Japan 40-year bond auction sees weakest demand ratio since 2011
The bid-to-cover ratio, a measure of demand, came in at 2.127, compared to 2.214 at the previous auction.
The sale comes after Japanese Prime Minister Shigeru Ishiba's ruling coalition failed to win a majority in the upper house at a vote on Sunday (Jul 20). Fiscal concerns are ramping up after local media reports on Wednesday said that the nation's leader will announce his resignation in August.
Bond yields on Wednesday rose across the curve following US President Donald Trump's announcement of a 15 per cent tariff on imports from Japan. The benchmark Topix and Nikkei 225 share gauges both rallied more than 3 per cent as market sentiment improved.
Yields have traded recently at multi-year highs at a time when the Bank of Japan (BOJ) has been gradually paring back its massive bond purchases. The Ministry of Finance reduced the issuance of longer-maturity bonds from this month to calm the volatility in the bond market.
BOJ deputy governor Shinichi Uchida indicated there's little immediate need to raise the benchmark interest rate in a speech delivered shortly after Trump's announcement. Overnight index swaps show a more than 80 per cent chance of a rate hike by the end of the year on Wednesday, compared to 59 per cent a day earlier. BLOOMBERG
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Business Times
2 minutes ago
- Business Times
Japan expects only 1% to 2% of $550 billion US fund to be investment
[TOKYO] Japan expects only 1 to 2 per cent of its recently agreed upon US$550 billion US fund to be in the form of actual investment, with the bulk of it being loans, according to the nation's top chief negotiator Ryosei Akazawa. At the same time, Tokyo would save roughly 10 trillion yen (S$87 billion) through lower tariff rates in its deal with America, he said. The US$550 billion investment framework will be a combination of investments, loans and loan guarantees provided by financial institutions backed by the Japanese government, Akazawa said on public broadcaster NHK on Saturday (Jul 26) night. Of the total, investment would be worth 1 per cent or 2 per cent and the US and Japan would split the profits of that investment at a ratio of 90-10, he said. Japan had originally proposed a 50-50 ratio, he added. The fund is a centrepiece of the deal announced by the two sides that will impose 15 per cent tariffs on Japanese cars and other goods. But the details given by Akazawa suggest the Japanese may end up giving up much less than at first glance. The comments come as officials from countries with deals with the US sift through the terms to explain to the public what they entail. 'It's not that US$550 billion in cash will be sent to the US,' Akazawa said. 'By letting the US have 90 per cent of the profits rather than 50 per cent, I think Japan's loss will be at most a couple of tens of billions of yen. People are saying various things, such as 'You sold out Japan', but they are wrong.' For the loans provided through the programme, Japan will simply be collecting the interest payments, and for the loan guarantees, if nothing happens, Japan will also be just collecting fees, Akazawa said. 'For that part, Japan's just making money,' he said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Akazawa also clarified that the investment programme will not be only supporting Japanese and US firms. As a potential example, he cited a Taiwanese semiconductor firm building a factory in the US. 'We'd like to put the US$550 billion in place during President Trump's term,' Akazawa added. Further details of the implementation of the US-Japan deal remain unclear, including when the new tariff rates would take effect and when the new investment vehicle would kick off. There's been no joint document signed by both sides for the deal, although the White House has published a fact sheet. 'If you say something like, 'Let's create a joint document,' they will say, 'We will lower tariffs after the document is created,'' Akazawa said. In order not to lose time, 'we will demand that they issue an executive order to lower tariffs as soon as possible, regardless of a document'. Last week, Akazawa said that he expects universal tariffs on Japan's shipments to be lowered to 15 per cent on Aug 1, while he said he wanted the car tariffs to be cut to 15 per cent as soon as possible without specifying a date. The Trump administration has touted the deal with Japan as a potential model for others. On Sunday, the US and European Union agreed on a deal that will see the bloc face 15 per cent tariffs on most of its exports, with the EU pledging to invest US$600 billion in the US. BLOOMBERG
Straits Times
27 minutes ago
- Straits Times
For the privileged few, airport food hits a new height of luxury
