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Japan PM to face tough upper house election on Jul 20

Japan PM to face tough upper house election on Jul 20

CNA6 hours ago

TOKYO: Japan will hold an upper house election on Jul 20, the government said on Tuesday (Jun 24), with Prime Minister Shigeru Ishiba battling low approval ratings driven partly by public frustration over inflation.
Ishiba, 68, has been head of a minority government since October, when he led the ruling coalition to its worst general election result in 15 years.
Voters in Tokyo on Sunday also knocked his Liberal Democratic Party (LDP) from its position as the largest group in the city assembly, in a local election seen as a bellwether for the upcoming national vote.
The LDP has led Japan almost continuously since 1955, and observers see the country's opposition parties as too divided to mount a credible challenge to its power.
But the election for parliament's upper house, required by law to take place following the most recent lawmakers' session, could still be tough for Ishiba.
"We must respond properly to high prices, and create a Japan where people can live with peace of mind," the prime minister told reporters on Monday evening.
"We are determined to sincerely appeal to the Japanese people so they feel tomorrow will be better than today."
Half of the 248 upper house seats are up for grabs in July's election, with the winners expected to serve a six-year term. There will also be a by-election for one vacant seat in Tokyo.
The LDP coalition, which currently holds 141 upper house seats, needs to win at least 50 to achieve Ishiba's goal of maintaining a simple majority.
Rice prices have more than doubled over the past year in Japan, due to shortages driven by a supply-chain snarl-up.
Government efforts to bring the price of the grain down by releasing emergency stockpiles have helped approval ratings for Ishiba's cabinet tick up from rock-bottom.
A poll published early June by public broadcaster NHK showed that 39 per cent approved of the cabinet, up from a low of 33 per cent in May.
Japanese elections often have low turnout rates – which can work in the LDP's favour – and the Jul 20 vote will be held during a three-day holiday weekend.

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South Korea special prosecutor seeks arrest warrant for ex-President Yoon
South Korea special prosecutor seeks arrest warrant for ex-President Yoon

CNA

time43 minutes ago

  • CNA

South Korea special prosecutor seeks arrest warrant for ex-President Yoon

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So much for the US dollar's safe-haven rally; de-dollarisation still has some teeth: analysts
So much for the US dollar's safe-haven rally; de-dollarisation still has some teeth: analysts

Business Times

timean hour ago

  • Business Times

So much for the US dollar's safe-haven rally; de-dollarisation still has some teeth: analysts

