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The US Federal Reserve held interest rates steady on Wednesday but signalled that rate cuts could still be on the table later this year. Yet a fresh risk has emerged on the horizon: President Donald Trump’s sweeping new import tariffs.&nbsp;&nbsp;Fed Chair Jerome Powell warned that the new duties could trigger a surge in inflation this summer, complicating the central bank’s plan to begin easing monetary policy.&nbsp;“Everyone that I know is forecasting a meaningful increase in inflation in coming months from tariffs,” Powell said, as quoted by Reuters. He warned that although inflation readings had been favourable recently, the full cost of tariffs would eventually hit consumers.&nbsp;The Fed’s decision kept its benchmark overnight interest rate in the 4.25–4.50 per cent range, the highest in over two decades.&nbsp;&nbsp;Policymakers still project two rate cuts before the end of 2025, but they have scaled back the pace of future easing amid rising uncertainty over trade policy, economic growth, and price stability.<h2>Powell: “Cost shock is coming”</h2>Despite the inflationary outlook improving over recent months, Powell said the Fed would need more time to understand how tariffs would impact price pressures.&nbsp;“If not for tariffs, rate cuts might actually be in order,” he said, according to Reuters.He explained that producers, manufacturers, importers, and retailers are still locked in a complex struggle over who will absorb the cost of the tariffs. “We’ll make smarter and better decisions if we just wait a couple of months or however long it takes to get a sense of what the pass-through of inflation is going to be,” he added.<h2>Growth slows, inflation sticks, joblessness rises</h2>The Fed’s updated economic projections revealed a stagflationary tilt. Gross domestic product growth is forecast to slow to 1.4 per cent in 2025, down from 1.7 per cent predicted in March.&nbsp;&nbsp;At the same time, unemployment is projected to rise to 4.5 per cent by year-end, up from the 4.4 per cent earlier estimate. The unemployment rate in May was already ticking up at 4.2 per cent.&nbsp;Headline inflation is now expected to end 2025 at 3 per cent—well above the Fed’s 2 per cent target. Core inflation, which excludes food and energy, is projected to stay elevated at 2.4 per cent through 2026 before finally cooling to 2.1 per cent in 2027.&nbsp;This confluence of weaker growth, rising joblessness and sticky inflation underscores the Fed’s challenge: avoiding a policy misstep as tariffs and global shocks collide with domestic economic weakness.<h2>Trump lashes out at Powell</h2>President Trump, facing both economic headwinds and geopolitical turmoil, lashed out at the Fed during a campaign stop on Wednesday.&nbsp;“Powell is stupid,” Trump said, as quoted by Reuters, demanding that the central bank “slash rates in half”—a move typically associated with financial crises or deep recessions. The president even joked about installing himself as Fed chairman.&nbsp;Despite the pressure, Powell held the line. “No one holds these rate paths with a great deal of conviction,” he responded, reiterating that all decisions remain data dependent.<h2>Fed splits as trade fog clouds outlook</h2>The Fed has already delivered three rate cuts in 2024, the last of which came in December. But in 2025, it has hit pause—waiting for clarity on inflation, trade, and labour market resilience.&nbsp;In a notable sign of internal disagreement, seven of the 19 Fed policymakers now believe no further cuts will be needed this year. “It’s a foggy time,” Powell admitted, as per Reuters, highlighting how uncertainty over Trump’s tariff trajectory is keeping policymakers divided.<h2>Markets steady, oil climbs, geopolitics tense</h2>The US equity markets were largely unmoved by the Fed’s decision. The Dow Jones Industrial Average slipped 0.10 per cent, the S&amp;P 500 edged down 0.03 per cent, while the Nasdaq Composite rose 0.13 per cent.&nbsp;Meanwhile, oil prices continued to climb amid the Israel–Iran conflict. Brent crude settled at 76.70 US dollars per barrel, while West Texas Intermediate rose to 75.14 dollars, both rebounding after early-session declines. On Tuesday, prices had jumped more than 4 per cent.&nbsp;Geopolitics remained tense. Iranian Supreme Leader Ayatollah Ali Khamenei publicly rejected Trump’s demand for unconditional surrender. When asked if Iran’s regime might collapse, Trump responded: “Sure, anything could happen.”<h2>Bond markets react to inflation fears</h2>US Treasury markets reacted cautiously. The 10-year Treasury yield closed unchanged at 4.391 per cent. However, the rate-sensitive two-year yield dipped to 3.939 per cent, down 1.1 basis points from the previous session.&nbsp;Earlier this year, yields had surged on 2 April after Trump unveiled higher-than-expected tariffs—spooking foreign investors and raising fears of capital flight from US debt markets. Although delayed implementation calmed the markets, Powell’s inflation warnings this week have reignited those concerns.<h2>Retail sales slump, job market shows cracks</h2>Recent economic data have added to the sense of slowdown. Retail sales dropped by 0.9 per cent in May—the sharpest monthly decline in four months. At the same time, jobless claims remain at levels consistent with a softening labour market.&nbsp;Despite this, Powell maintained that the broader picture remains stable. “Labour market conditions are still solid,” he said, echoing the Fed’s official statement.<h2>What lies ahead?</h2>The next Fed meeting is scheduled for 16–17 September, with traders now seeing that as the earliest possible window for a rate cut. But much depends on the actual implementation of Trump’s tariff package—and whether its impact is absorbed or passed directly onto households.&nbsp;“For the time being, we are well positioned to wait to learn more about the likely course of the economy,” Powell said, as quoted by Reuters.&nbsp;With markets closed on Thursday for the Juneteenth holiday, investors are bracing for a volatile second half of the year.&nbsp;(With inputs from the agencies) &nbsp;

Fed Chair Powell flags inflation risks from Trump sweeping tariffs as growth slows and unemployment rises, complicating the path for US rate cuts in 2025.

The US Federal Reserve held interest rates steady on Wednesday but signalled that rate cuts could still be on the table later this year. Yet a fresh risk has emerged on the horizon: President Donald Trump’s sweeping new import tariffs. Fed Chair Jerome Powell warned that the new duties could trigger a surge in inflation this summer, complicating the central bank’s plan to begin easing monetary policy. “Everyone that I know is forecasting a meaningful increase in inflation in coming months from tariffs,” Powell said, as quoted by Reuters. He warned that although inflation readings had been favourable recently, the full cost of tariffs would eventually hit consumers. The Fed’s decision kept its benchmark overnight interest rate in the 4.25–4.50 per cent range, the highest in over two decades. Policymakers still project two rate cuts before the end of 2025, but they have scaled back the pace of future easing amid rising uncertainty over trade policy, economic growth, and price stability. Powell: “Cost shock is coming” Despite the inflationary outlook improving over recent months, Powell said the Fed would need more time to understand how tariffs would impact price pressures. “If not for tariffs, rate cuts might actually be in order,” he said, according to Reuters. He explained that producers, manufacturers, importers, and retailers are still locked in a complex struggle over who will absorb the cost of the tariffs. “We’ll make smarter and better decisions if we just wait a couple of months or however long it takes to get a sense of what the pass-through of inflation is going to be,” he added. Growth slows, inflation sticks, joblessness rises The Fed’s updated economic projections revealed a stagflationary tilt. Gross domestic product growth is forecast to slow to 1.4 per cent in 2025, down from 1.7 per cent predicted in March. At the same time, unemployment is projected to rise to 4.5 per cent by year-end, up from the 4.4 per cent earlier estimate. The unemployment rate in May was already ticking up at 4.2 per cent. Headline inflation is now expected to end 2025 at 3 per cent—well above the Fed’s 2 per cent target. Core inflation, which excludes food and energy, is projected to stay elevated at 2.4 per cent through 2026 before finally cooling to 2.1 per cent in 2027. This confluence of weaker growth, rising joblessness and sticky inflation underscores the Fed’s challenge: avoiding a policy misstep as tariffs and global shocks collide with domestic economic weakness. Trump lashes out at Powell President Trump, facing both economic headwinds and geopolitical turmoil, lashed out at the Fed during a campaign stop on Wednesday. “Powell is stupid,” Trump said, as quoted by Reuters, demanding that the central bank “slash rates in half”—a move typically associated with financial crises or deep recessions. The president even joked about installing himself as Fed chairman. Despite the pressure, Powell held the line. “No one holds these rate paths with a great deal of conviction,” he responded, reiterating that all decisions remain data dependent. Fed splits as trade fog clouds outlook The Fed has already delivered three rate cuts in 2024, the last of which came in December. But in 2025, it has hit pause—waiting for clarity on inflation, trade, and labour market resilience. In a notable sign of internal disagreement, seven of the 19 Fed policymakers now believe no further cuts will be needed this year. “It’s a foggy time,” Powell admitted, as per Reuters, highlighting how uncertainty over Trump’s tariff trajectory is keeping policymakers divided. Markets steady, oil climbs, geopolitics tense The US equity markets were largely unmoved by the Fed’s decision. The Dow Jones Industrial Average slipped 0.10 per cent, the S&P 500 edged down 0.03 per cent, while the Nasdaq Composite rose 0.13 per cent. Meanwhile, oil prices continued to climb amid the Israel–Iran conflict. Brent crude settled at 76.70 US dollars per barrel, while West Texas Intermediate rose to 75.14 dollars, both rebounding after early-session declines. On Tuesday, prices had jumped more than 4 per cent. Geopolitics remained tense. Iranian Supreme Leader Ayatollah Ali Khamenei publicly rejected Trump’s demand for unconditional surrender. When asked if Iran’s regime might collapse, Trump responded: “Sure, anything could happen.” Bond markets react to inflation fears US Treasury markets reacted cautiously. The 10-year Treasury yield closed unchanged at 4.391 per cent. However, the rate-sensitive two-year yield dipped to 3.939 per cent, down 1.1 basis points from the previous session. Earlier this year, yields had surged on 2 April after Trump unveiled higher-than-expected tariffs—spooking foreign investors and raising fears of capital flight from US debt markets. Although delayed implementation calmed the markets, Powell’s inflation warnings this week have reignited those concerns. Retail sales slump, job market shows cracks Recent economic data have added to the sense of slowdown. Retail sales dropped by 0.9 per cent in May—the sharpest monthly decline in four months. At the same time, jobless claims remain at levels consistent with a softening labour market. Despite this, Powell maintained that the broader picture remains stable. “Labour market conditions are still solid,” he said, echoing the Fed’s official statement. What lies ahead? The next Fed meeting is scheduled for 16–17 September, with traders now seeing that as the earliest possible window for a rate cut. But much depends on the actual implementation of Trump’s tariff package—and whether its impact is absorbed or passed directly onto households. “For the time being, we are well positioned to wait to learn more about the likely course of the economy,” Powell said, as quoted by Reuters. With markets closed on Thursday for the Juneteenth holiday, investors are bracing for a volatile second half of the year. (With inputs from the agencies)

The Fed holds rates steady but warns Trump’s new tariffs may trigger fresh inflation, casting doubt on future rate cuts and economic stability.

Fed holds rates as Trump tariffs threaten inflation shock: What it means for your money

The US dollar had recently plunged to its lowest level in three years, driven by a combination of US trade policy shifts and expectations of Federal Reserve rate cuts.&nbsp;This sharp depreciation, which has seen the dollar drop nearly 10 per cent against a basket of major currencies, has reverberated across global markets, causing ripple effects on economic growth and inflation worldwide.The dollar’s steep drop this year comes at a time when the Trump administration’s policies, including its unpredictable trade stance and pressure on the Federal Reserve, have unsettled global investors.&nbsp;The trade tariffs imposed under Trump’s leadership have altered trade relations, while his administration’s push for significant tax cuts amid rising deficits has further strained market confidence.&nbsp;The combination of these factors, along with Trump's apparent indifference to a weakening dollar, has raised concerns among financial experts. The dollar has now lost ground against almost every major currency, including the euro, pound, and Swiss franc.<h2>Scandinavia's currencies surge</h2>Among the standout performers this year are the Scandinavian currencies. The Swedish crown has surged 14 per cent, marking its best performance against the US dollar in over five decades.&nbsp;Similarly, Norway’s crown has climbed nearly 12 per cent, its strongest run since 2008. This strength can largely be attributed to the dollar's weakness, with Sweden’s currency rising by just 4 per cent against the euro and Norway’s by 1.8 per cent. Despite expectations that Sweden will cut interest rates due to slowing inflation, its currency remains resilient.<h2>Safe-haven currencies benefit</h2>The euro, Swiss franc, and Japanese yen have all benefited from the dollar’s fall, rising approximately 10 per cent this year. However, this strength has its own set of complications.&nbsp;In Switzerland, the strengthening franc has caused deflationary pressures, as imported goods become cheaper, raising concerns about further interest rate cuts by the Swiss National Bank. The European Central Bank is also wary of the rising euro, as it risks exacerbating deflationary pressures within the Eurozone. Meanwhile, Japan is grappling with the challenges of a stronger yen, which could hurt its export-driven economy.<h2>Shifting capital flows</h2>In Asia, currencies tied closely to manufacturing have strengthened as well, as capital previously parked in US assets begins to flow back into the region. Taiwan’s dollar surged by 10 per cent in May alone and is up nearly 12 per cent this year.&nbsp;South Korea’s won has also gained around 10 per cent, while Singapore’s dollar, Malaysia’s ringgit, and Thailand’s baht have all risen by 6 per cent. However, China's yuan has lagged, gaining only 2 per cent offshore, partly due to Beijing's efforts to manage its currency within tightly controlled parameters.<h2>Mexico’s peso shows resilience</h2>Despite early pressure from US trade policies, Mexico's peso has bounced back strongly, reaching its highest levels since last August. As US-Mexico trade tensions begin to ease, there are expectations that the peso could strengthen further.&nbsp;Meanwhile, Argentina’s peso remains one of the year’s weakest performers, primarily due to domestic economic policies, but a recent $20 billion loan agreement with the IMF has helped stabilise the situation.<h2>Sterling’s rally amid growing concerns</h2>The British pound has seen a solid 9 per cent increase against the dollar, hitting its highest levels in over three years. However, softer economic data has raised expectations of potential rate cuts by the Bank of England, which could dampen the pound’s rally.&nbsp;Despite this, foreign buyers are reportedly rushing to snap up UK assets before further dollar weakness makes future transactions more expensive.<h2>A global shift in financial sentiment</h2>The fall of the dollar is reshaping global financial dynamics. As investors seek alternatives, such as the Swiss franc, euro, and Scandinavian currencies, the traditional role of the dollar as a safe haven asset is being questioned.&nbsp;The knock-on effects are reverberating through global markets, highlighting the vulnerabilities of the US economy in a time of rising fiscal deficits and unstable trade relations. With global investors reassessing their exposure to the US dollar, the future of the world’s most dominant currency is becoming increasingly uncertain.&nbsp;(With inputs from agencies)

Global markets are grappling with the fallout from the US currency’s biggest slump in years.

