Latest news with #politicalrisk
Bloomberg
4 days ago
- Business
- Bloomberg
Tariffs, Duterte Risks Loom as Philippines' Marcos Charts Last Years in Power
Fresh from tariff talks with President Donald Trump, Philippine leader Ferdinand Marcos Jr. is on Monday set to unveil plans to boost growth as he starts the second half of his single six-year term beset with economic and political risks. Marcos will use his annual speech to Congress to push welfare and infrastructure programs as he steers the Southeast Asian economy through global trade tensions. He's also likely to call for national unity after his rival, Vice President Sara Duterte, on Friday successfully thwarted efforts to disqualify her from office and the 2028 elections.
Yahoo
23-07-2025
- Business
- Yahoo
Buyers flee Japanese bonds as political, fiscal risks rise
By Rocky Swift and GregorStuart Hunter TOKYO (Reuters) -Japanese government bonds tumbled on Wednesday, sending benchmark yields to near 17-year highs, as traders priced in increased political risks and a hazy outlook for the central bank's policy normalisation path. In a sign of how nervous markets are, the Ministry of Finance's first sale of super-long government debt since a bruising electoral defeat for Prime Minister Shigeru Ishiba logged the weakest demand in almost 14 years. In a whirlwind day of news, the United States and Japan announced a trade deal, speculation swirled that Ishiba planned to resign, and a Bank of Japan (BOJ) official warned of an economic slowdown. The 10-year JGB yield jumped as much as 10 basis points (bps) to 1.6%, marking its biggest move in months and the highest level since October 2008. Super-long term JGB yields hit record highs in May and are back near those levels as concerns mount over Japan's precarious finances. "We're seeing a possible buyers' strike playing through," said Chris Weston, head of research at broker Pepperstone. "Inflation is running far too hot for where interest rates are. The question is why would you buy at these levels?" he said, adding he expected the selloff could extend to UK gilts too. Sunday's defeat for Ishiba's Liberal Democratic Party and coalition partner Komeito follows their loss of a majority in the more powerful lower house last year. Opposition parties have advocated for tax cuts and increased government spending to help households deal with inflation. Ishiba plans to resign, a source close to the prime minister said. Local media reported the move could happen by the end of next month. However, the prime minister later said there was no truth to the media reports about his intentions. "Attention will soon turn to the next prime minister's policy agenda and any signals of recalibration from the BOJ as JGB yields climb," said Charu Chanana, chief investment strategist at Saxo. After the election defeat, investors expect whoever replaces the fiscally conservative Ishiba will support calls for more government spending, widening an already bloated fiscal deficit at nearly 2-1/2 times the size of Japan's economy. The election result also puts the Bank of Japan in a double bind as prospects of increased spending could keep inflation elevated while potentially prolonged political paralysis and the impact of the trade war provide compelling reasons to go slow on rate hikes. "The market's first instinct was to mark up political risk premia," said Shoki Omori, chief desk strategist at Mizuho Securities, referring to reports of Ishiba's resignation. Investors may struggle to position for the uncertainties around the multiple risks, and "consequently, the super-long sector may continue to exhibit subdued conditions through August, and possibly into September," he said. Ten-year Japanese government bond futures tumbled as much as 1.06 yen to 137.54 yen, their lowest since March 28. Japan's finance ministry has scaled back its issuance plan for super-long bonds in response to the surge in JGB yields and poor demand at auctions. The central bank is due to meet again on policy next week. BOJ Deputy Governor Shinichi Uchida said that the trade deal with the U.S. reduces uncertainty, after earlier warning that economic activity and prices were skewed to the downside. ($1 = 147.0300 yen)
Reuters
23-07-2025
- Business
- Reuters
Buyers flee Japanese bonds as political, fiscal risks rise
TOKYO, July 23 (Reuters) - Japanese government bonds tumbled on Wednesday, sending benchmark yields to near 17-year highs, as traders priced in increased political risks and a hazy outlook for the central bank's policy normalisation path. In a sign of how nervous markets are, the Ministry of Finance's first sale of super-long government debt since a bruising electoral defeat for Prime Minister Shigeru Ishiba logged the weakest demand in almost 14 years. In a whirlwind day of news, the United States and Japan announced a trade deal, speculation swirled that Ishiba planned to resign, and a Bank of Japan (BOJ) official warned of an economic slowdown. The 10-year JGB yield jumped as much as 10 basis points (bps) to 1.6%, marking its biggest move in months and the highest level since October 2008. Super-long term JGB yields hit record highs in May and are back near those levels as concerns mount over Japan's precarious finances. "We're seeing a possible buyers' strike playing through," said Chris Weston, head of research at broker Pepperstone. "Inflation is running far too hot for where interest rates are. The question is why would you buy at these levels?" he said, adding he expected the selloff could extend to UK gilts too. Sunday's defeat for Ishiba's Liberal Democratic Party and coalition partner Komeito follows their loss of a majority in the more powerful lower house last year. Opposition parties have advocated for tax cuts and increased government spending to help households deal with inflation. Ishiba plans to resign, a source close to the prime minister said. Local media reported the move could happen by the end of next month. However, the prime minister later said there was no truth to the media reports about his intentions. "Attention will soon turn to the next prime minister's policy agenda and any signals of recalibration from the BOJ as JGB yields climb," said Charu Chanana, chief investment strategist at Saxo. After the election defeat, investors expect whoever replaces the fiscally conservative Ishiba will support calls for more government spending, widening an already bloated fiscal deficit at nearly 2-1/2 times the size of Japan's economy. The election result also puts the Bank of Japan in a double bind as prospects of increased spending could keep inflation elevated while potentially prolonged political paralysis and the impact of the trade war provide compelling reasons to go slow on rate hikes. "The market's first instinct was to mark up political risk premia," said Shoki Omori, chief desk strategist at Mizuho Securities, referring to reports of Ishiba's resignation. Investors may struggle to position for the uncertainties around the multiple risks, and "consequently, the super-long sector may continue to exhibit subdued conditions through August, and possibly into September," he said. Ten-year Japanese government bond futures tumbled as much as 1.06 yen to 137.54 yen, their lowest since March 28. Japan's finance ministry has scaled back its issuance plan for super-long bonds in response to the surge in JGB yields and poor demand at auctions. The central bank is due to meet again on policy next week. BOJ Deputy Governor Shinichi Uchida said that the trade deal with the U.S. reduces uncertainty, after earlier warning that economic activity and prices were skewed to the downside. ($1 = 147.0300 yen)