[SINGAPORE] The US dollar's recent bout of strength – a short-lived one – amid rising Israel-Iran tension signals that the greenback's safe-haven status is intact. But its swift slide on news of a ceasefire on Tuesday (Jun 24) also suggests that the de-dollarisation narrative is still in play, said analysts. Deutsche Bank's global head of emerging markets and Asia-Pacific research, Sameer Goel, told The Business Times: 'The price action last week, including in Asian currencies, in response to geopolitical risk in the Middle East supports the more traditional safe-haven appeal of the dollar. 'But I don't think that reverses the de-risking trend in global markets to re-calibrate their unhedged exposure to the dollar,' he said. 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Sign Up Sign Up MUFG Bank's senior currency analyst, Michael Wan, agreed that the shift to rebalance away from the US dollar was intact despite 'some speed bumps or detours, and beyond week-to-week market gyrations'. 'The gravitational pull is still there,' he concluded, noting that key drivers for Asian economies include significant existing overweights in US assets, greater supply-chain fragmentations, and longer-term fiscal concerns in the world's largest economy. A refuge, no less That said, Julius Baer economist David Meier maintained that US dollar weakness since the beginning of the year is not necessarily at odds with its safe-haven characteristics. 'A country's reserve currency status is built on a combination of preconditions, including a large, stable economy, institutional strength/warranting of property rights, deep financial markets and is protected by military strength – all of which remain intact in the US,' he said. 'Although erratic policymaking is casting doubts on its institutional strength, as long as property rights remain warranted, the safe-haven character of the US dollar should hold.' Moody's Analytics director and head of Asia-Pacific Economics, Katrina Ell, agreed that the greenback was still an attractive haven asset. She noted that recent heightened uncertainty due to the US' 'chaotic protectionist stance' had driven its assets to be less attractive as it was the source of the instability; then escalated Middle East tensions once again sent investors back to the greenback. Currency moves The US dollar index over the weekend crept up towards the key 100 threshold – a level last hit in late May – after US President Donald Trump's posted on Truth Social on Sunday (Jun 22, Asian time) about the 'very successful air strikes' on three Iranian nuclear sites. The American currency reversed its trajectory late Monday evening, weakening after the US Federal Reserve governor teased an interest rate cut at the next policy meeting in July. It sank further Tuesday morning to around the 98 level as Trump announced a 'complete and total' ceasefire between Israel and Iran. In response, major East Asian and South-east Asian currencies – which have mostly logged year-to-date gains against the US dollar – first weakened over the weekend, and then reversed their losses at the start of the week. The won, ringgit and the Philippine peso recorded some of the largest movements against the greenback. Julius Baer's Meier said that the earlier underperformance can be attributed to their 'higher cyclicality and greater sensitivity to risk aversion', which he noted as greater than the Asian safe-haven Singapore dollar or the Chinese yuan renminbi offshore's policy-driven stability. Litmus tests On the psychological levels of the US dollar index he is watching in the near- to medium-term, which could signal a continuation of the safe-haven rally versus a reassertion of the de-dollarisation narrative, Meier flagged 97 as the most recent support level, and 99 as the resistance level. But he cautioned that defining levels is more in the realm of technical analysis than fundamental analysis. MUFG Bank's Wan noted: 'In the very near term, I'm looking for the 99.415 level at the 50-day moving average for the US dollar index to hold for the next downtrend.' If the greenback's safe-haven rally still has legs, the analyst expects its strength to be accompanied by a rally in US treasuries and/or equities. 'Conversely, if the de-dollarisation narrative is re-asserting itself, I would expect dollar weakness to be combined with bond markets outside the US doing better than the US, US equities lagging the rest of the world, and/or alternative safe havens (whether perceived or otherwise) such as gold, bitcoin, yen, franc and perhaps even the Singapore dollar, to do well.' Policy pivot or pause? On the Fed's and regional central banks' next moves, analysts are divided. Moody's Analytics' Ell cautioned that the threat of widespread tariffs remains a dark cloud, which means a sustained energy price increase would be a body blow. 'If this conflict keeps upward pressure on energy prices, the expectation that global inflation will stay contained should be abandoned,' she said. Julius Baer's Meier acknowledged that higher oil prices may exacerbate upside inflation risks, but maintained that the house anticipates only a temporary spike in oil prices. 'We do not expect the conflict to escalate to the point of closing the Strait of Hormuz, leading to a significant oil crisis, (hence) the impact on inflation is likely to remain within limits,' he said. 'Consequently, we do not expect this conflict to be a factor that would delay further monetary policy easing by the Fed or other global central banks,' added Meier. Deutsche Bank's Goel noted that the increasing signs of difference in opinion within the Federal Open Market Committee on whether the central bank should stay on the sidelines in the face of elevated uncertainty, or act more imminently to ease rates. He said: 'A weaker dollar, meanwhile, together with reduction in geopolitical tail risk as it relates to a supply-side shock to oil prices, should give more comfort and space for Asian central banks to ease monetary policy.'

DBS suspends non-essential travel to conflict-hit areas in Middle East as tensions rise
DBS suspends non-essential travel to conflict-hit areas in Middle East as tensions rise

CNA

time2 hours ago

  • CNA

DBS suspends non-essential travel to conflict-hit areas in Middle East as tensions rise

TOKYO: Several major banks, including DBS, are restricting travel to conflict-hit areas in the Middle East as tensions between Israel and Iran escalate. United States President Donald Trump had earlier announced a ceasefire between the two countries, but Israel announced on Tuesday (Jun 24) that it had ordered an attack on Tehran after Iran violated the truce by firing missiles at it. Iran has denied violating the ceasefire. The conflict threatens years of effort by Middle Eastern governments to court global financial firms as part of plans to diversify their economies away from oil. Countries such as Saudi Arabia and the United Arab Emirates have pushed to position themselves as regional financial hubs, offering incentives and regulatory reforms to attract banks and asset managers. DBS said on Tuesday that it had suspended all non-essential travel to the conflict-affected areas. "We are closely monitoring the evolving situation in the Middle East, including developments in and around Dubai," a DBS spokesperson told Reuters. Ang Wee Khoon, head of risk management at the DIFC branch of Bank of Singapore, one of Asia's biggest private banks, told Reuters the bank has halted all non-essential travel to and from Dubai. "The safety of our staff is our highest priority, and we stand ready to activate our business continuity plans while minimising the disruptions to clients," Ang said. US-based JPMorgan is allowing only essential travel in and out of the Middle East for employees, a person familiar with the matter told Reuters on Monday. The largest US bank is offering support to employees on an individual basis, as needed, the source added, requesting anonymity to discuss confidential information. Goldman Sachs has also asked its staff in Israel to work remotely about a week ago, according to a source familiar with the matter. EVACUATIONS Meanwhile, some major Japanese banks have begun evacuating their staff from the region. A spokesperson for Japan's Sumitomo Mitsui Financial Group said it started evacuating staff from locations including Iran and Qatar to ensure their safety. Japan's Mitsubishi UFJ Financial Group has also begun evacuating some family members of staff from Dubai and the Saudi Arabian capital Riyadh, a spokesperson said, and is also considering allowing staff to leave at their own discretion.

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