The US dollar had recently plunged to its lowest level in three years, driven by a combination of US trade policy shifts and expectations of Federal Reserve rate cuts. This sharp depreciation, which has seen the dollar drop nearly 10 per cent against a basket of major currencies, has reverberated across global markets, causing ripple effects on economic growth and inflation worldwide. The dollar’s steep drop this year comes at a time when the Trump administration’s policies, including its unpredictable trade stance and pressure on the Federal Reserve, have unsettled global investors. The trade tariffs imposed under Trump’s leadership have altered trade relations, while his administration’s push for significant tax cuts amid rising deficits has further strained market confidence. The combination of these factors, along with Trump's apparent indifference to a weakening dollar, has raised concerns among financial experts. The dollar has now lost ground against almost every major currency, including the euro, pound, and Swiss franc. Scandinavia's currencies surge Among the standout performers this year are the Scandinavian currencies. The Swedish crown has surged 14 per cent, marking its best performance against the US dollar in over five decades. Similarly, Norway’s crown has climbed nearly 12 per cent, its strongest run since 2008. This strength can largely be attributed to the dollar's weakness, with Sweden’s currency rising by just 4 per cent against the euro and Norway’s by 1.8 per cent. Despite expectations that Sweden will cut interest rates due to slowing inflation, its currency remains resilient. Safe-haven currencies benefit The euro, Swiss franc, and Japanese yen have all benefited from the dollar’s fall, rising approximately 10 per cent this year. However, this strength has its own set of complications. In Switzerland, the strengthening franc has caused deflationary pressures, as imported goods become cheaper, raising concerns about further interest rate cuts by the Swiss National Bank. The European Central Bank is also wary of the rising euro, as it risks exacerbating deflationary pressures within the Eurozone. Meanwhile, Japan is grappling with the challenges of a stronger yen, which could hurt its export-driven economy. Shifting capital flows In Asia, currencies tied closely to manufacturing have strengthened as well, as capital previously parked in US assets begins to flow back into the region. Taiwan’s dollar surged by 10 per cent in May alone and is up nearly 12 per cent this year. South Korea’s won has also gained around 10 per cent, while Singapore’s dollar, Malaysia’s ringgit, and Thailand’s baht have all risen by 6 per cent. However, China's yuan has lagged, gaining only 2 per cent offshore, partly due to Beijing's efforts to manage its currency within tightly controlled parameters. Mexico’s peso shows resilience Despite early pressure from US trade policies, Mexico's peso has bounced back strongly, reaching its highest levels since last August. As US-Mexico trade tensions begin to ease, there are expectations that the peso could strengthen further. Meanwhile, Argentina’s peso remains one of the year’s weakest performers, primarily due to domestic economic policies, but a recent $20 billion loan agreement with the IMF has helped stabilise the situation. Sterling’s rally amid growing concerns The British pound has seen a solid 9 per cent increase against the dollar, hitting its highest levels in over three years. However, softer economic data has raised expectations of potential rate cuts by the Bank of England, which could dampen the pound’s rally. Despite this, foreign buyers are reportedly rushing to snap up UK assets before further dollar weakness makes future transactions more expensive. A global shift in financial sentiment The fall of the dollar is reshaping global financial dynamics. As investors seek alternatives, such as the Swiss franc, euro, and Scandinavian currencies, the traditional role of the dollar as a safe haven asset is being questioned. The knock-on effects are reverberating through global markets, highlighting the vulnerabilities of the US economy in a time of rising fiscal deficits and unstable trade relations. With global investors reassessing their exposure to the US dollar, the future of the world’s most dominant currency is becoming increasingly uncertain. (With inputs from agencies)

Global markets are grappling with the fallout from the US currency’s biggest slump in years.

As Trump fiddles with trade, dollar’s dramatic decline sparks global repercussions

Elon Musk’s artificial intelligence startup, xAI, is racing against time to secure $9.3 billion in new debt and equity funding, but it’s not just about the money; it’s about the staggering pace at which the company is burning through it.&nbsp;Even before the funds hit the bank, xAI’s plans to spend over half of the new capital in just the next three months underscore the dire financial realities of the AI industry.xAI, which is responsible for the development of the AI-powered chatbot Grok, projects it will burn through about $13 billion in 2025, or over $1 billion per month, just to maintain its operations.&nbsp;This excessive cash burn is emblematic of the immense financial demands that all AI companies are facing as they build the necessary infrastructure—from massive server farms to expensive specialised chips—to train next-generation AI models.Musk’s startup, which only launched in 2023, is struggling to generate revenue at the same rate as some of its larger competitors. While ChatGPT creator OpenAI is on track to generate $12.7 billion in revenue this year, xAI’s revenues are expected to be just $500 million, with hopes of crossing the $2 billion mark in 2026. With such a cash burn rate and low revenue streams, xAI’s ability to secure financing remains crucial to its survival.The AI industry’s financial burden is not unique to xAI. The costs associated with developing advanced AI models, from the infrastructure and compute power to the data storage and model training, are placing extreme financial pressure on all players in the space.&nbsp;Venture capital (VC) firms are investing billions of dollars into AI, but there’s growing concern about the ability of these companies to reach profitability. As the industry grows, investors are increasingly asking questions about AI companies’ ability to survive the cash burn and find paths to sustainable profits.<h2>The struggle for profitability</h2>xAI is not an isolated case. Across the industry, many AI startups are burning through cash at an accelerated rate. According to a recent report by Silicon Valley Bank (SVB), AI startups now burn through capital twice as fast as their counterparts from previous years.&nbsp;While this rapid scaling may promise massive returns in the future, it also increases the risk of financial instability, especially when revenue growth does not keep up with the mounting operational costs.AI startups, particularly those involved in generative AI (GenAI), face a unique set of financial challenges. Unlike traditional software companies, where development costs are incurred once and can scale infinitely, AI companies must contend with ongoing operational costs for computing power, data storage, and continuous model updates.&nbsp;This creates a structural margin crisis where each increase in workload consumes more money than it generates in revenue. Essentially, AI companies need to make massive investments in infrastructure while finding ways to monetise their technology without hitting margins that are too thin.<h2>The “ZombieCorn” phenomenon</h2>This rapid cash burn without profitability has given rise to the term ZombieCorn, describing startups with unicorn valuations but little to no revenue growth or clear exit strategies.&nbsp;These companies are often trapped in an endless cycle of fundraising just to stay afloat, without any viable path to sustainable growth. As more and more AI startups join the ranks of these ZombieCorn companies, the spectre of a “dot-com bubble 2.0” looms large over the industry.The situation is particularly grim for companies with high valuations but no profits. While there are still mega-rounds of funding for certain AI companies, the vast majority of AI startups are struggling to find capital.&nbsp;As SVB's report highlights, AI-focused funds now account for a disproportionate share of venture capital, attracting about 40 per cent of the capital raised in 2024, despite constituting only 15 per cent of all VC funds.&nbsp;This market concentration means that smaller companies are being squeezed out, while those with high valuations, like xAI, must contend with the pressures of rapid cash burn and intense competition for limited funding.<h2>AI’s margin stack crisis</h2>The financial troubles of startups like xAI are part of a broader trend in the AI industry, often referred to as the AI margin stacking problem. This issue refers to the compounding costs at each layer of the AI technology stack, which erode profit margins despite high demand for AI solutions.&nbsp;From the data centres that host AI models to the algorithms that process information and the interfaces that deliver results, each component of the AI stack comes with its own set of expenses that gradually eat into profitability.Take OpenAI as a case study. Despite projected revenues of $12.7 billion by 2025, the company is still facing enormous losses, with internal projections suggesting it will lose more than $20 billion by 2027.&nbsp;The cost of training and running AI models like ChatGPT continues to increase, forcing firms to find new ways to optimise their operations and reduce infrastructure expenses. While OpenAI’s model is expected to become more profitable in the long term, particularly as emerging AI products begin to drive sales, the near-term financial pressures are hard to ignore.The AI industry's margin crisis has far-reaching implications for investors. As AI startups continue to burn capital at unprecedented rates, venture capital firms are becoming more selective about where they place their money.&nbsp;Investors now care as much about margin trajectory as they do about total addressable market (TAM) and growth rates. With valuations of AI companies being compressed due to these margin concerns, founders must increasingly focus on long-term sustainability, cost optimisation, and careful management of their financials.<h2>Can AI become profitable?</h2>Despite these significant financial challenges, the AI industry’s potential remains undeniable. AI is transforming industries, from healthcare and finance to marketing and entertainment, with the promise of increasing productivity and creating new value.&nbsp;However, for many startups, the road to profitability is still long and uncertain. The question is not whether the AI market will grow but who will be able to survive long enough to benefit from it.For now, the financial pressure on AI startups remains intense, with only the most disciplined and well-managed companies likely to survive the turbulent years ahead.

Even before the funds hit the bank, xAI’s plans to spend over half of the new capital in just the next three months underscore the dire financial realities of the AI industry.

Elon Musk’s artificial intelligence startup, xAI, is racing against time to secure $9.3 billion in new debt and equity funding, but it’s not just about the money; it’s about the staggering pace at which the company is burning through it. Even before the funds hit the bank, xAI’s plans to spend over half of the new capital in just the next three months underscore the dire financial realities of the AI industry. xAI, which is responsible for the development of the AI-powered chatbot Grok, projects it will burn through about $13 billion in 2025, or over $1 billion per month, just to maintain its operations. This excessive cash burn is emblematic of the immense financial demands that all AI companies are facing as they build the necessary infrastructure—from massive server farms to expensive specialised chips—to train next-generation AI models. Musk’s startup, which only launched in 2023, is struggling to generate revenue at the same rate as some of its larger competitors. While ChatGPT creator OpenAI is on track to generate $12.7 billion in revenue this year, xAI’s revenues are expected to be just $500 million, with hopes of crossing the $2 billion mark in 2026. With such a cash burn rate and low revenue streams, xAI’s ability to secure financing remains crucial to its survival. The AI industry’s financial burden is not unique to xAI. The costs associated with developing advanced AI models, from the infrastructure and compute power to the data storage and model training, are placing extreme financial pressure on all players in the space. Venture capital (VC) firms are investing billions of dollars into AI, but there’s growing concern about the ability of these companies to reach profitability. As the industry grows, investors are increasingly asking questions about AI companies’ ability to survive the cash burn and find paths to sustainable profits. The struggle for profitability xAI is not an isolated case. Across the industry, many AI startups are burning through cash at an accelerated rate. According to a recent report by Silicon Valley Bank (SVB), AI startups now burn through capital twice as fast as their counterparts from previous years. While this rapid scaling may promise massive returns in the future, it also increases the risk of financial instability, especially when revenue growth does not keep up with the mounting operational costs. AI startups, particularly those involved in generative AI (GenAI), face a unique set of financial challenges. Unlike traditional software companies, where development costs are incurred once and can scale infinitely, AI companies must contend with ongoing operational costs for computing power, data storage, and continuous model updates. This creates a structural margin crisis where each increase in workload consumes more money than it generates in revenue. Essentially, AI companies need to make massive investments in infrastructure while finding ways to monetise their technology without hitting margins that are too thin. The “ZombieCorn” phenomenon This rapid cash burn without profitability has given rise to the term ZombieCorn, describing startups with unicorn valuations but little to no revenue growth or clear exit strategies. These companies are often trapped in an endless cycle of fundraising just to stay afloat, without any viable path to sustainable growth. As more and more AI startups join the ranks of these ZombieCorn companies, the spectre of a “dot-com bubble 2.0” looms large over the industry. The situation is particularly grim for companies with high valuations but no profits. While there are still mega-rounds of funding for certain AI companies, the vast majority of AI startups are struggling to find capital. As SVB's report highlights, AI-focused funds now account for a disproportionate share of venture capital, attracting about 40 per cent of the capital raised in 2024, despite constituting only 15 per cent of all VC funds. This market concentration means that smaller companies are being squeezed out, while those with high valuations, like xAI, must contend with the pressures of rapid cash burn and intense competition for limited funding. AI’s margin stack crisis The financial troubles of startups like xAI are part of a broader trend in the AI industry, often referred to as the AI margin stacking problem. This issue refers to the compounding costs at each layer of the AI technology stack, which erode profit margins despite high demand for AI solutions. From the data centres that host AI models to the algorithms that process information and the interfaces that deliver results, each component of the AI stack comes with its own set of expenses that gradually eat into profitability. Take OpenAI as a case study. Despite projected revenues of $12.7 billion by 2025, the company is still facing enormous losses, with internal projections suggesting it will lose more than $20 billion by 2027. The cost of training and running AI models like ChatGPT continues to increase, forcing firms to find new ways to optimise their operations and reduce infrastructure expenses. While OpenAI’s model is expected to become more profitable in the long term, particularly as emerging AI products begin to drive sales, the near-term financial pressures are hard to ignore. The AI industry's margin crisis has far-reaching implications for investors. As AI startups continue to burn capital at unprecedented rates, venture capital firms are becoming more selective about where they place their money. Investors now care as much about margin trajectory as they do about total addressable market (TAM) and growth rates. With valuations of AI companies being compressed due to these margin concerns, founders must increasingly focus on long-term sustainability, cost optimisation, and careful management of their financials. Can AI become profitable? Despite these significant financial challenges, the AI industry’s potential remains undeniable. AI is transforming industries, from healthcare and finance to marketing and entertainment, with the promise of increasing productivity and creating new value. However, for many startups, the road to profitability is still long and uncertain. The question is not whether the AI market will grow but who will be able to survive long enough to benefit from it. For now, the financial pressure on AI startups remains intense, with only the most disciplined and well-managed companies likely to survive the turbulent years ahead.

