Asia Pacific News
LAST UPDATE: June 23, 2025
Japan factory activity returns to growth after 11‑month contraction, PMI shows
The au Jibun Bank flash manufacturing PMI rose to 50.4 in June, breaking an 11‑month streak of contraction. The services PMI also improved to 51.5, pushing the composite PMI to 51.4, the highest since February (m.facebook.com, reuters.com).
Insight
This marks a tentative recovery in Japan’s domestic economy despite sluggish export conditions. However, the fragile global trade outlook suggests the rebound may not be firmly anchored yet.
Japan scraps US meeting after Washington demands more defense spending, FT reports
Japan has canceled the July 1 “2+2” security dialogue after the US—reportedly via Pentagon official Elbridge Colby—pressed for a defense budget hike to 3.5% of GDP (some sources even mention 5%). Tokyo denies formal discussions occurred and cites domestic politics ahead of its July 20 election .
Insight
The move signals growing friction in the US‑Japan security alliance: Tokyo appears to be resisting mounting US pressure to significantly boost defense contributions amid sensitive domestic political timing.
Japan, S. Korea expected to deepen future‑oriented cooperation
On the 60th anniversary of diplomatic relations normalization, PM Ishiba emphasized shared socioeconomic challenges—facing ageing populations and low birthrates—and called for increased collaboration in these areas while cautiously navigating historical tensions .
Insight
This highlights a pragmatic pivot in Tokyo‑Seoul relations toward cooperative solutions for mutual demographic and regional vitality, setting aside deeply rooted historical grievances.
South Korea June 1‑20 exports up as US shipments rise despite tariffs
South Korea’s exports (June 1–20) increased by 8.3% YoY, rebounding after May’s dip. Semiconductors surged 21.8%, vehicles climbed 9.2%, and shipbuilding exports jumped 47.9% .
Insight
Strong export performance, especially in semiconductors and autos, suggests Korea’s trade sector remains resilient. However, tariffs remain a persistent risk, and momentum must be retained through the remainder of the month.
South Korea’s Lee names first civilian defence minister in decades
President Lee Jae‑Myung appointed Ahn Gyu‑back, marking the first civilian defence minister in 64 years. He also appointed 10 cabinet ministers, including a new foreign and unification minister .
Insight
This appointment underscores Lee’s intent to strengthen civilian oversight over defense affairs—a clear break from past military dominance—reflecting broader political and democratic reforms following last year’s martial law episode.
China Land Sales Income Hits Decade Low, Widening Budget Deficit
China’s revenue from land sales dropped 14.6% YoY to ¥194.1 bn in May—the lowest since May 2015—exacerbating an already widening fiscal deficit as government spending remains high (bloomberg.com).
Insight
Weak land sales deepen risks for local government finances, pushing Beijing to boost economic stimulus and absorb more debt—potentially prolonging property-market weakness and fiscal strain.
Thai PM Paetongtarn Defies Calls to Quit as Border Spat Escalates
PM Paetongtarn Shinawatra refuses to resign despite fallout from a leaked phone call in which she appeared deferential to Cambodia’s Hun Sen; she plans a cabinet reshuffle and a tougher stance on the border dispute .
Insight
Her defiance reflects political resilience but risks deepening coalition fractures. With the border conflict continuing, her government faces both internal instability and national security challenges.
Malaysian PM Anwar’s Popularity Rises Even as Growth Slows
PM Anwar Ibrahim’s approval rating rose to 55% in May, up from 54% in December and 50% in November 2023, despite economic growth slowing recently .
Insight
The rise in popularity indicates public confidence in his leadership and reforms, providing political space to tackle economic headwinds and implement long-term policies.
Singapore’s Consumer Inflation Slowed in May
Singapore’s core inflation eased to 0.6% YoY in May (from 0.7%), and headline inflation slowed to 0.8%, largely due to lower food and transport costs .
Insight
The continued disinflation trend supports a cautious policy response from the Monetary Authority of Singapore, allowing room for economic stabilization without inflation pressure.
India’s business activity surges in June on strong demand, record export orders, PMI shows
India’s flash composite PMI jumped to 58.4 in June (from 57.6), with services at 60.7 and manufacturing at 58.4. Export orders hit a record high since survey inception .
Insight
The sharp PMI uptick underscores healthy domestic and global demand driving India’s growth engine, highlighting export momentum as a key growth lever even amid widening trade deficits.