UNITED STATES – Few places feel as engineered to remind you of your social standing as the airport. Each of its protocols, from check-in to security to boarding, imposes a hierarchy. Are you Executive Platinum? Premier ? The peak of that pecking order has long been the airport lounge, which allows elite passengers a cushioned escape from the tumult of the terminal. Now, even as airline stocks have tumbled and ticket demand slows, American airlines and credit card companies are reaching for a higher level of luxury and exclusivity – particularly when it comes to food. At the one-year-old Delta One Lounge at John F. Kennedy International Airport, it is common to hear an employee asking passengers: 'Would you like an ounce of caviar before your flight?' At the lounge, which includes a full-service brasserie with leather banquettes and gold finishes, the menu of complimentary offerings features sirloin steak with red wine jus and salmon sashimi with blood orange ponzu. The caviar will run you an extra US$85 (S$109) or 8,500 miles. Amble around the rest of the 40,000 sq ft space, and you might spy Japanese cheesecakes and earl grey lemon shortbread cookie s behind a glass pastry case ; or a spa-goer nursing a pineapple, lemon and butterfly pea flower juice after a massage. You might even catch a bartender pouring a nip of rare Japanese whiskey at the gold-lined Art Deco bar. To enter, you will need to flash a business class ticket for a long-haul flight on Delta or a partner airline . Top stories Swipe. Select. Stay informed. Singapore Tanjong Katong sinkhole backfilled; road to be repaved after LTA tests Singapore Tanjong Katong Road sinkhole did not happen overnight: Experts Singapore Authorities say access to Changi intertidal areas unaffected by reclamation, in response to petition Singapore New Mandai North Crematorium, ash-scattering garden to open on Aug 15 Singapore Not feasible for S'pore to avoid net‑zero; all options to cut energy emissions on table: Tan See Leng Singapore With regional interest in nuclear energy rising, S'pore must build capabilities too: Tan See Leng World US and EU clinch deal with broad 15% tariffs on EU goods to avert trade war Asia Displaced villagers at Thai-Cambodian border hope to go home as leaders set to meet for talks Airport lounges were once pit stops where business travellers could grab a paper cup of coffee and a handful of wasabi peas before a flight. Now, they dangle wood-fired pizza ovens, seafood towers, sushi bars and espresso martinis on tap. Lounges operated by American Express are introducing menus by award-winning chefs Kwame Onwuachi, Mashama Bailey, Michael Solomonov and Sarah Grueneberg. A seafood tower order in the Chase Sapphire Lounge at Laguardia Airport in East Elmhurst, New York. PHOTO: AMIR HAMJA/NYTIMES The escalating opulence of lounge food – and the mediocrity of the other offerings in airports – is a sign of just how wide the American wealth gap has grown, said sociologist Cecilia L. Ridgeway, who is a professor emeritus of social sciences at Stanford University. Airline trave l u sed to be a symbol of luxury. As more people fly, and as tickets become cheaper , she said, the wealthy still want to feel distinguished from th e public in visible ways. 'We need more signs and symbols that you are doing okay, that people are seeing it, that you are moving up.' A quick tour of seven of the US' new airport lounges showed that the quality of food is similar to what you would find at a wedding buffet – ranging from lacklustre to surprisingly satisfying . A salad of radicchio and roasted peaches at the United Polaris Lounge in Houston was cloying, while the French toast at the American Express Centurion Lounge at LaGuardia Airport had a crisp exterior and subtle sweetness that explain why it has a following. But taste may matter less than the fact that the food is free, fancy and makes the lounge guest feel important. The sit-down restaurant at American Airlines' Chelsea Lounge at Kennedy Airport feels like a lavish library – hushed, with lots of gold and glass. 'We like exclusivity,' said Ms Laura Parkey, a luxury real estate adviser from Florida, who was eating there before flying in business class to Switzerland for a river cruise. She sipped Moet & Chandon Champagne and eyed the pommes Anna with caviar at the next table. Compared with the terminal outside, she said, 'the food is better, and you don't have to deal with the masses'. These luxe touches are nothing new for international airlines such as Emirates and Cathay Pacific, which for years have accessorised their lounges with dim sum, cocktail pairings and cigar bars. Their American counterparts have only recently approached that calibre. But today, adding a full-service restaurant has become a baseline part of the expectation for lounges in the US, said Mr Aaron McMillan , managing director of hospitality programmes