Even before the funds hit the bank, xAI’s plans to spend over half of the new capital in just the next three months underscore the dire financial realities of the AI industry.

xAI's $1 billion cash burn a month highlights the growing AI startup cash burn crisis

Taiwan has taken its most aggressive step yet in the ongoing tech war between China and the United States.&nbsp;&nbsp;For the first time, the island has added Huawei Technologies and leading Chinese chipmaker SMIC (Semiconductor Manufacturing International Corporation) to its export control list, a move that could reshape cross-strait tech ties and tighten the noose on Beijing’s semiconductor ambitions.&nbsp;The decision bars Taiwanese firms from doing business with the two Chinese giants without a government license. It’s a dramatic shift for a tech powerhouse that, until now, avoided taking sides too visibly.&nbsp;“This marks a substantive move toward strategic technological competition with China,” said Chiang Min-yen, a researcher at Taiwan’s state-backed RIDEET think tank, as quoted by Bloomberg.<h2>Why this matters</h2>Taiwan’s action comes after years of quiet US pressure. Both the Trump and Biden administrations had urged Taipei to enforce stricter export curbs, especially as Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s most advanced chipmaker, remains deeply embedded in global supply chains.&nbsp;According to Bloomberg News, US officials have pushed Taiwan to prevent companies from supplying even trace amounts of American-linked technology to Chinese entities under sanctions.&nbsp;In 2023, TSMC was found to have unknowingly manufactured millions of AI chips for Huawei, routed through a third party later blacklisted by Washington. While TSMC has since cut ties, Taiwan had largely avoided direct blacklisting until now.<h2>Taking a page from Washington</h2>Taiwan’s Ministry of Economic Affairs cited national security concerns for the new blacklisting, echoing similar language used by the US Department of Commerce.&nbsp;“We welcome Taiwan’s move,” said a US congressional panel on China policy, quoted by Reuters. “Partners must act to stop the CCP’s illegal tech transfer network.”&nbsp;Taiwan’s Entity List now includes 601 companies, including dozens tied to China’s military-industrial complex and surveillance tech firms. But Huawei and SMIC are the most prominent by far.&nbsp;“This is not about short-term sales; it’s a long-term alignment,” said a senior trade official in Taipei, speaking anonymously to Bloomberg.<h2>What happens now?</h2>On paper, the blacklist may not immediately block all business. Many Taiwanese companies operate subsidiaries in mainland China, which may technically fall outside the island’s jurisdiction.&nbsp;“The move is symbolic but not disruptive— yet,” said Steven Tseng, chip analyst at Bloomberg Intelligence. “Huawei and SMIC have already localised much of their sourcing.”&nbsp;But it sends a clear political signal. New President Lai Ching-te has pledged to reduce Taiwan’s reliance on the mainland and strengthen ties with democracies like the US and Japan.&nbsp;According to Bloomberg, Lai’s administration is now expected to tighten scrutiny on component sales, construction contracts, and even IP transfers to Chinese tech parks.<h2>Cross-strait tensions on edge</h2>The timing is no coincidence. Beijing has sharply criticised Lai, accusing him of promoting “independence in disguise” and branding his administration a “troublemaker” after he referred to China as a “foreign hostile force”.&nbsp;“Lai will now be able to speed up his agenda-setting against China on several fronts, including defence, trade, and tech,” said Soong Hseik-wen, policy researcher at National Chung Cheng University, speaking to Bloomberg.&nbsp;Taiwan’s investment in China has already plunged from $14.6 billion in 2010 to just $3.6 billion in 2024, according to official statistics. The blacklist may be the next phase of that economic decoupling.<h2>The bigger picture</h2>Taiwan’s move comes as a growing number of US allies, from Japan to the Netherlands, restrict semiconductor exports to China. Yet neither Tokyo nor Seoul has directly blacklisted Huawei or SMIC. That makes Taipei’s decision even more significant.&nbsp;For China, the implications are deep. While Huawei and SMIC have spent years building a domestic supply chain, losing access to Taiwan’s precision tools, silicon wafers, and expertise could further delay their AI and chip ambitions.&nbsp;Taiwan has made its choice. As the global semiconductor war enters a new phase, the island is tightening its grip on critical tech and turning away from decades of cross-Strait economic interdependence.&nbsp;Whether symbolic or strategic, the blacklist sends a message Beijing can’t ignore: Taiwan is not just in front of geopolitics; it’s now in the frontline of the tech war.&nbsp;(With inputs from the agencies) &nbsp;

This marks a significant shift in Taiwan approach, encouraged by US pressure for stricter export controls to protect its advanced semiconductor industry. 

Taiwan has taken its most aggressive step yet in the ongoing tech war between China and the United States. For the first time, the island has added Huawei Technologies and leading Chinese chipmaker SMIC (Semiconductor Manufacturing International Corporation) to its export control list, a move that could reshape cross-strait tech ties and tighten the noose on Beijing’s semiconductor ambitions. The decision bars Taiwanese firms from doing business with the two Chinese giants without a government license. It’s a dramatic shift for a tech powerhouse that, until now, avoided taking sides too visibly. “This marks a substantive move toward strategic technological competition with China,” said Chiang Min-yen, a researcher at Taiwan’s state-backed RIDEET think tank, as quoted by Bloomberg. Why this matters Taiwan’s action comes after years of quiet US pressure. Both the Trump and Biden administrations had urged Taipei to enforce stricter export curbs, especially as Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s most advanced chipmaker, remains deeply embedded in global supply chains. According to Bloomberg News, US officials have pushed Taiwan to prevent companies from supplying even trace amounts of American-linked technology to Chinese entities under sanctions. In 2023, TSMC was found to have unknowingly manufactured millions of AI chips for Huawei, routed through a third party later blacklisted by Washington. While TSMC has since cut ties, Taiwan had largely avoided direct blacklisting until now. Taking a page from Washington Taiwan’s Ministry of Economic Affairs cited national security concerns for the new blacklisting, echoing similar language used by the US Department of Commerce. “We welcome Taiwan’s move,” said a US congressional panel on China policy, quoted by Reuters. “Partners must act to stop the CCP’s illegal tech transfer network.” Taiwan’s Entity List now includes 601 companies, including dozens tied to China’s military-industrial complex and surveillance tech firms. But Huawei and SMIC are the most prominent by far. “This is not about short-term sales; it’s a long-term alignment,” said a senior trade official in Taipei, speaking anonymously to Bloomberg. What happens now? On paper, the blacklist may not immediately block all business. Many Taiwanese companies operate subsidiaries in mainland China, which may technically fall outside the island’s jurisdiction. “The move is symbolic but not disruptive— yet,” said Steven Tseng, chip analyst at Bloomberg Intelligence. “Huawei and SMIC have already localised much of their sourcing.” But it sends a clear political signal. New President Lai Ching-te has pledged to reduce Taiwan’s reliance on the mainland and strengthen ties with democracies like the US and Japan. According to Bloomberg, Lai’s administration is now expected to tighten scrutiny on component sales, construction contracts, and even IP transfers to Chinese tech parks. Cross-strait tensions on edge The timing is no coincidence. Beijing has sharply criticised Lai, accusing him of promoting “independence in disguise” and branding his administration a “troublemaker” after he referred to China as a “foreign hostile force”. “Lai will now be able to speed up his agenda-setting against China on several fronts, including defence, trade, and tech,” said Soong Hseik-wen, policy researcher at National Chung Cheng University, speaking to Bloomberg. Taiwan’s investment in China has already plunged from $14.6 billion in 2010 to just $3.6 billion in 2024, according to official statistics. The blacklist may be the next phase of that economic decoupling. The bigger picture Taiwan’s move comes as a growing number of US allies, from Japan to the Netherlands, restrict semiconductor exports to China. Yet neither Tokyo nor Seoul has directly blacklisted Huawei or SMIC. That makes Taipei’s decision even more significant. For China, the implications are deep. While Huawei and SMIC have spent years building a domestic supply chain, losing access to Taiwan’s precision tools, silicon wafers, and expertise could further delay their AI and chip ambitions. Taiwan has made its choice. As the global semiconductor war enters a new phase, the island is tightening its grip on critical tech and turning away from decades of cross-Strait economic interdependence. Whether symbolic or strategic, the blacklist sends a message Beijing can’t ignore: Taiwan is not just in front of geopolitics; it’s now in the frontline of the tech war. (With inputs from the agencies)

Taiwan has escalated its tech stance against China and the US by blacklisting Huawei Technologies and SMIC, requiring government licenses for Taiwanese firms doing business with them.

US–China chip tensions rise as Taiwan blacklists Huawei: Details here

Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, has escalated its recruitment efforts in a high-stakes attempt to build its own artificial intelligence (AI) empire.&nbsp;According to Sam Altman, CEO of OpenAI, Meta has made offers to some of his best engineers, including signing bonuses of up to $100 million and annual compensation packages worth even more.&nbsp;Despite these lavish incentives, Altman confirmed on a recent episode of the Uncapped podcast that OpenAI’s top talent has remained steadfast and declined to accept Meta's overtures.“Meta started making giant offers to a lot of people on our team,” Altman said. “You know, like $100 million signing bonuses, more than that (in) compensation per year. At least, so far, none of our best people have decided to take them up on that.”The massive offers from Meta come as part of a broader, aggressive strategy to accelerate its AI efforts. Meta, which has struggled to keep pace with competitors like OpenAI, Google, and Amazon in the AI race, has recently doubled down on its commitment to AI by investing billions in both talent and cutting-edge technology.&nbsp;These efforts include the launch of its new “superintelligence” division, aimed at creating AI systems that exceed human cognitive capabilities.Altman’s remarks underscore the growing competition for top-tier AI talent. The pursuit of elite engineers has reached a fever pitch in Silicon Valley, with companies like Meta, OpenAI, and Google making offers that rival those of professional athletes in other industries.&nbsp;Researchers who specialise in AI are now some of the most sought-after individuals in the tech world, with offers running into the tens of millions of dollars.<h2>Meta’s aggressive AI push</h2>Meta’s ambitions in AI have grown bolder in recent months. The company recently announced a monumental $14.3 billion investment in Scale AI, a leader in AI data processing and labelling.&nbsp;The deal gives Meta a 49 per cent stake in Scale AI and brings its CEO, Alexandr Wang, on board to lead Meta's newly formed superintelligence lab.&nbsp;In addition to the investment in Scale, Meta has reportedly offered generous compensation packages to top AI researchers from OpenAI and Google, hoping to assemble a team capable of competing with the industry’s elite.Despite these investments, Meta has faced challenges in its pursuit of AI dominance. The company has delayed the release of its next major AI model due to concerns about its capabilities, with sources claiming that internal struggles over product development and leadership have hindered progress.&nbsp;Moreover, while Meta has released several open-source AI models, including the Llama series, it has faced criticism for allegedly overstating the performance of these models compared to the models developed by competitors like OpenAI’s GPT-4 and Google’s Gemini.One of the most ambitious aspects of Meta's AI strategy is the formation of a “superintelligence” unit, which aims to create an AI system that surpasses human intelligence. This project is being led by Alexandr Wang, who left Scale AI for Meta in a move that highlights the growing value placed on AI expertise.&nbsp;Meta’s superintelligence lab is expected to drive innovations in technologies such as self-driving cars and robotic systems, giving the company a competitive edge in both the AI and hardware sectors.<h2>The AI talent war intensifies</h2>Meta’s high-profile recruitment efforts are part of a broader trend in the tech industry, where AI talent has become the hottest commodity. Since OpenAI’s release of ChatGPT in 2022, the AI arms race has escalated to a level never seen before, with companies vying to secure the brightest minds in machine learning and natural language processing.The importance of individual contributors (ICs) in the AI field cannot be overstated. Researchers with specialised expertise are seen as pivotal to the success of AI models, with the best talent having the potential to make or break the trajectory of a company’s AI ambitions. This has led to a scramble for top engineers, with some researchers receiving offers worth tens of millions of dollars in salary and bonuses.For instance, Google’s DeepMind has reportedly offered AI researchers compensation packages in the ballpark of $20 million per year, along with expedited equity grants.&nbsp;Similarly, OpenAI has been forced to offer significant retention bonuses to prevent its talent from jumping ship. Meta’s lavish recruitment offers are part of this ongoing battle for AI supremacy, with Mark Zuckerberg overseeing efforts to recruit leading researchers from rival companies.This battle for AI talent has also drawn in other major players like Amazon and Microsoft, who are investing billions in AI startups and expanding their own research divisions.&nbsp;Microsoft, for instance, has poured more than $13 billion into OpenAI, while Amazon has invested heavily in the AI startup Anthropic. With the stakes so high, no company in Silicon Valley can afford to be left behind in the race to dominate the AI landscape.<h2>Race to stay competitive</h2>Despite its aggressive hiring tactics and massive investments, Meta’s position in the AI race is still far from secure. The company has been criticised for its perceived slow progress in AI development, especially in comparison to OpenAI and Google.&nbsp;Meta’s efforts to build a competitive AI lab have been hampered by employee churn, internal management struggles, and a series of product releases that have failed to meet expectations.One of the major challenges Meta faces is its reliance on an open-source strategy. While the company has released models like Llama to the public, which has allowed third-party developers to build on top of them, some have criticised Meta for inflating the capabilities of its models to make them appear more competitive with industry leaders.&nbsp;Furthermore, Meta's internal divisions have led to infighting and delays in product development, leaving the company vulnerable to the rapid advancements made by its rivals.The war for AI supremacy is not just about technology; it’s about securing the best minds to create the next generation of intelligent systems. With companies like Meta and OpenAI vying for the brightest engineers, the future of AI will likely be shaped by the talent that is recruited today.&nbsp;As Meta continues its push to assemble a superintelligence team, the question remains: will it be able to close the gap and compete with the likes of OpenAI and Google? Only time will tell.

