Following an assurance to President Biden by President Zelensky, Ukraine has been granted access to F-16 fighter jets from the United States to help defend against Russian incursions. The Ukraine’s fleet of aircraft has been outdated for some time, and this upgrade marks a significant increase in military capacity. The news has sparked concerns that the West is providing Ukraine with offensive weapons, prompting fears of a military escalation in the conflict. Ukraine has also secured additional aid from the US in the form of ammunition and is reportedly offered F-16s from some EU nations.
The idealistic vision of a world without nuclear weapons came to the fore this weekend following the G7 summit in Hiroshima, with Japanese prime minister Fumio Kishida using the forum as the backdrop to call for global peace and the end of nuclear arsenals. The last day of the talks was upstaged by the arrival of Ukrainian president, Volodymyr Zelenskyy, determined to raise support for the Ukrainian peace plan and show recalcitrant Republicans in Congress that withholding further assistance from his country would damage US leadership. Plans for a joint communication document that would align the G7 behind the Ukrainian peace plan came to nothing, but its message was transmitted nonetheless. Kishida outlined four principles that the participants had agreed on, with the importance of the United Nations charter and the rule of law, as well as projecting solidarity with Ukraine the main areas of accord.
Italy's Prime Minister Giorgia Meloni has pledged to back the recovery of areas in northern Italy damaged by recent floods which are estimated to have cause damage costing billions of euros and left 14 people dead. Speaking after touring areas around the city of Ravenna, Meloni, who left the G7 summit early to visit affected areas, stated that she would find the resources needed to aid recovery efforts and may call upon the European Union's Solidarity Fund. Agricultural regions, including fruit producers, have also been badly affected.
China's cyber regulator, The Cyberspace Administration of China, has announced that US chip maker Micron Technology poses a significant security risk to China's critical information infrastructure supply chain and has ordered critical national infrastructure operators to stop purchasing its products and banned it from China's market. The ban, viewed as retaliation against US efforts to curb China's access to technology, follows a seven-week investigation into Micron by the CAC. China is an important market for Micron, with China and Hong Kong generating 25% of its $30.8bn revenue last year.
The Chinese Cyberspace Administration has prohibited the country's operators from buying US chipmaker Micron Technology's products over concerns of “serious network security risks”. The ban is the first big measure taken against a US semiconductor group and follows a seven-week investigation into Idaho-based Micron by the CAC, seen as retaliation for US efforts to curb China’s access to key technology. Washington introduced extensive chip export controls last October and since then, the Netherlands and Japan have followed. China is a crucial market for Micron and analysts have warned that Beijing’s restrictions could even provoke Chinese firms that provide “critical information infrastructure” to eliminate Micron from their supply chains.
The People's Bank of China is expected to keep key lending rates unchanged on Monday as Asian traders digest the implications of the G7's stance on China and the tense situation in Washington regarding the US debt ceiling. The main regional drivers for Asian markets this week will be policy decisions in New Zealand, South Korea and Indonesia, inflation figures from Singapore and Malaysia, and Japanese unemployment and retail sales. Later in the week, the Reserve Bank of New Zealand is expected to raise its cash rate one last time by 25 basis points to 5.50%, while Bank of Korea and Bank Indonesia are seen keeping their benchmark rates on hold at 3.50% and 5.75%, respectively.
Foreign buying of Japanese stocks has surged over the past month, with investors buying a net $44bn worth of securities since the beginning of April. Investors are now questioning whether this is the start of a new bull market. Goldman Sachs recently suggested that Japan is nearing a once-in-a-decade bull market. Warren Buffet, who recently increased his investment in Japan’s five largest trading houses, is also proceeding with caution as he considers adding to his investments. Although he views Japan as a safe place to put money, it might not necessarily mean a sustained bull market. The current froth in the market could fall if the Bank of Japan (BoJ) ever undertakes normalization, as Japan’s demographic problems and rapidly shrinking workforce will cause multiple challenges, particularly to tech and auto giants.
