Asia Pacific News
LAST UPDATE: July 23, 2025
Trump strikes tariff deal with Japan, auto stocks surge
President Trump announced a US–Japan trade agreement that cuts auto import tariffs to 15% from 27.5%, in return for $550 billion in Japanese investments and loans into the US. The deal pushed Japan’s Nikkei to a one-year high, with major automakers such as Toyota and Honda surging.
Insight
The agreement reduces trade uncertainties, bolstering investor confidence and prompting a rally in Japanese and allied auto stocks. It underscores how strategic investment commitments can facilitate tariff reduction, though US automakers criticized it for placing Japanese imports at a tariff advantage.
BOJ warns of risks to economy, says rate‑hike path on course
BOJ Deputy Governor Uchida cautioned that while US tariffs present uncertainties, the recent trade deal eases one major downside risk. The bank is prepared to continue raising rates if inflation and growth align with forecasts.
Insight
The BOJ remains on track toward tightening monetary policy, reinforced by reduced external trade risks. However, it must carefully weigh persistent food-driven inflation and wage trends before moving ahead.
Japan Prime Minister Ishiba Denies Reports About Resignation
PM Shigeru Ishiba refuted media claims that he plans to resign imminently, acknowledging earlier forecasts but stressing that no final decision has been made as he seeks to stabilize the political environment.
Insight
Ishiba’s denial aims to maintain political continuity amid trade negotiations, but ongoing speculation highlights internal pressures within the ruling party ahead of key economic policy decisions.
ADB Cuts Asia Growth Outlook on Trump Tariffs, Geopolitical Risks
The Asian Development Bank lowered its 2025 GDP growth estimate for East Asia from 4.4% to 4.3%, with South Korea and Southeast Asia notably impacted. Geopolitical tensions and tariff uncertainties are cited as core concerns.
Insight
Persistent US trade policies are weighing on Asia’s economic momentum despite some relief from individual agreements. The downward revision signals risks to regional investment and development trajectories.
Sri Lanka’s Central Bank Leaves Key Rate Unchanged as US Tariffs Loom
Sri Lanka’s central bank held its benchmark rate at 7.75%, aligning with seven of ten analyst forecasts, and said it will monitor potential fallout from US tariff developments before deciding on monetary policy changes.
Insight
In a fragile macroeconomic setting, policymakers are balancing domestic recovery against uncertain external trade pressures. The rate pause signals a cautious approach, preserving policy space amid looming risks.
South Korea to scrutinise US‑Japan trade deal as officials fly to Washington
South Korea’s trade envoy stated Seoul will closely review the US–Japan trade deal, acknowledging possible concessions in agriculture and energy access similar to Japan’s framework in order to secure equivalent tariff outcomes.
Insight
Seoul is under pressure to achieve parity with Japan’s tariff deal, which may require domestic reform. The move demonstrates the cascading diplomatic effects of bilateral agreements on regional trade negotiations.
Taiwan Aims to Strike Agreement with US in New Round of Talks
Taiwan’s trade delegation has arrived in Washington to negotiate a new agreement aiming to avert a threatened 32% US tariff, focusing on tariff relief and market access.
Insight
Taiwan’s proactive diplomacy reflects rising exposure to US trade policy. Success here would further normalize US bilateral trade frameworks but depends on Taiwan accepting reciprocal concessions.
Malaysia PM announces new measures to address rising living costs
PM Anwar Ibrahim introduced several cost‑of‑living relief efforts including a one‑time RM100 (≈USD 24) cash grant for adults, plans to cut RON95 fuel prices by September, and an increased fiscal package.
Insight
The package is designed to pre-empt growing public unrest over inflation, but it could strain government finances and may require further tax reforms or subsidy restructuring.
Singapore’s Consumer Inflation Held Steady in June
Singapore’s core inflation remained unchanged at 0.6% year‑on‑year in June, while headline CPI held steady at 0.8%, as car and accommodation cost moves balanced out (Reuters, Xinhua English).
Insight
The stability in inflation suggests that the Monetary Authority of Singapore’s inflation‑targeting interventions are effective despite pressures from transport and housing costs.
Indonesia to Remove Numerous Trade Barriers, White House Says — WSJ
Indonesia and the U.S. struck a framework deal: Indonesia will cut tariffs on 99% of U.S. imports and remove non‑tariff barriers, including data‑flow and safety compliance, while U.S. tariffs on Indonesian exports will drop to 19% from 32%, with a 40% rate for goods with high non‑market‑content (ウォール・ストリート・ジャーナル, Reuters, The White House).
Insight
The agreement marks a major step in U.S.–Indonesia trade liberalization, opening huge U.S. export opportunities while incentivizing Indonesia to align with U.S. standards—potentially boosting digital‑economy and manufacturing sectors.
Philippine President says U.S. trade deal a ‘significant achievement’
President Ferdinand Marcos Jr. heralded a new U.S.–Philippines trade arrangement that lowers U.S. tariffs on Philippine exports from 20% to 19%, calling the 1‑point cut “a significant achievement.” (Reuters, interaksyon.philstar.com, GMA Network).
Insight
Though the tariff reduction seems modest, Marcos emphasizes its strategic value amid stronger U.S. ties; reducing uncertainty could help Philippine exporters and signal diplomatic solidification.