The massive offers from Meta come as part of a broader, aggressive strategy to accelerate its AI efforts. Meta, which has struggled to keep pace with competitors like OpenAI, Google, and Amazon in the AI race. 

Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, has escalated its recruitment efforts in a high-stakes attempt to build its own artificial intelligence (AI) empire. According to Sam Altman, CEO of OpenAI, Meta has made offers to some of his best engineers, including signing bonuses of up to $100 million and annual compensation packages worth even more. Despite these lavish incentives, Altman confirmed on a recent episode of the Uncapped podcast that OpenAI’s top talent has remained steadfast and declined to accept Meta's overtures. “Meta started making giant offers to a lot of people on our team,” Altman said. “You know, like $100 million signing bonuses, more than that (in) compensation per year. At least, so far, none of our best people have decided to take them up on that.” The massive offers from Meta come as part of a broader, aggressive strategy to accelerate its AI efforts. Meta, which has struggled to keep pace with competitors like OpenAI, Google, and Amazon in the AI race, has recently doubled down on its commitment to AI by investing billions in both talent and cutting-edge technology. These efforts include the launch of its new “superintelligence” division, aimed at creating AI systems that exceed human cognitive capabilities. Altman’s remarks underscore the growing competition for top-tier AI talent. The pursuit of elite engineers has reached a fever pitch in Silicon Valley, with companies like Meta, OpenAI, and Google making offers that rival those of professional athletes in other industries. Researchers who specialise in AI are now some of the most sought-after individuals in the tech world, with offers running into the tens of millions of dollars. Meta’s aggressive AI push Meta’s ambitions in AI have grown bolder in recent months. The company recently announced a monumental $14.3 billion investment in Scale AI, a leader in AI data processing and labelling. The deal gives Meta a 49 per cent stake in Scale AI and brings its CEO, Alexandr Wang, on board to lead Meta's newly formed superintelligence lab. In addition to the investment in Scale, Meta has reportedly offered generous compensation packages to top AI researchers from OpenAI and Google, hoping to assemble a team capable of competing with the industry’s elite. Despite these investments, Meta has faced challenges in its pursuit of AI dominance. The company has delayed the release of its next major AI model due to concerns about its capabilities, with sources claiming that internal struggles over product development and leadership have hindered progress. Moreover, while Meta has released several open-source AI models, including the Llama series, it has faced criticism for allegedly overstating the performance of these models compared to the models developed by competitors like OpenAI’s GPT-4 and Google’s Gemini. One of the most ambitious aspects of Meta's AI strategy is the formation of a “superintelligence” unit, which aims to create an AI system that surpasses human intelligence. This project is being led by Alexandr Wang, who left Scale AI for Meta in a move that highlights the growing value placed on AI expertise. Meta’s superintelligence lab is expected to drive innovations in technologies such as self-driving cars and robotic systems, giving the company a competitive edge in both the AI and hardware sectors. The AI talent war intensifies Meta’s high-profile recruitment efforts are part of a broader trend in the tech industry, where AI talent has become the hottest commodity. Since OpenAI’s release of ChatGPT in 2022, the AI arms race has escalated to a level never seen before, with companies vying to secure the brightest minds in machine learning and natural language processing. The importance of individual contributors (ICs) in the AI field cannot be overstated. Researchers with specialised expertise are seen as pivotal to the success of AI models, with the best talent having the potential to make or break the trajectory of a company’s AI ambitions. This has led to a scramble for top engineers, with some researchers receiving offers worth tens of millions of dollars in salary and bonuses. For instance, Google’s DeepMind has reportedly offered AI researchers compensation packages in the ballpark of $20 million per year, along with expedited equity grants. Similarly, OpenAI has been forced to offer significant retention bonuses to prevent its talent from jumping ship. Meta’s lavish recruitment offers are part of this ongoing battle for AI supremacy, with Mark Zuckerberg overseeing efforts to recruit leading researchers from rival companies. This battle for AI talent has also drawn in other major players like Amazon and Microsoft, who are investing billions in AI startups and expanding their own research divisions. Microsoft, for instance, has poured more than $13 billion into OpenAI, while Amazon has invested heavily in the AI startup Anthropic. With the stakes so high, no company in Silicon Valley can afford to be left behind in the race to dominate the AI landscape. Race to stay competitive Despite its aggressive hiring tactics and massive investments, Meta’s position in the AI race is still far from secure. The company has been criticised for its perceived slow progress in AI development, especially in comparison to OpenAI and Google. Meta’s efforts to build a competitive AI lab have been hampered by employee churn, internal management struggles, and a series of product releases that have failed to meet expectations. One of the major challenges Meta faces is its reliance on an open-source strategy. While the company has released models like Llama to the public, which has allowed third-party developers to build on top of them, some have criticised Meta for inflating the capabilities of its models to make them appear more competitive with industry leaders. Furthermore, Meta's internal divisions have led to infighting and delays in product development, leaving the company vulnerable to the rapid advancements made by its rivals. The war for AI supremacy is not just about technology; it’s about securing the best minds to create the next generation of intelligent systems. With companies like Meta and OpenAI vying for the brightest engineers, the future of AI will likely be shaped by the talent that is recruited today. As Meta continues its push to assemble a superintelligence team, the question remains: will it be able to close the gap and compete with the likes of OpenAI and Google? Only time will tell.

The massive offers from Meta come as part of a broader, aggressive strategy to accelerate its AI efforts. Meta, which has struggled to keep pace with competitors like OpenAI, Google, and Amazon in the AI race.&nbsp;

AI talent poaching intensifies: Meta offers $100 million bonuses to OpenAI employees as it struggles to keep pace in the AI race

A little-known herbal medicine firm is now making big waves on Wall Street. Regencell Bioscience, a Hong Kong-based biotech company, has shocked global markets with a staggering stock surge of over 46,000 per cent this year, despite having no profits, no chief medical officer, and limited commercial operations.&nbsp;As a result, its founder and CEO, Yat-Gai Au, has seen his net worth balloon to over $25 billion, placing him among the world’s 100 richest people, as per Bloomberg.<h2>The meteoric rise of Regencell</h2>Regencell Bioscience was virtually unknown until recently. Traded as a micro-cap on the Nasdaq, the company develops traditional Chinese medicine (TCM) formulas targeting conditions like ADHD and autism spectrum disorder.&nbsp;But the real twist? It has never turned a profit.&nbsp;The company posted a $4.4 million loss in the fiscal year ending June 2024 and currently has no official chief medical officer, as per public filings accessed by Bloomberg.&nbsp;Yet, from being valued at just a few million dollars earlier this year, Regencell’s stock has exploded—boosted further by a 38-for-1 forward stock split in June, a move often used to attract retail investors. At one point, its shares soared more than 24 per cent in a single day, with barely 6 per cent of its stock available for public trading.<h2>Who is Yat-Gai Au?</h2>Yat-Gai Au, the man behind Regencell, owns an 86 per cent stake in the firm, now worth over $25 billion on paper.&nbsp;Born with ADHD and dyslexia, Au studied at UC Berkeley’s Haas School of Business and worked at Deutsche Bank in the 1990s before founding Regencell in 2014. According to the company’s website, he has personally invested more than $9 million into the venture, calling it a “passion project” aimed at helping children with neurodevelopmental disorders.&nbsp;The formulas themselves? They’re based on treatments developed by his father, Sik-Kee Au, an electrical engineer turned alternative healer. However, Sik-Kee was once found guilty of professional misconduct by a Hong Kong board for overprescribing medicine in 2021, as per Bloomberg.&nbsp;Regencell’s rally is raising eyebrows among analysts and regulators. With limited float and no concrete commercial success, many compare the surge to earlier meme stock frenzies like GameStop or AMTD Digital.&nbsp;Even more concerning: the firm has disclosed no major scientific breakthroughs or partnerships to justify such a valuation. It simply caught fire in a volatile trading environment—and with such a tightly controlled shareholding structure, even small trades can push prices higher.&nbsp;As of Monday, another investor—Zoom’s early backer Samuel Chen—held a stake worth over $2.2 billion, according to Bloomberg.<h2>From herbs to high stakes</h2>Regencell’s stock story isn’t just about one billionaire. It reflects a wider trend of speculative bubbles in biotech and TCM startups. In 2021, the company signed a deal to distribute Chinese herbal remedies for COVID-19 across Asia—but little has been heard since.&nbsp;The firm’s Brain Theory products, according to its disclosures, are liquid-based herbal formulations administered twice a day. There’s no mention of FDA approval or clinical trial data in the public domain.Still, the stock keeps&nbsp;soaring.<h2>Is it sustainable?</h2>Experts remain sceptical. Regencell has just a dozen employees. Its business model relies heavily on personal branding, self-funding, and a niche medical market with little regulation.&nbsp;Bloomberg analysts warn that “paper wealth” can evaporate as quickly as it appears. With no profits and no product sales, the company’s valuation could collapse just as dramatically as it rose—particularly if scrutiny increases.&nbsp;But for now, Yat-Gai Au stands alongside the world’s wealthiest, thanks to a TCM company that few outside Hong Kong had heard of until this year.&nbsp;(With inputs from the agencies) &nbsp; &nbsp;

Despite posting a $4.4 million loss and lacking a chief medical officer or significant commercial success, CEO Yat-Gai Au's wealth has surpassed $25 billion, placing him among the world richest.

A little-known herbal medicine firm is now making big waves on Wall Street. Regencell Bioscience, a Hong Kong-based biotech company, has shocked global markets with a staggering stock surge of over 46,000 per cent this year, despite having no profits, no chief medical officer, and limited commercial operations. As a result, its founder and CEO, Yat-Gai Au, has seen his net worth balloon to over $25 billion, placing him among the world’s 100 richest people, as per Bloomberg. The meteoric rise of Regencell Regencell Bioscience was virtually unknown until recently. Traded as a micro-cap on the Nasdaq, the company develops traditional Chinese medicine (TCM) formulas targeting conditions like ADHD and autism spectrum disorder. But the real twist? It has never turned a profit. The company posted a $4.4 million loss in the fiscal year ending June 2024 and currently has no official chief medical officer, as per public filings accessed by Bloomberg. Yet, from being valued at just a few million dollars earlier this year, Regencell’s stock has exploded—boosted further by a 38-for-1 forward stock split in June, a move often used to attract retail investors. At one point, its shares soared more than 24 per cent in a single day, with barely 6 per cent of its stock available for public trading. Who is Yat-Gai Au? Yat-Gai Au, the man behind Regencell, owns an 86 per cent stake in the firm, now worth over $25 billion on paper. Born with ADHD and dyslexia, Au studied at UC Berkeley’s Haas School of Business and worked at Deutsche Bank in the 1990s before founding Regencell in 2014. According to the company’s website, he has personally invested more than $9 million into the venture, calling it a “passion project” aimed at helping children with neurodevelopmental disorders. The formulas themselves? They’re based on treatments developed by his father, Sik-Kee Au, an electrical engineer turned alternative healer. However, Sik-Kee was once found guilty of professional misconduct by a Hong Kong board for overprescribing medicine in 2021, as per Bloomberg. Regencell’s rally is raising eyebrows among analysts and regulators. With limited float and no concrete commercial success, many compare the surge to earlier meme stock frenzies like GameStop or AMTD Digital. Even more concerning: the firm has disclosed no major scientific breakthroughs or partnerships to justify such a valuation. It simply caught fire in a volatile trading environment—and with such a tightly controlled shareholding structure, even small trades can push prices higher. As of Monday, another investor—Zoom’s early backer Samuel Chen—held a stake worth over $2.2 billion, according to Bloomberg. From herbs to high stakes Regencell’s stock story isn’t just about one billionaire. It reflects a wider trend of speculative bubbles in biotech and TCM startups. In 2021, the company signed a deal to distribute Chinese herbal remedies for COVID-19 across Asia—but little has been heard since. The firm’s Brain Theory products, according to its disclosures, are liquid-based herbal formulations administered twice a day. There’s no mention of FDA approval or clinical trial data in the public domain. Still, the stock keeps soaring. Is it sustainable? Experts remain sceptical. Regencell has just a dozen employees. Its business model relies heavily on personal branding, self-funding, and a niche medical market with little regulation. Bloomberg analysts warn that “paper wealth” can evaporate as quickly as it appears. With no profits and no product sales, the company’s valuation could collapse just as dramatically as it rose—particularly if scrutiny increases. But for now, Yat-Gai Au stands alongside the world’s wealthiest, thanks to a TCM company that few outside Hong Kong had heard of until this year. (With inputs from the agencies)

Regencell Bioscience, a Hong Kong-based biotech firm specializing in traditional Chinese medicine (TCM), has experienced a staggering stock surge of over 46,000% this year, raising concerns among analysts and regulators.