As the Nikkei Stock Average hit its highest point since 1990, Japan equity watchers were under more scrutiny than ever before. Fidelity International hosted its first online briefing solely on Japanese equities in years as a result.
Australian rugby coach Eddie Jones may have to request more "Giteau Law" picks if he wants to make his squad more competitive for the upcoming World Cup. The law is attributed to veteran back Matt Giteau, who had overseas rugby experience when he returned to play for the Wallabies, despite the national team having a policy against picking overseas players. There is a limit to three picks per series, and it is rumoured that five overseas-based players are in line or merit a spot on the squad. They are Samu Kerevi, Quade Cooper, Bernard Foley, Marika Koroibete, and Will Skelton. Foley and Skelton have been in top form, potentially warranting a spot on the squad. However, it is unclear if all five players can be accommodated without using the Giteau Law. Jones is expected to discuss the issue with the Rugby Australia hierarchy later in the year.
Russia's threats to use nuclear weapons against Ukraine have serious implications for the global nuclear nonproliferation regime. It could weaken the effectiveness and trust in the negative security assurances made by the major nuclear powers. Russia's nuclear threat against Ukraine undermines the self-restraint that underpins the NPT regime. If the threat were to be carried out, it could set a dangerous precedent of a nuclear power using nuclear weapons against a non-nuclear state. This article argues that while Russia has hinted at the possibility of using tactical nuclear weapons in the war, the effectiveness of using such weapons would be low and would damage the Russian military. It also argues that US intervention is unlikely and that a combination of Ukraine's efforts to resist Russian nuclear blackmail and enhancing Ukraine's military capabilities with the help of arms provision from other countries in addition to US nuclear deterrence are essential.
Russia’s nuclear doctrine and statements made by Putin indicate Moscow’s intention to use nuclear weapons strategically, including low-yield tactical nuclear weapons. Russia’s missile strikes on Ukrainian cities are a manifestation of Russia’s strategic, non-nuclear ‘deterrence.’ This could lead to Russia using low-yield tactical nuclear weapons against cities or high-value targets, further exacerbating the situation. Ukraine is a non-nuclear state that cannot deter Russia’s nuclear threats with nuclear weapons. The US is unlikely to retaliate with force, including nuclear weapons. The current US nuclear posture may not be enough to deter Russia’s nuclear blackmail. Therefore, a combination of efforts, including Ukraine’s conventional warfare, enhancing Ukraine’s military capabilities with arms provisions from other countries, and US nuclear deterrence may be essential in deterring Russia’s nuclear blackmail.
Activist Oasis urges Hokuetsu shareholders to vote against president re-election
Reuters
23-05-22 00:49
Activist investor Oasis Management has called on shareholders of Japanese paper manufacturer Hokuetsu Corp to vote against the re-election of President Seiko Kishimoto at the firm's annual general meeting. Oasis, which holds an 18% stake in the company stated that Kishimoto's departure would enhance Hokuetsu's corporate value over the long term.
China's Vice Foreign Minister has called the Japanese ambassador to protest Japan's role in "activities and joint declarations" against China made during the G7 summit. In a statement calling on Japan to "grasp strategic autonomy," China's Vice Foreign Minister urged Japan to respect the four political documents between the two countries and warned that Japan was violating the basic principles of international law. The meeting marks the latest in a long-standing dispute over Chinese policies. Meanwhile, the Chinese embassy in London has also requested that the UK halt all criticism of China in order to avoid a damage to relations.
Morgan Stanley CEO James Gorman has announced that he will be stepping down within a year, but will remain as executive chairman with a yet-to-be-revealed successor to take his place as CEO. Under Gorman's leadership since 2010, the firm made a series of major acquisitions, including Eaton Vance, E*Trade and Solium Capital, transforming it into a wealth management firm that manages up to $15tn. Gorman has so far made no announcement regarding the length of his tenure as executive chairman. Morgan Stanley's co-presidents Ted Pick and Andy Saperstein, along with head of investment management Dan Simkowitz, are viewed as potential successors to Gorman.