Harvard Business Review
11-06-2025
- Business
- Harvard Business Review
Five Ways Companies Learn to Thrive in an Unpredictable World
by Courtney Rickert McCaffrey and Oliver Jones Geopolitics, and how to manage its potentially seismic risks, is an increasingly pressing concern for business leaders. References to geopolitics and political risk in corporate public documents skyrocketed 600% three years ago and remain three to four times higher than before 2022. And it's not just talk: Political risk—the decisions, events, and conditions that might affect the performance of a company, market, or economy—is having a material impact. The recent tariff announcements caused widespread disruption worldwide. While the scale and scope of these promised tariffs took many observers and markets by surprise, the underlying forces propelling the tariff agenda are both long-standing and global, contributing to this heightened emphasis on political risk appearing in corporate documents. Shaping Supply Chains Sixty percent of more than 1,000 global executives surveyed in EY-Parthenon's Geostrategy in Practice 2025 report said political risk harms their operations and supply chains. (These executives lead companies with more than $500 million in annual revenue, representing more than 20 sectors, including consumer and retail, advanced manufacturing and industrial products, life sciences, and technology.) Such supply chain impacts are unsurprising, given recent headline-making policymaker priorities. Governments worldwide have implemented industrial policies and trade protectionism around critical products and strategic sectors. There's also been greater use of sanctions and anti-sanctions policies and a flurry of regulatory activity, particularly around sustainability and artificial intelligence (AI). In response, most companies are taking strategic action. All executives surveyed said geopolitics had driven strategic changes at their companies, especially for supply chains. Nearly all (94%) said they had invested more time and resources in geostrategy over the past two years, and almost as many (93%) plan to invest more. The percentage of companies taking action across multiple levels of their organizations is also rising—from 24% in 2021 to 37% in 2025. But there is more work to be done. One-third of global executives say they were surprised by most or all political risks that affected their companies in the past two years, 77% of them at least half the time. So how do executives better prepare for future geopolitical and tariff shocks? Becoming a Geostrategist Leading the field in preparing for unexpected political risk are a group of companies EY-Parthenon classifies as 'Geostrategists.' These companies are those taking the most proactive and comprehensive actions to strategically manage geopolitical risk. They operate across all sectors but are concentrated in the retail, power and utilities, real estate and construction, and telecommunications and media industries. Since 2021, Geostrategists have increased in number by 50%. EY-Parthenon teams identified five habits common to successful Geostrategists: 1. They adapt supply chains to geopolitical realities. Geostrategists are more likely than other organizations to have altered their supply chains in response to political risks in the past two years, so they can more effectively manage geopolitical risks, remain resilient, and adapt to the increasingly complex global landscape. One manufacturing company surveyed maps its entire supply chain to identify pockets of risk and, when finding high risk, considers finding new suppliers or redesigning its products. And a life sciences company reconfigured its supply chain after finding vulnerabilities. 2. They build political risk analysis into investment decisions. Integrating political risk as they determine their investments helps Geostrategists enhance M&A success, optimize growth strategies, and save time and resources amid geopolitical uncertainties and macroeconomic challenges. For example, all Geostrategists conduct political risk due diligence when evaluating a potential transaction. 3. They prepare for the unexpected. Geostrategists are more likely to have invested in identifying and monitoring political risk and to use political risk scenario planning to design and test strategy. These strategies help prepare them for unexpected events, such as conflicts in Ukraine and the Middle East. 4. They regularly engage their boards on geostrategy. Geostrategists' boards are increasingly focused on geostrategy, with 85% incorporating political risk into future-oriented strategic decisions, including M&A and market entry. In 2025, 76% of boards took action on political risk—up from 26% in 2021. 5. They have the right roles at the geostrategy table. Geostrategists are more likely to have cross-functional and collaborative governance teams. In 2021, a function or business unit was the body most likely to have responsibility for geopolitics (52%). In 2025, it is a committee (52%, up from 39%). The number of executives involved has almost doubled, with the general counsel and chief compliance officer increasingly sharing responsibility with the chief risk officer. Geostrategy for Competitive Advantage It is not easy to become a Geostrategist. It requires investments in capabilities and is never 'finished.' But benchmarking against the habits of Geostrategists can help companies identify where to invest for resilience and growth—so they can anticipate and respond to political risk and seize potential opportunities more effectively than their peers.
Bloomberg
20-05-2025
- Business
- Bloomberg
Teneo's Kajiwara on C-Suite Sentiment Amid Tariff Tensions
Bloomberg Markets: The Close Kevin Kajiwara, Teneo co-president of political risk advisory, discusses the state of CEO sentiment amid recent tariff tensions on "Bloomberg The Close." (Source: Bloomberg)