Here's how an unprofitable Chinese medicine firm’s stock rally lifts CEO’s wealth to $33 billion

Chile’s central bank has held its key interest rate steady at 5 per cent, maintaining a cautious stance amid rising global instability, especially in the Middle East. But the central bank has also opened the door for future rate cuts, if external risks remain contained, as per Bloomberg.&nbsp;The decision, announced late Tuesday, was in line with market expectations. Sixteen of 21 analysts in a Bloomberg survey forecast the pause, while five expected a 25-basis-point cut. It marked the third straight meeting with rates on hold after aggressive monetary tightening earlier.<h2>Middle East conflict adds new risks</h2>In a statement quoted by Bloomberg, policymakers led by Governor Rosanna Costa said inflationary pressures had receded and price risks had eased. However, the board warned that the Israel–Iran conflict had added a “new source of uncertainty” that could spill over into Chile’s economy, especially through higher energy prices.&nbsp;“The escalation of the military conflict in the Middle East adds further uncertainty to this scenario,” the central bank said. “Its scope, development, and potential impacts on the global and local economies are unknown.”&nbsp;If the bank’s baseline forecast holds, the policy rate “will be approaching its range of neutral values,” estimated between 3.5 and 4.5 per cent, the statement added.<h2>Inflation slows, peso strengthens</h2>Chile’s annual inflation slowed to 4.4 per cent in May, its lowest level since November 2023, easing from highs seen in the aftermath of the pandemic, as reported by Bloomberg. A stronger peso, up more than 5 per cent year-to-date, has helped reduce import-led price pressures—vital for a country that relies heavily on imported fuel.&nbsp;Still, surging oil prices driven by tensions in the Middle East could derail this progress. “We anticipate the easing cycle to resume in July, but swings in the external backdrop could delay cuts until September,” said Andres Perez, Chief Economist for Latin America at Banco Itau, as quoted by Bloomberg.&nbsp;Perez expects the easing cycle to conclude at 4 per cent by early 2026.<h2>Growth recovering, but labour market lags</h2>Chile’s economy expanded 0.6 per cent month-on-month in April, triple the pace forecast by analysts, according to Bloomberg. Growth was driven by mining and services, while inflation cooled. However, job creation remained weak, the central bank noted.&nbsp;“There are factors that point to a greater boost in investment in the near future,” the board said, though the labour market “shows slow job creation.”The Chilean government expects GDP to grow around 2.5 per cent this year. The central bank’s updated economic forecasts are expected in its Quarterly Monetary Policy Report due Wednesday.<h2>What’s next?</h2>The tone of the latest statement suggests more cuts are on the horizon. “The Central Bank of Chile becomes more explicit regarding the future rate path, anticipating cuts in the coming quarters,” said Florencia Ricci, Head of Economy and Markets at Banchile Inversiones, as per Bloomberg.&nbsp;Ricci expects two rate cuts this year, in Q3 and Q4, taking the benchmark to 4.5 per cent by the end of 2025.&nbsp;Despite holding steady for now, Chile’s central bank has signalled its willingness to resume easing but only if the impact of external shocks like the Middle East conflict remains limited. For now, caution reigns as Santiago watches the global stage.&nbsp;(With inputs from the agencies) &nbsp;

While inflation has eased to 4.4% and the peso strengthened, the Israel-Iran conflict poses new economic risks, notably higher energy prices. Growth showed signs of recovery, but job creation remains weak. 

Chile’s central bank has held its key interest rate steady at 5 per cent, maintaining a cautious stance amid rising global instability, especially in the Middle East. But the central bank has also opened the door for future rate cuts, if external risks remain contained, as per Bloomberg. The decision, announced late Tuesday, was in line with market expectations. Sixteen of 21 analysts in a Bloomberg survey forecast the pause, while five expected a 25-basis-point cut. It marked the third straight meeting with rates on hold after aggressive monetary tightening earlier. Middle East conflict adds new risks In a statement quoted by Bloomberg, policymakers led by Governor Rosanna Costa said inflationary pressures had receded and price risks had eased. However, the board warned that the Israel–Iran conflict had added a “new source of uncertainty” that could spill over into Chile’s economy, especially through higher energy prices. “The escalation of the military conflict in the Middle East adds further uncertainty to this scenario,” the central bank said. “Its scope, development, and potential impacts on the global and local economies are unknown.” If the bank’s baseline forecast holds, the policy rate “will be approaching its range of neutral values,” estimated between 3.5 and 4.5 per cent, the statement added. Inflation slows, peso strengthens Chile’s annual inflation slowed to 4.4 per cent in May, its lowest level since November 2023, easing from highs seen in the aftermath of the pandemic, as reported by Bloomberg. A stronger peso, up more than 5 per cent year-to-date, has helped reduce import-led price pressures—vital for a country that relies heavily on imported fuel. Still, surging oil prices driven by tensions in the Middle East could derail this progress. “We anticipate the easing cycle to resume in July, but swings in the external backdrop could delay cuts until September,” said Andres Perez, Chief Economist for Latin America at Banco Itau, as quoted by Bloomberg. Perez expects the easing cycle to conclude at 4 per cent by early 2026. Growth recovering, but labour market lags Chile’s economy expanded 0.6 per cent month-on-month in April, triple the pace forecast by analysts, according to Bloomberg. Growth was driven by mining and services, while inflation cooled. However, job creation remained weak, the central bank noted. “There are factors that point to a greater boost in investment in the near future,” the board said, though the labour market “shows slow job creation.” The Chilean government expects GDP to grow around 2.5 per cent this year. The central bank’s updated economic forecasts are expected in its Quarterly Monetary Policy Report due Wednesday. What’s next? The tone of the latest statement suggests more cuts are on the horizon. “The Central Bank of Chile becomes more explicit regarding the future rate path, anticipating cuts in the coming quarters,” said Florencia Ricci, Head of Economy and Markets at Banchile Inversiones, as per Bloomberg. Ricci expects two rate cuts this year, in Q3 and Q4, taking the benchmark to 4.5 per cent by the end of 2025. Despite holding steady for now, Chile’s central bank has signalled its willingness to resume easing but only if the impact of external shocks like the Middle East conflict remains limited. For now, caution reigns as Santiago watches the global stage. (With inputs from the agencies)

Chile's central bank maintained its key interest rate at 5% due to rising global instability, particularly from the Middle East.&nbsp;

Chile holds rates at 5% amid Middle East conflict, hints at cuts ahead

Antimony, a critical mineral used in a wide range of industries from energy storage to defence, is facing a severe global supply shortage that is driving prices to unprecedented levels.&nbsp;The situation, exacerbated by geopolitical tensions and environmental regulations, is starting to affect industries across the globe, from manufacturers of lead-acid batteries to military equipment producers. As the supply of this vital mineral tightens, companies are scrambling to secure a reliable source, while consumers face higher costs.<h2>China’s dominance and export restrictions</h2>China has long been the world’s largest producer of antimony, accounting for approximately 60 per cent of global output in 2024. However, the country’s output has been decreasing due to a combination of mine closures, stricter environmental regulations, and a political decision to restrict exports.&nbsp;In late 2023, China added antimony to its list of controlled minerals, requiring exporters to obtain licences for overseas shipments. Later, by December, the country imposed an outright ban on shipments of antimony to the United States, a retaliatory move following US restrictions on advanced semiconductor exports to China.These export controls have caused a dramatic reduction in China’s global antimony supply, which is now just one-third of what it was in 2022. With China tightening its grip on the mineral and production disruptions in other key regions, global shortages have deepened, driving up prices sharply.<h2>Price surge and economic impact</h2>The price of antimony has skyrocketed over the past year, more than quadrupling from $15,000 per tonne to over $60,000 by mid-2024. In some markets, prices have reached a record high of $51,500 per tonne in 2025, according to sources like Military Metals Corp.&nbsp;The surge represents the fastest price rise in over 40 years, with European prices jumping by 75 per cent in just a year. Experts predict that if the supply shortage persists, antimony prices could climb to as much as $100,000 per tonne.This surge has had immediate consequences for industries that rely on antimony, particularly battery manufacturers, electronics producers, and defence contractors. US-based companies, such as Clarios and Honda, which use antimony in their lead-acid batteries, are feeling the strain as procurement costs skyrocket.&nbsp;The Responsible Battery Coalition, which represents major battery manufacturers, has called the situation a “national emergency”, urging policymakers to treat the shortage as a national security concern.<h2>The ripple effect across sectors</h2>While the lead-acid battery market remains the largest consumer of antimony, its applications extend across many industries. The flame-retardant properties of antimony make it indispensable in products like fire-resistant clothing, construction materials, and electronics.&nbsp;The surge in demand for antimony as an essential element in energy storage solutions, including liquid-metal batteries and emerging sodium-ion technologies, is further contributing to the crisis.The defence sector also faces an urgent need for antimony, as it is used in more than 200 types of ammunition, including in military vehicles and infrared sensors. As the US Department of Defense intensifies its focus on securing critical materials, the shortage of antimony has taken on even greater significance.Despite the pressing demand, US manufacturers are finding it difficult to secure a stable supply. Nils Backeberg, director of consultancy Project Blue, told&nbsp;Reuters&nbsp;that companies in the West are increasingly turning to a “grey market”, where stockpiled materials are being sold at inflated prices. As a result, many manufacturers are passing on the higher procurement costs to their customers, causing an increase in product prices.<h2>A global supply chain crisis</h2>While antimony is still being mined in other countries, including Russia, Myanmar, and Tajikistan, political instability and environmental challenges are hindering production in these regions.&nbsp;Russia, which holds a significant share of the world’s antimony reserves, has seen its output drop due to Western sanctions and the economic fallout from the Ukraine war. Meanwhile, Myanmar’s political unrest has led to production disruptions that further complicated supply chains.The United States, which has historically relied on imported antimony from China, is taking steps to reduce its dependence on international sources. Efforts are underway to revive domestic production, but challenges persist.&nbsp;The Stibnite Gold Mine in Idaho, once the largest US producer of antimony, has remained closed since the 1990s, and reopening it would require overcoming significant environmental hurdles, including concerns about river pollution.<h2>The race for alternatives</h2>As the antimony crisis deepens, countries outside China are beginning to explore alternative sources. Australia, which has substantial antimony reserves, is emerging as a key player in the global market. The Hillgrove Gold-Antimony Project in Australia has seen a rise in investment, and US companies are seeking partnerships to tap into this resource.&nbsp;Tajikistan, a relatively small producer of antimony, is also positioning itself as a crucial supplier. The country’s Talco Gold mine, a joint venture with China’s Tibet Huayu Mining, has ramped up production to become Europe’s largest supplier of antimony metal. This shift highlights the growing importance of alternative sources in addressing the global supply shortfall.Experts agree that a long-term solution to the antimony shortage will require more than just short-term fixes. Some suggest that increased investment in recycling and material recovery could provide some stability to the market. Additionally, efforts to diversify supply sources outside China, particularly in Australia, could help mitigate future risks.For now, however, the antimony shortage is a stark reminder of the vulnerabilities inherent in the global supply chain for critical minerals. With industries from defence to renewable energy relying on antimony, securing a steady and sustainable supply will be crucial in the years to come.&nbsp;(With inputs from agencies)

China’s antimony output has been decreasing due to a combination of mine closures, stricter environmental regulations, and a political decision to restrict exports. 