China's Cyberspace Administration has banned US semiconductor company Micron in its technology battle with the United States. The state cyber agency claimed that Micron's components posed significant security risks to China's critical information infrastructure supply chain, thereby affecting national security. The US Commerce Department responded by saying that there was no basis in fact for Beijing's claim and that it would continue to try to limit industry disruptions with its allies. Micron has yet to identify the products that have been barred. China has previously blacklisted US technology companies, cut off the flow of processors and barred Americans from helping the Chinese chip industry.
The Topix index in Japan is at a 30-year high and experts are pointing to three causes for what they describe as "the Japan rally". The first factor is a change in corporate attitudes towards shareholders and activism that is swinging opinion in favour of changes such as increased return on equity. Many activists are targeting capital-inefficient companies, including those with price-to-book ratios below 1. The second factor is a rise in Japanese inflation that is seen as an end to the country's long-standing deflation problem. The third reason is the falling appeal of Chinese markets. Some investors who might have looked to China are instead turning to Japan for Asia exposure, a stand-off between China's government and Big Tech having made some corporate managers ill at ease. Critics says these cheers should be tempered by concerns over cyclical weakness elsewhere and the possibility of corporate disquiet.
Ukrainian President Volodymyr Zelensky spoke during a visit to the Hiroshima Peace Memorial, as part of a wider visit to Japan for the G7 meeting. He used the opportunity to talk about the devastation of war and the need to rebuild, highlighting the ongoing conflict in Ukraine where he said people are struggling to rebuild their homes after Russian strikes. Zelensky's trip comes as the G7 nations consider stepping up pressure on Russia to end the war as they believe the economic damage it is causing could influence other countries to intervene.
A major fire that broke out in the Manila Central Post Office building, which was built 97 years ago, has destroyed the iconic structure and all of the letters, parcels and other records that were stored inside. The fire was not equipped with sprinklers and took more than eight hours for firefighters to put out. Investigations are underway to determine the cause of the blaze, which has severely damaged a site that was declared a national landmark in 2018.
China's demographic data is 'unreliable'. Local governments have an incentive to inflate population figures, because more residents mean larger financial transfers from the central government, while households might claim to have more members in order to receive more benefits from local governments, the author argues. There is also political incentive to inflate birth figures. For example, to show that the shift from a one- to a two-child policy worked, the National Health and Family Planning Commission announced 18.85 million births in 2016, a 27% increase from the previous year. In Shandong and Zhejiang provinces, the reported increase was even larger: 56% and 75%, respectively. However, the simplest explanation is that it never happened. The number of administered doses of the Bacillus Calmette-Guerin vaccine (which is required for every newborn) barely increased in 2016. While population aging may not directly cause economic recession, a higher aging index – the number of people aged 59 and over per 100 individuals younger than 15 – has a strong negative correlation with GDP growth, as does higher median age and proportion of people over 59.
As Tesla and BYD step up electric vehicle production, the chief executives of five Japanese automakers have released a unified message encouraging the need for a diverse approach to powertrains and alternative fuels to achieve more environmentally responsible vehicles. Japan's largest passenger car exporter, the Japan Automobile Manufacturers Association (JAMA), exhibited a range of hydrogen and carbon neutral fuel vehicles throughout the recent G7 summit alongside EVs. JAMA's united voice is in contrast to that of the European Automobile Manufacturers' Association, which in 2020 lost several members for failing to agree on the best way to tackle climate change.
Mizuho Financial Group has agreed to acquire US investment bank Greenhill & Co for $15 per share, in a deal worth $550m. The sale will help the Japanese bank expand its financial business in the US. Greenhill went public almost 30 years ago and was a pioneer in the boutique M&A arena. However, shares in the firm have struggled amid stiff competition from larger rivals in recent years. Greenhill will be housed within Mizuho's existing banking division and led by the current head of banking for the Americas, Michal Katz.