for United Airlines. It was one of the first American carriers to offer an in-lounge restaurant. Competition is intensifying as credit card companies enter the lounge game, unburdened by the logistical challenges and costs of running an airline, and seeking to attract frequent travellers as cardholders. The Chase Sapphire Lounge at LaGuardia Airport – accessible to those who have the Chase Sapphire Reserve card (with an annual fee of US$795), the J.P. Morgan Reserve card (US$795) or the Ritz-Carlton Credit Card (US$450) – looks like a chic hotel lobby. Its centrepiece is a circular bar with purple velvet chairs. The cocktail menu comes from the popular New York bar Apotheke, and the baristas can make you a sea salt and oat milk latte. Each table has QR codes for guests to order gnocchi with zucchini and mint, or marinated beets with whipped feta – both created by Fairfax, an all-day cafe in Manhattan. The Capital One Landing at Ronald Reagan National Airport in Washington has a full-service tapas bar created by chef Jose Andres. Crisp jamon croquetas and gambas al ajillo with a pleasant kick are made to order. Negronis and espresso martinis are available on tap. While most airport food comes from the same roster of approved suppliers, Andres gets his Iberian ham and picos from the purveyors who supply his restaurants. Each of these vendors had to be approved by airport security, with background checks and X-ray scans. The 1,200 sq ft kitchen was custom-built to Andres' specifications. One of his company's culinary directors works at the lounge full time. Ms Charisse Grey, the company's senior director of research and development, said: 'If there was a budget, I was not aware of it.' The lavish menus in these lounges speak to a new class of affluent travellers, said Mr Ben Schlappig, founder of the travel website One Mile At A Time. 'It used to be that lounges were thought of as stuffy and for business travellers,' he said. Today, the clientele 'skews much younger, and the increased focus on food and drink, and partnering with cool brands is part of that'. A Capital One spokesperson contended that the company's lounges were more approachable for everyday travellers, who do not need a first-class ticket to experience the luxury amenities – just a Capital One Venture X card, which costs US$395 a year. But at lounges with that easier accessibility, customers often wait in long lines, or are denied entry because the spaces get overcrowded. This has prompted some credit card companies to tighten lounge access, just as airlines have. Capital One, which allows cardholders to bring in a certain number of guests without charge, will charge for most additional visitors starting 2026 . Mr Mitch Radakovich, a data scientist from Cincinnati who was spending his layover en route to Copenhagen at the Capital One Lounge at Kennedy Airport, said it felt almost too good to be true to enjoy such amenities – cheesemongers who will customise a charcuterie board and freshly baked bagels from Ess-a-bagel – with just a US$395-a-year credit card. 'I'm sure the price will go up,' he said. 'It's an interesting maths problem: exclusivity versus luxury.' With all the money being poured into elite lounges, he wondered what airlines and airports were doing for the average traveller, who has to contend with shrinking onboard amenities, long security lines and thronged terminals. 'I used to fly Cincinnati to Atlanta, and now soda isn't even an option – it's coffee or water,' he said. 'The overall quality has decreased for the public.' NYTIMES
Business Times
27 minutes ago
- Business Times
Trade talks with US in trouble as Thai-Cambodia conflict escalates
[BANGKOK] After months of uncertainty over the tariff fate imposed on its exports to the US, a deadly border clash between Thailand and Cambodia has now added fresh geopolitical risk to an already tense trade standoff as Bangkok scrambles to avoid punishing new duties. Fighting broke out on Jul 24 along the Thai-Cambodian border, killing at least 32 people and displacing over 200,000 civilians. The violence comes as Thailand struggles to finalise a trade agreement with Washington, even as regional peers like Indonesia, Vietnam and the Philippines have secured deals that cap US tariffs at 19 to 20 per cent. Both Thailand and Cambodia, which run sizeable trade surpluses with the US, face tariffs of 36 per cent on their exports to the American market starting Aug 1 if no deal is struck. For Thailand, one of the most export-reliant economies in the region, such a steep rate – among the highest globally – would deal a heavy blow to its already faltering economy. US President Donald Trump on Saturday said both sides had agreed to a ceasefire, following calls with Cambodian Prime Minister Hun Manet and Thailand's acting Prime Minister Phumtham Wechayachai. He added on Truth Social: 'They are also looking to get back to the 'Trading Table' with the United States, which we think is inappropriate to do until such time as the fighting STOPS.' Although fighting continued, both sides reportedly agreed to let Malaysia, Asean's current chair, mediate the conflict. According to reports, the two prime ministers are expected to travel to Malaysia on Monday for initial talks. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Growth on the line Economists had already projected GDP growth of less than 2 per cent this year under a best-case scenario of 10 to 20 per cent US tariffs. That forecast is now expected to be downgraded to below 1 per cent if the full 36 per cent rate takes effect. Thailand's economy remains heavily export-driven, recording around US$300 billion in exports last year. The US accounted for 18 per cent of those shipments – one of the highest shares in Asean, behind only Vietnam and Malaysia. During the first six months of 2025, Thailand's exports grew 15 per cent year-on-year, with much of that attributed to front-loading by US clients. Exports to the US were up 41.9 per cent in June. Thailand's second main engine of economic growth is tourism, a sector now facing fresh headwinds as a sharp drop in Chinese visitors, spooked by security concerns, has been further compounded by the border conflict. The kingdom's tourism arrivals in the second quarter fell 12 per cent year on year, after falling 5 per cent in Q1 of FY2025, driven by weakness from North Asia, Southeast Asia, the Middle East and China (down 40 per cent), according to government figures. Arrivals are expected to reach 32-33 million, compared with 35 million in 2024. Sluggish domestic factors And unlike many neighouring countries, Thailand's domestic consumption remains sluggish, crippled by high household debt (88 per cent of GDP), which cuts into spending. 'If you cannot improve your competitiveness in the export sector, and you have high household debt, it constrains your ability to build your economy through domestic channels because already people have to pay a lot of their incomes to service their debt,' said Kim Eng Tan, Senior Director for Asia Pacific sovereign ratings at S&P Global Ratings, at a recent Bangkok conference. While Thailand has a well-diversified range of export items, including automobiles and auto parts, agricultural commodities, processed foods, electrical appliances and electronics, it has lagged in moving up the value-added ladder in electronics, nowadays the main driver of export success. In this sector Thailand already faces stiff competition from Asean neighbours, which now look like they will face lower tariff rates in the important US market. 'The impact of tariffs on Thailand will actually depend on the tariffs imposed on its competitors,' said Louis Kuijs, chief economist for Asia-Pacific at S&P Global Ratings, speaking at the same event. Most of the Asean economies are competitive in the US market, so it matters less how competitive Thailand is compared to US factories – which are unlikely to reopen – and more how it stacks up against other Asean exporters. Thailand is also competing with China in the US market. 'A lot depends on the tariff rate on China as it is Thailand's main competitor in the US market,' said Kirida Bhaopichitr, Research Director at the Thailand Development Research Institute. 'China is Thailand's main competitor in 18 of the top 20 Thai exports to the US,' she pointed out. The final tariff rate on China is expected to be announced on Aug 11. Political risks Thailand's future efforts secure a deal with the US are further complicated by its own political disarray, which the conflict with Cambodia has added to. Thai Prime Minister Paetongtarn Shinawatra was suspended from her post by Thailand 's Constitutional Court on Jul 1, after a supposedly private conversation with former Cambodian leader Hun Sen was leaked, in which she called him 'uncle' and criticised the Thai commander of the border region. Paetongtarn is the daughter of Thaksin Shinawatra, a former prime minister and billionaire businessman once known to have close personal ties with Hun Sen. Thailand's political scene has arguably been shaky for the past two decades, with much of the divisiveness centered around power struggles between powerful politicians, such as Thaksin, and the elites identified with royalists, the military and entrenched business groups. 'We have to wait for a government that is able to get its policy vision lengthened to the extent that it is able to implement polices to deal with some of the problems,' said S&P's Tan. He added, 'But this development (US tariffs) is not likely to change the metrics in such a way that we may have to change our outlook, because overall the Thai metrics are still quite resilient. But it is not helpful.'