Antimony, a critical mineral used in a wide range of industries from energy storage to defence, is facing a severe global supply shortage that is driving prices to unprecedented levels. The situation, exacerbated by geopolitical tensions and environmental regulations, is starting to affect industries across the globe, from manufacturers of lead-acid batteries to military equipment producers. As the supply of this vital mineral tightens, companies are scrambling to secure a reliable source, while consumers face higher costs. China’s dominance and export restrictions China has long been the world’s largest producer of antimony, accounting for approximately 60 per cent of global output in 2024. However, the country’s output has been decreasing due to a combination of mine closures, stricter environmental regulations, and a political decision to restrict exports. In late 2023, China added antimony to its list of controlled minerals, requiring exporters to obtain licences for overseas shipments. Later, by December, the country imposed an outright ban on shipments of antimony to the United States, a retaliatory move following US restrictions on advanced semiconductor exports to China. These export controls have caused a dramatic reduction in China’s global antimony supply, which is now just one-third of what it was in 2022. With China tightening its grip on the mineral and production disruptions in other key regions, global shortages have deepened, driving up prices sharply. Price surge and economic impact The price of antimony has skyrocketed over the past year, more than quadrupling from $15,000 per tonne to over $60,000 by mid-2024. In some markets, prices have reached a record high of $51,500 per tonne in 2025, according to sources like Military Metals Corp. The surge represents the fastest price rise in over 40 years, with European prices jumping by 75 per cent in just a year. Experts predict that if the supply shortage persists, antimony prices could climb to as much as $100,000 per tonne. This surge has had immediate consequences for industries that rely on antimony, particularly battery manufacturers, electronics producers, and defence contractors. US-based companies, such as Clarios and Honda, which use antimony in their lead-acid batteries, are feeling the strain as procurement costs skyrocket. The Responsible Battery Coalition, which represents major battery manufacturers, has called the situation a “national emergency”, urging policymakers to treat the shortage as a national security concern. The ripple effect across sectors While the lead-acid battery market remains the largest consumer of antimony, its applications extend across many industries. The flame-retardant properties of antimony make it indispensable in products like fire-resistant clothing, construction materials, and electronics. The surge in demand for antimony as an essential element in energy storage solutions, including liquid-metal batteries and emerging sodium-ion technologies, is further contributing to the crisis. The defence sector also faces an urgent need for antimony, as it is used in more than 200 types of ammunition, including in military vehicles and infrared sensors. As the US Department of Defense intensifies its focus on securing critical materials, the shortage of antimony has taken on even greater significance. Despite the pressing demand, US manufacturers are finding it difficult to secure a stable supply. Nils Backeberg, director of consultancy Project Blue, told Reuters that companies in the West are increasingly turning to a “grey market”, where stockpiled materials are being sold at inflated prices. As a result, many manufacturers are passing on the higher procurement costs to their customers, causing an increase in product prices. A global supply chain crisis While antimony is still being mined in other countries, including Russia, Myanmar, and Tajikistan, political instability and environmental challenges are hindering production in these regions. Russia, which holds a significant share of the world’s antimony reserves, has seen its output drop due to Western sanctions and the economic fallout from the Ukraine war. Meanwhile, Myanmar’s political unrest has led to production disruptions that further complicated supply chains. The United States, which has historically relied on imported antimony from China, is taking steps to reduce its dependence on international sources. Efforts are underway to revive domestic production, but challenges persist. The Stibnite Gold Mine in Idaho, once the largest US producer of antimony, has remained closed since the 1990s, and reopening it would require overcoming significant environmental hurdles, including concerns about river pollution. The race for alternatives As the antimony crisis deepens, countries outside China are beginning to explore alternative sources. Australia, which has substantial antimony reserves, is emerging as a key player in the global market. The Hillgrove Gold-Antimony Project in Australia has seen a rise in investment, and US companies are seeking partnerships to tap into this resource. Tajikistan, a relatively small producer of antimony, is also positioning itself as a crucial supplier. The country’s Talco Gold mine, a joint venture with China’s Tibet Huayu Mining, has ramped up production to become Europe’s largest supplier of antimony metal. This shift highlights the growing importance of alternative sources in addressing the global supply shortfall. Experts agree that a long-term solution to the antimony shortage will require more than just short-term fixes. Some suggest that increased investment in recycling and material recovery could provide some stability to the market. Additionally, efforts to diversify supply sources outside China, particularly in Australia, could help mitigate future risks. For now, however, the antimony shortage is a stark reminder of the vulnerabilities inherent in the global supply chain for critical minerals. With industries from defence to renewable energy relying on antimony, securing a steady and sustainable supply will be crucial in the years to come. (With inputs from agencies)

China’s antimony output has been decreasing due to a combination of mine closures, stricter environmental regulations, and a political decision to restrict exports.&nbsp;

Antimony crisis: Rising demand and political tensions push prices higher

Japan’s fragile recovery has hit another roadblock. The country’s exports fell for the first time in eight months in May 2025, raising fears of a technical recession amid a widening trade deficit, falling auto shipments, and escalating US tariff pressure.&nbsp;Official data from Japan’s Ministry of Finance, as reported by Reuters, shows that merchandise exports shrank 1.7 per cent year-on-year in May, missing market expectations of a steeper 3.7 per cent decline. The contraction was led by a slump in car, steel, and mineral fuel shipments.&nbsp;At the same time, imports dropped 7.7 per cent, primarily due to lower crude oil and coal purchases, resulting in a trade deficit of ¥637.6 billion ($4.4 billion), the second consecutive monthly shortfall.<h2>US tariffs rattle Japan’s top export sectors</h2>The latest export slowdown comes just weeks after US President Donald Trump doubled down on a protectionist trade agenda, imposing a 25 per cent tariff on Japanese car and auto part imports and raising the levy on steel and aluminium to 50 per cent.&nbsp;The Trump administration also announced a baseline 10 per cent tariff on all Japanese goods, which is set to rise to 24 per cent on July 9 unless a deal is reached. Negotiations between Trump and Japanese Prime Minister Shigeru Ishiba during the G7 summit failed to produce a breakthrough.&nbsp;As a result, exports to the United States plunged 11.1 per cent in May, with car shipments alone falling 24.7 per cent year-on-year. Japan’s trade surplus with the US narrowed to ¥451.7 billion, making it a likely target in Trump’s “reciprocal trade” policy push.&nbsp;“The tariff hit could shave nearly 1 percentage point off Japan’s GDP if all proposed duties take effect,” warned the Japan Research Institute, as quoted by Reuters.<h2>Trade data at a glance</h2>Below is a monthly breakdown of Japan’s year-on-year export growth from January 2023 to May 2025, based on Ministry of Finance data visualised by Bloomberg.&nbsp;&nbsp;The chart illustrates a clear trajectory in Japan’s export performance over the past two years. From late 2023 to mid-2024, exports showed strong year-on-year growth, peaking notably in November–December 2023 and again in May 2024.&nbsp;&nbsp;Economists suggest this surge was likely driven by Japanese firms front-loading shipments in anticipation of looming US tariffs. However, the momentum began to fade in the second half of 2024, with exports slipping into negative territory in September 2024.&nbsp;&nbsp;Although there was a brief recovery in the months that followed, the trend reversed once again by May 2025. That month marked a 1.7 per cent decline in exports, ending an eight-month stretch of expansion and confirming that the impact of US tariffs—previously obscured by early stockpiling—has started to bite into Japan’s trade flows. &nbsp;

Japan Export - Data compiled from Bloomberg chart sourced via Japan Ministry of Finance

<h2>China, Europe, and global trade shifts</h2>Japan’s export troubles aren’t confined to the US. Shipments to China, the country’s largest trading partner, fell 8.8 per cent in May, as demand for industrial goods and electronic components weakened. Exports to Europe, however, rose 4.9 per cent.&nbsp;According to Reuters, the earlier spike in US-bound shipments this year was partly driven by firms rushing to beat Trump’s tariff deadlines. But with that buffer now fading, Japan’s trade numbers are showing the full impact of US duties.<h2>Recession fears return</h2>With exports falling, a wide trade deficit, and consumption still weak, Japan risks slipping into a technical recession defined as two straight quarters of negative growth. The economy had already contracted in Q1 2025 due to sluggish domestic demand.&nbsp;The outlook complicates the Bank of Japan’s cautious policy pivot. On Tuesday, the BoJ held interest rates steady at 0.5 per cent, its highest level since 2007, but slowed its pace of bond tapering, citing global risks including Middle East conflict and trade uncertainty.&nbsp;Economists say rising tariffs and falling exports could force policymakers to delay further tightening, with the BoJ’s ultra-loose decade-long policy still casting a long shadow.<h2>What’s at stake</h2>Japan exported ¥21 trillion worth of goods to the United States in 2024, with automobiles accounting for 28 per cent of that total.&nbsp;&nbsp;With Trump’s reciprocal tariff deadline looming, Tokyo faces mounting pressure to protect its flagship industries—or risk deeper economic fallout in the second half of 2025.&nbsp;(With inputs from the agencies) &nbsp;

Japan imports decreased by 7.7%, leading to a trade deficit of ¥637.6 billion. US tariffs, recently intensified by President Trump, caused exports to the US to fall 11.1%, suggesting potential GDP impacts from proposed duties, as negotiations yielded no resolutions.

Japan’s fragile recovery has hit another roadblock. The country’s exports fell for the first time in eight months in May 2025, raising fears of a technical recession amid a widening trade deficit, falling auto shipments, and escalating US tariff pressure. Official data from Japan’s Ministry of Finance, as reported by Reuters, shows that merchandise exports shrank 1.7 per cent year-on-year in May, missing market expectations of a steeper 3.7 per cent decline. The contraction was led by a slump in car, steel, and mineral fuel shipments. At the same time, imports dropped 7.7 per cent, primarily due to lower crude oil and coal purchases, resulting in a trade deficit of ¥637.6 billion ($4.4 billion), the second consecutive monthly shortfall. US tariffs rattle Japan’s top export sectors The latest export slowdown comes just weeks after US President Donald Trump doubled down on a protectionist trade agenda, imposing a 25 per cent tariff on Japanese car and auto part imports and raising the levy on steel and aluminium to 50 per cent. The Trump administration also announced a baseline 10 per cent tariff on all Japanese goods, which is set to rise to 24 per cent on July 9 unless a deal is reached. Negotiations between Trump and Japanese Prime Minister Shigeru Ishiba during the G7 summit failed to produce a breakthrough. As a result, exports to the United States plunged 11.1 per cent in May, with car shipments alone falling 24.7 per cent year-on-year. Japan’s trade surplus with the US narrowed to ¥451.7 billion, making it a likely target in Trump’s “reciprocal trade” policy push. “The tariff hit could shave nearly 1 percentage point off Japan’s GDP if all proposed duties take effect,” warned the Japan Research Institute, as quoted by Reuters. Trade data at a glance Below is a monthly breakdown of Japan’s year-on-year export growth from January 2023 to May 2025, based on Ministry of Finance data visualised by Bloomberg. The chart illustrates a clear trajectory in Japan’s export performance over the past two years. From late 2023 to mid-2024, exports showed strong year-on-year growth, peaking notably in November–December 2023 and again in May 2024. Economists suggest this surge was likely driven by Japanese firms front-loading shipments in anticipation of looming US tariffs. However, the momentum began to fade in the second half of 2024, with exports slipping into negative territory in September 2024. Although there was a brief recovery in the months that followed, the trend reversed once again by May 2025. That month marked a 1.7 per cent decline in exports, ending an eight-month stretch of expansion and confirming that the impact of US tariffs—previously obscured by early stockpiling—has started to bite into Japan’s trade flows.

Japan's recovery faces setbacks as exports declined 1.7% year-on-year in May 2025, the first drop in eight months, spurred by falling shipments of cars, steel, and fuels.

Japan’s exports fall for first time in 8 months as US tariffs bite into recovery

US retail sales fell more than expected in May, signalling potential cracks in consumer spending as Americans pull back on big-ticket items. The Commerce Department reported a 0.9 per cent decline in retail sales, following a downwardly revised 0.1 per cent drop in April.&nbsp;Economists had forecast a smaller 0.7 per cent decrease, with estimates ranging from a 1.7 per cent drop to a modest increase.The drop was primarily driven by a slowdown in vehicle purchases, as the rush to buy cars and trucks ahead of anticipated tariff-induced price hikes faded.&nbsp;The effects of President Donald Trump’s trade policies, including a 25 per cent duty on imported vehicles that took effect in April, are continuing to weigh on consumer decisions.<h2>Impact of tariffs and cooling consumer demand</h2>The sluggish retail performance in May reflects broader concerns surrounding tariffs and the economic uncertainty they bring. US consumers had frontloaded big-ticket purchases earlier in the year as they anticipated rising prices due to tariffs. However, as the urgency around these price hikes diminished, consumer spending began to cool.“Tariff announcements have had a clear impact on the timing of large-ticket purchases, notably autos, but there are few signs yet that tariffs are leading to a general pullback in consumer spending,” Michael Pearce, deputy chief economist at Oxford Economics told&nbsp;Reuters. Despite the decline, Pearce and other economists expect a more marked slowdown later in the year as tariffs begin to erode disposable income.In a separate report, industrial production in the US fell by 0.2 per cent in May, missing expectations for a slight increase. This marks the second consecutive month of disappointing industrial performance, following a 0.1 per cent increase in April.&nbsp;Manufacturing output rose by just 0.1 per cent, undershooting forecasts and pointing to continued sluggishness in factory activity. Capacity utilisation, a gauge of how fully firms are using their resources, also fell to 77.4 per cent in May, signalling lower-than-expected demand for industrial goods.The retail and industrial data suggest that US economic momentum may be slowing. Economists are closely watching the second quarter, with the Atlanta Fed forecasting a 3.8 per cent annualised GDP growth rate, largely due to a reversal in imports. However, the labour market is showing signs of deceleration, and concerns about rising costs due to tariffs are expected to weigh on household spending.<h2>Mixed picture in categories</h2>While overall retail sales faltered, there were some pockets of strength. Online retail sales rose by 0.9 per cent, and clothing retailers saw a 0.8 per cent increase in sales.&nbsp;Furniture sales soared 1.2 per cent, while sales in sporting goods and hobby stores rose 1.3 per cent. These gains in non-essential goods suggest that while some consumers are pulling back on discretionary spending, others remain willing to spend on select items.However, categories like automotive sales and services, including dining out, experienced noticeable declines. Auto sales fell 3.5 per cent, marking a significant drop after a surge earlier in the year. Spending at service stations also fell by 2.0 per cent due to a drop in gasoline prices, while receipts at food services and drinking places fell 0.9 per cent, a key indicator of household spending habits.<h2>Core retail sales show modest improvement</h2>Core retail sales, which exclude automobiles, gasoline, building materials, and food services, showed modest growth of 0.4 per cent in May, following a revised 0.1 per cent decline in April.&nbsp;This figure is closely tied to consumer spending, which accounts for more than two-thirds of the US economy. Although this uptick suggests a slight improvement, economists are cautious about future growth, given the broader slowdown in the labour market and the resumption of student loan payments for millions of Americans.The Federal Reserve is also closely monitoring these developments. Fed officials are expected to keep interest rates unchanged in their upcoming meeting, with policymakers focusing on the impact of tariffs and geopolitical tensions in West Asia on economic growth.

