold grassroots economic plan could enhance financial inclusion and local entrepreneurship, aligning with Prabowo’s populist credentials and potentially strengthening his political base ahead of future elections.
Rising New Zealand Inflation Puts Brake On Rate Cuts
New Zealand’s annual inflation rose to 2.7% in Q2 2025—the highest in a year—led by local authority rates (+12.2%) and rising rental costs, although it was slightly below forecasts. Core inflation (sectoral factor) came in at 2.8%, down from 2.9%. Despite the increase, markets still expect a 25 bp cut by the RBNZ in August due to broader economic weakness.
Insight
The uptick in headline inflation tempers urgency for policy easing but remains within the RBNZ’s 1–3% target band. With non-tradable inflation easing and significant economic slack, the central bank is likely to resume rate cuts cautiously in August, weighing near-term risks carefully.