The sluggish retail performance in May reflects broader concerns surrounding tariffs and the economic uncertainty they bring.

US retail sales fell more than expected in May, signalling potential cracks in consumer spending as Americans pull back on big-ticket items. The Commerce Department reported a 0.9 per cent decline in retail sales, following a downwardly revised 0.1 per cent drop in April. Economists had forecast a smaller 0.7 per cent decrease, with estimates ranging from a 1.7 per cent drop to a modest increase. The drop was primarily driven by a slowdown in vehicle purchases, as the rush to buy cars and trucks ahead of anticipated tariff-induced price hikes faded. The effects of President Donald Trump’s trade policies, including a 25 per cent duty on imported vehicles that took effect in April, are continuing to weigh on consumer decisions. Impact of tariffs and cooling consumer demand The sluggish retail performance in May reflects broader concerns surrounding tariffs and the economic uncertainty they bring. US consumers had frontloaded big-ticket purchases earlier in the year as they anticipated rising prices due to tariffs. However, as the urgency around these price hikes diminished, consumer spending began to cool. “Tariff announcements have had a clear impact on the timing of large-ticket purchases, notably autos, but there are few signs yet that tariffs are leading to a general pullback in consumer spending,” Michael Pearce, deputy chief economist at Oxford Economics told Reuters. Despite the decline, Pearce and other economists expect a more marked slowdown later in the year as tariffs begin to erode disposable income. In a separate report, industrial production in the US fell by 0.2 per cent in May, missing expectations for a slight increase. This marks the second consecutive month of disappointing industrial performance, following a 0.1 per cent increase in April. Manufacturing output rose by just 0.1 per cent, undershooting forecasts and pointing to continued sluggishness in factory activity. Capacity utilisation, a gauge of how fully firms are using their resources, also fell to 77.4 per cent in May, signalling lower-than-expected demand for industrial goods. The retail and industrial data suggest that US economic momentum may be slowing. Economists are closely watching the second quarter, with the Atlanta Fed forecasting a 3.8 per cent annualised GDP growth rate, largely due to a reversal in imports. However, the labour market is showing signs of deceleration, and concerns about rising costs due to tariffs are expected to weigh on household spending. Mixed picture in categories While overall retail sales faltered, there were some pockets of strength. Online retail sales rose by 0.9 per cent, and clothing retailers saw a 0.8 per cent increase in sales. Furniture sales soared 1.2 per cent, while sales in sporting goods and hobby stores rose 1.3 per cent. These gains in non-essential goods suggest that while some consumers are pulling back on discretionary spending, others remain willing to spend on select items. However, categories like automotive sales and services, including dining out, experienced noticeable declines. Auto sales fell 3.5 per cent, marking a significant drop after a surge earlier in the year. Spending at service stations also fell by 2.0 per cent due to a drop in gasoline prices, while receipts at food services and drinking places fell 0.9 per cent, a key indicator of household spending habits. Core retail sales show modest improvement Core retail sales, which exclude automobiles, gasoline, building materials, and food services, showed modest growth of 0.4 per cent in May, following a revised 0.1 per cent decline in April. This figure is closely tied to consumer spending, which accounts for more than two-thirds of the US economy. Although this uptick suggests a slight improvement, economists are cautious about future growth, given the broader slowdown in the labour market and the resumption of student loan payments for millions of Americans. The Federal Reserve is also closely monitoring these developments. Fed officials are expected to keep interest rates unchanged in their upcoming meeting, with policymakers focusing on the impact of tariffs and geopolitical tensions in West Asia on economic growth.

The sluggish retail performance in May reflects broader concerns surrounding tariffs and the economic uncertainty they bring.

US retail sales decline in May; is an economic slowdown in sight?

Oil prices are rising sharply, and global markets are edging into risk-off mode as the Iran–Israel conflict shows no signs of slowing, entering its sixth day on Wednesday.&nbsp;&nbsp;The geopolitical crisis, centred near the Strait of Hormuz, is reviving fears of a global energy shock, even as central banks weigh the fallout on inflation and growth.&nbsp;Brent crude futures rose 19 cents to $76.64 a barrel in early trading, while US West Texas Intermediate climbed 23 cents to $75.07. That followed a 4 per cent spike in prices on Tuesday amid mounting concerns that the Middle East conflict could disrupt oil supplies.<h2>Strait of Hormuz back in focus</h2>Much of the market anxiety revolves around the Strait of Hormuz, the narrow chokepoint through which nearly 20 per cent of the world’s seaborne oil passes. According to Reuters, two tankers collided and caught fire near the strait on Tuesday, raising red flags about safety in the region.&nbsp;The United Kingdom Maritime Trade Operations also warned of “electronic interference” affecting ship navigation systems in the area, a possible sign of growing cyber-warfare threats tied to the conflict.&nbsp;Iran, the third-largest producer in OPEC, pumps around 3.3 million barrels per day. Should the fighting escalate, or sanctions intensify, traders expect disruptions to Iranian output though other OPEC members may struggle to compensate using spare capacity.<h2>Trump ups the ante</h2>On Tuesday, US President Donald Trump called for Iran’s “unconditional surrender” and sent additional fighter jets to the region, according to US officials quoted by Reuters. The US military buildup comes as part of an effort to deter further escalation, though markets fear it may have the opposite effect.&nbsp;Trump’s early departure from the Group of Seven summit in Canada only deepened investor unease. While there were hopes of progress on global trade talks, those evaporated as Trump returned to Washington citing Iran’s provocations.&nbsp;“The market was anxious to hopefully hear updates on trade agreements out of the G7 and the news of Trump leaving early was disappointing,” Eric Sterner of Apollon Wealth Management told Reuters.<h2>Wall Street wobbles</h2>The risk-off sentiment dragged down US stocks on Tuesday. The Dow Jones Industrial Average dropped 0.70 per cent, the S&amp;P 500 slipped 0.84 per cent, and the tech-heavy Nasdaq fell 0.91 per cent.&nbsp;Meanwhile, oil continued its upward climb, with Brent settling 4.52 per cent higher at $76.54 per barrel and US crude jumping 4.46 per cent to close at $74.97.&nbsp;The conflict is also fuelling demand for safe-haven assets. Yields on 10-year US Treasuries fell to 4.389 per cent, down 6.5 basis points from Monday, a sign of growing investor caution.&nbsp;The VIX volatility index, often called Wall Street’s “fear gauge,” rose to a four-week high of 21.6, though still far below pandemic or financial crisis peaks. Analysts said the current spike reflects concern but not full-scale panic yet.&nbsp;“This is like Stage 1 of moving towards a little bit of volatility,” said Matt Thompson of Little Harbor Advisors. “The VIX marketplace thinks the conflict is going to be contained.”<h2>Will the Fed change course?</h2>All eyes now turn to the US Federal Reserve, which is expected to keep its benchmark rate steady at 4.25–4.50 per cent when it concludes its policy meeting on Wednesday.&nbsp;However, market analysts including IG’s Tony Sycamore suggest the Iran–Israel war could prompt the Fed to consider an earlier-than-expected rate cut. “The situation in the Middle East could become a catalyst for the Fed to sound more dovish, as it did follow the October 7, 2023, Hamas attack,” Sycamore told Reuters.&nbsp;Lower rates generally boost oil demand by stimulating growth. But higher energy costs can also stoke inflation, complicating the Fed’s policy response.&nbsp;“Jerome Powell is going to continue to express that they are focused on data at this point,” said Matt Rubin of Cary Street Partners. “And that data does not warrant a cut.”<h2>Broader global impact</h2>The ripple effect is being felt across Europe too, where the STOXX 600 index closed at a three-week low on Tuesday. Investors are also bracing for interest rate decisions from the Bank of England and the Swiss National Bank later this week.&nbsp;In Asia, the Bank of Japan held rates steady at 0.5 per cent, its highest level since 2007, reflecting the growing uncertainty amid global inflation risks and weak domestic demand.&nbsp;Despite the conflict, Qatar said operations at the world’s largest gas field remain unaffected, even as Iran suspended some output after Israeli air strikes.&nbsp;The Iran–Israel war is redrawing the global economic map, with oil markets, central banks, and investors caught in its crosshairs.&nbsp;The longer it lasts, the deeper its impact on inflation, policy, and global growth.&nbsp;(With inputs from the agencies)

Amid rising tensions in the Middle East, oil spikes and Wall Street stumbles as investors brace for inflation risks, Fed moves, and global economic fallout.

Oil prices are rising sharply, and global markets are edging into risk-off mode as the Iran–Israel conflict shows no signs of slowing, entering its sixth day on Wednesday. The geopolitical crisis, centred near the Strait of Hormuz, is reviving fears of a global energy shock, even as central banks weigh the fallout on inflation and growth. Brent crude futures rose 19 cents to $76.64 a barrel in early trading, while US West Texas Intermediate climbed 23 cents to $75.07. That followed a 4 per cent spike in prices on Tuesday amid mounting concerns that the Middle East conflict could disrupt oil supplies. Strait of Hormuz back in focus Much of the market anxiety revolves around the Strait of Hormuz, the narrow chokepoint through which nearly 20 per cent of the world’s seaborne oil passes. According to Reuters, two tankers collided and caught fire near the strait on Tuesday, raising red flags about safety in the region. The United Kingdom Maritime Trade Operations also warned of “electronic interference” affecting ship navigation systems in the area, a possible sign of growing cyber-warfare threats tied to the conflict. Iran, the third-largest producer in OPEC, pumps around 3.3 million barrels per day. Should the fighting escalate, or sanctions intensify, traders expect disruptions to Iranian output though other OPEC members may struggle to compensate using spare capacity. Trump ups the ante On Tuesday, US President Donald Trump called for Iran’s “unconditional surrender” and sent additional fighter jets to the region, according to US officials quoted by Reuters. The US military buildup comes as part of an effort to deter further escalation, though markets fear it may have the opposite effect. Trump’s early departure from the Group of Seven summit in Canada only deepened investor unease. While there were hopes of progress on global trade talks, those evaporated as Trump returned to Washington citing Iran’s provocations. “The market was anxious to hopefully hear updates on trade agreements out of the G7 and the news of Trump leaving early was disappointing,” Eric Sterner of Apollon Wealth Management told Reuters. Wall Street wobbles The risk-off sentiment dragged down US stocks on Tuesday. The Dow Jones Industrial Average dropped 0.70 per cent, the S&P 500 slipped 0.84 per cent, and the tech-heavy Nasdaq fell 0.91 per cent. Meanwhile, oil continued its upward climb, with Brent settling 4.52 per cent higher at $76.54 per barrel and US crude jumping 4.46 per cent to close at $74.97. The conflict is also fuelling demand for safe-haven assets. Yields on 10-year US Treasuries fell to 4.389 per cent, down 6.5 basis points from Monday, a sign of growing investor caution. The VIX volatility index, often called Wall Street’s “fear gauge,” rose to a four-week high of 21.6, though still far below pandemic or financial crisis peaks. Analysts said the current spike reflects concern but not full-scale panic yet. “This is like Stage 1 of moving towards a little bit of volatility,” said Matt Thompson of Little Harbor Advisors. “The VIX marketplace thinks the conflict is going to be contained.” Will the Fed change course? All eyes now turn to the US Federal Reserve, which is expected to keep its benchmark rate steady at 4.25–4.50 per cent when it concludes its policy meeting on Wednesday. However, market analysts including IG’s Tony Sycamore suggest the Iran–Israel war could prompt the Fed to consider an earlier-than-expected rate cut. “The situation in the Middle East could become a catalyst for the Fed to sound more dovish, as it did follow the October 7, 2023, Hamas attack,” Sycamore told Reuters. Lower rates generally boost oil demand by stimulating growth. But higher energy costs can also stoke inflation, complicating the Fed’s policy response. “Jerome Powell is going to continue to express that they are focused on data at this point,” said Matt Rubin of Cary Street Partners. “And that data does not warrant a cut.” Broader global impact The ripple effect is being felt across Europe too, where the STOXX 600 index closed at a three-week low on Tuesday. Investors are also bracing for interest rate decisions from the Bank of England and the Swiss National Bank later this week. In Asia, the Bank of Japan held rates steady at 0.5 per cent, its highest level since 2007, reflecting the growing uncertainty amid global inflation risks and weak domestic demand. Despite the conflict, Qatar said operations at the world’s largest gas field remain unaffected, even as Iran suspended some output after Israeli air strikes. The Iran–Israel war is redrawing the global economic map, with oil markets, central banks, and investors caught in its crosshairs. The longer it lasts, the deeper its impact on inflation, policy, and global growth. (With inputs from the agencies)

Oil prices surge and markets slip as the Iran–Israel conflict escalates near the Strait of Hormuz, fuelling fears of a global energy shock.

Oil hits sixth-day high, Wall Street wobbles as Iran–Israel tensions escalate

In a defining moment for the crypto industry, the United States Senate has passed the GENIUS Act, a bill that sets up the first comprehensive regulatory framework for stablecoins, or digital tokens pegged to the US dollar.&nbsp;The bipartisan legislation, which passed with a 68-30 vote on Tuesday, marks a historic step in regulating the fast-growing stablecoin market. But it also arrives amid growing scrutiny of President Donald Trump’s personal and political ties to the digital asset industry.&nbsp;As reported by Reuters, the bill officially named the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act requires stablecoin issuers to hold full reserves in liquid assets like US dollars and short-term Treasury bills.&nbsp;&nbsp;It also mandates monthly public disclosures and compliance with anti-money laundering norms.<h2>Why stablecoins matter</h2>Stablecoins are a subset of cryptocurrencies designed to maintain a fixed value, typically pegged 1:1 to the US dollar. Unlike volatile tokens like Bitcoin, stablecoins allow for faster, cheaper digital payments, posing a direct challenge to traditional financial rails.&nbsp;According to a Deutsche Bank study, stablecoin transaction volumes exceeded $28 trillion in 2024, surpassing Visa and Mastercard combined.&nbsp;&nbsp;US-based platforms such as Coinbase, Stripe, and Shopify are already integrating stablecoin-based payments like USDC, signalling a broader shift in the way Americans move money.<h2>A political win for the crypto lobby</h2>The GENIUS Act is the crypto industry’s first major legislative win in Washington. As per Reuters, the sector spent more than $119 million lobbying Congress and backing pro-crypto candidates during the 2024 elections.&nbsp;It also comes as President Trump ramps up efforts to shape crypto policy. His campaign has been actively courting crypto donors, and his allies have been pushing for regulatory clarity in what’s now considered the most pro-crypto Congress in US history.&nbsp;Bo Hines, who chairs Trump’s Council of Advisers on Digital Assets, has said the White House wants a stablecoin law on the books by August.&nbsp;But that aggressive push has raised eyebrows and drawn criticism.<h2>Trump’s billion-dollar crypto empire</h2>According to recent financial disclosures cited by Reuters, Trump earned at least $57 million in 2024 from crypto-related ventures.&nbsp;&nbsp;He holds nearly 16 billion WLFI tokens, governance rights in World Liberty Financial, a crypto firm he partially owns. On paper, those holdings could be worth close to $1 billion.&nbsp;Trump’s digital asset portfolio doesn’t stop there. His crypto ventures include:      •     A meme coin named $TRUMP      •     A $2.5 billion bitcoin reserve      •     Plans for Bitcoin and Ethereum ETFs via Truth.Fi      •     A newly launched mining firm called American Bitcoin&nbsp;While the White House claims Trump’s assets are held in a family-managed trust, critics argue the legislation doesn’t go far enough in addressing presidential conflicts of interest.&nbsp;Senator Jeff Merkley, a Democrat from Oregon, accused Republicans of “rubber-stamping Trump’s crypto corruption,” warning that the bill paves the way for financial self-dealing at the highest levels of government.<h2>House battle looms: STABLE vs GENIUS</h2>Though the Senate has passed the GENIUS Act, the bill still faces hurdles in the Republican-controlled House of Representatives, which is reviewing its own version dubbed the STABLE Act.&nbsp;Both bills agree on key guardrails: no yield-bearing stablecoins and mandatory full-reserve backing. But they diverge on regulatory oversight.&nbsp;&nbsp;While the GENIUS Act centralises supervision with the US Treasury, the House bill splits it among the Federal Reserve, the Comptroller of the Currency, and other agencies.Reconciling the two bills is expected to be complex, congressional aides told Reuters.<h2>A clash of ideologies</h2>The bill’s passage underscores a broader clash in Washington over how to balance innovation and regulation in the crypto space.&nbsp;Senator Elizabeth Warren and others have warned that the GENIUS Act lacks sufficient safeguards, including restrictions on foreign stablecoin issuers and Big Tech players seeking to issue their own digital currencies.&nbsp;In response, the Conference of State Bank Supervisors called for “critical changes” to avoid weakening state-level financial oversight.&nbsp;Despite these concerns, supporters say the bill is a crucial first step.&nbsp;“This is a major milestone,” said Andrew Olmem, a former Trump adviser and current partner at law firm Mayer Brown, as quoted by Reuters. “It finally gives the industry a rulebook.”<h2>What’s next?</h2>With Trump’s crypto holdings under the spotlight and the House gearing up for its own stablecoin debate, the battle over how the US regulates digital money is far from over.&nbsp;But one thing is clear, digital dollars are no longer a fringe idea.&nbsp;&nbsp;With political power and big money behind them, stablecoins are entering the American financial mainstream, and the rules are just beginning to be written.&nbsp;(With inputs from the agencies) &nbsp;

The GENIUS Act sets the stage for US stablecoin regulation amid rising scrutiny of Trump’s billion-dollar crypto empire and political lobbying in Washington.

In a defining moment for the crypto industry, the United States Senate has passed the GENIUS Act, a bill that sets up the first comprehensive regulatory framework for stablecoins, or digital tokens pegged to the US dollar. The bipartisan legislation, which passed with a 68-30 vote on Tuesday, marks a historic step in regulating the fast-growing stablecoin market. But it also arrives amid growing scrutiny of President Donald Trump’s personal and political ties to the digital asset industry. As reported by Reuters, the bill officially named the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act requires stablecoin issuers to hold full reserves in liquid assets like US dollars and short-term Treasury bills. It also mandates monthly public disclosures and compliance with anti-money laundering norms. Why stablecoins matter Stablecoins are a subset of cryptocurrencies designed to maintain a fixed value, typically pegged 1:1 to the US dollar. Unlike volatile tokens like Bitcoin, stablecoins allow for faster, cheaper digital payments, posing a direct challenge to traditional financial rails. According to a Deutsche Bank study, stablecoin transaction volumes exceeded $28 trillion in 2024, surpassing Visa and Mastercard combined. US-based platforms such as Coinbase, Stripe, and Shopify are already integrating stablecoin-based payments like USDC, signalling a broader shift in the way Americans move money. A political win for the crypto lobby The GENIUS Act is the crypto industry’s first major legislative win in Washington. As per Reuters, the sector spent more than $119 million lobbying Congress and backing pro-crypto candidates during the 2024 elections. It also comes as President Trump ramps up efforts to shape crypto policy. His campaign has been actively courting crypto donors, and his allies have been pushing for regulatory clarity in what’s now considered the most pro-crypto Congress in US history. Bo Hines, who chairs Trump’s Council of Advisers on Digital Assets, has said the White House wants a stablecoin law on the books by August. But that aggressive push has raised eyebrows and drawn criticism. Trump’s billion-dollar crypto empire According to recent financial disclosures cited by Reuters, Trump earned at least $57 million in 2024 from crypto-related ventures. He holds nearly 16 billion WLFI tokens, governance rights in World Liberty Financial, a crypto firm he partially owns. On paper, those holdings could be worth close to $1 billion. Trump’s digital asset portfolio doesn’t stop there. His crypto ventures include:       •     A meme coin named $TRUMP       •     A $2.5 billion bitcoin reserve       •     Plans for Bitcoin and Ethereum ETFs via Truth.Fi       •     A newly launched mining firm called American Bitcoin While the White House claims Trump’s assets are held in a family-managed trust, critics argue the legislation doesn’t go far enough in addressing presidential conflicts of interest. Senator Jeff Merkley, a Democrat from Oregon, accused Republicans of “rubber-stamping Trump’s crypto corruption,” warning that the bill paves the way for financial self-dealing at the highest levels of government. House battle looms: STABLE vs GENIUS Though the Senate has passed the GENIUS Act, the bill still faces hurdles in the Republican-controlled House of Representatives, which is reviewing its own version dubbed the STABLE Act. Both bills agree on key guardrails: no yield-bearing stablecoins and mandatory full-reserve backing. But they diverge on regulatory oversight. While the GENIUS Act centralises supervision with the US Treasury, the House bill splits it among the Federal Reserve, the Comptroller of the Currency, and other agencies. Reconciling the two bills is expected to be complex, congressional aides told Reuters. A clash of ideologies The bill’s passage underscores a broader clash in Washington over how to balance innovation and regulation in the crypto space. Senator Elizabeth Warren and others have warned that the GENIUS Act lacks sufficient safeguards, including restrictions on foreign stablecoin issuers and Big Tech players seeking to issue their own digital currencies. In response, the Conference of State Bank Supervisors called for “critical changes” to avoid weakening state-level financial oversight. Despite these concerns, supporters say the bill is a crucial first step. “This is a major milestone,” said Andrew Olmem, a former Trump adviser and current partner at law firm Mayer Brown, as quoted by Reuters. “It finally gives the industry a rulebook.” What’s next? With Trump’s crypto holdings under the spotlight and the House gearing up for its own stablecoin debate, the battle over how the US regulates digital money is far from over. But one thing is clear, digital dollars are no longer a fringe idea. With political power and big money behind them, stablecoins are entering the American financial mainstream, and the rules are just beginning to be written. (With inputs from the agencies)

The US Senate has passed the landmark GENIUS Act, giving stablecoins their first clear rulebook as Trump’s deep crypto ties spark conflict-of-interest concerns.

GENIUS Act: US Senate passes landmark crypto bill amid Trump’s billion-dollar stablecoin push

The global oil market is entering a new phase of structural change as oil production capacity is expected to far outpace demand growth through the end of the decade, the International Energy Agency (IEA) said in its Oil 2025 medium-term outlook released on June 17.&nbsp;The report warns, however, that mounting geopolitical risks, notably the intensifying Israel-Iran conflict, continue to pose a threat to supply security despite strong fundamentals.According to the IEA, global oil production capacity is forecast to grow by over 5 million barrels per day (mb/d) by 2030, reaching 114.7 mb/d. Meanwhile, demand is expected to rise by just 2.5 mb/d from 2024 levels, plateauing around 105.5 mb/d by the decade’s end.&nbsp;This growing surplus signals a potentially well-supplied market over the next five years, barring any major disruptions.The agency attributed this supply growth to robust output from non-OPEC+ countries, particularly the “Americas Quintet”, the United States, Canada, Brazil, Guyana, and Argentina.&nbsp;These nations are forecast to more than cover the projected increase in demand, even as the OPEC+ alliance gradually unwinds voluntary production cuts.“From 2015 to 2024, the US accounted for 90 per cent of global supply growth. That pace is slowing, but it still remains the largest contributor to non-OPEC+ output,” IEA Executive Director Fatih Birol said. He added that oil markets remain structurally sound but vulnerable to geopolitical shocks.<h2>China and US no longer primary demand-supply anchors</h2>The report marks a significant turning point in global oil market dynamics. For over a decade, China and the US were the dual engines of oil demand and supply, respectively.&nbsp;Chinese demand alone accounted for 60 per cent of global consumption growth over the past 10 years, while US shale production drove the majority of new supply.However, that era may be ending. Chinese oil consumption is expected to peak by 2027 as electric vehicle (EV) sales soar, high-speed rail networks expand, and more trucks switch to natural gas. EV sales hit a record 17 million in 2024 and are projected to exceed 20 million in 2025, displacing an estimated 5.4 mb/d of oil demand globally by 2030.Meanwhile, US oil output growth is slowing as shale producers reduce capital spending and prioritise returns over expansion. Despite this, the US remains the single largest contributor to non-OPEC supply growth through the decade.<h2>Asia will drive future demand, led by India</h2>While demand in advanced economies is expected to contract, Asia, particularly India, is set to lead the next wave of oil consumption growth. India alone is forecast to add 1 mb/d in new demand by 2030, making it the single largest contributor among individual countries.“Asia dominates growth,” the report notes, citing continued industrialisation and rising transportation fuel needs across South and Southeast Asia. This shift underscores a broader rebalancing in global energy consumption patterns.The petrochemical sector is also set to become the dominant source of oil demand growth from 2026 onwards. By 2030, the industry is expected to consume one in every six barrels of oil, primarily in the form of natural gas liquids (NGLs) and other non-crude inputs.<h2>Geopolitical risks cast a shadow</h2>Despite the projected supply surplus, recent geopolitical events have raised alarms over potential disruptions. On June 13, Israel launched air strikes on Iranian military and energy facilities, prompting retaliatory attacks.&nbsp;Though there has been no immediate impact on Iranian oil exports, currently around 2.6 mb/d, fears of a wider conflict and a potential closure of the Strait of Hormuz pushed Brent crude futures to a six-month high of $74 per barrel.Iran also reported production cuts at the South Pars gas field due to fire damage, while Israel halted over 60 per cent of its natural gas output amid security concerns. The Strait of Hormuz remains a critical chokepoint for global energy flows, with 25 per cent of the world’s oil supply passing through the narrow waterway.“While fundamentals point to a well-supplied market, these recent developments are a stark reminder of the ongoing geopolitical fragility in oil markets,” Birol warned.<h2>Refining and inventory trends</h2>With oil demand for combustion fuels nearing a peak, global refining capacity is projected to exceed demand for refined products by 2030. This imbalance may lead to more refinery closures, especially in mature markets. Refinery throughput is forecast to rise modestly by around 460 kb/d annually in 2025 and 2026, reaching 83.7 mb/d.Oil inventories have been rising steadily, with global stocks surging by 93 million barrels in May alone. Despite this, OECD inventories remain 97 million barrels below 2024 levels, reflecting ongoing volatility in market sentiment.In the absence of major disruptions, the IEA projects a stable, oversupplied oil market through 2030. Yet, the shadow of geopolitical conflict and the energy transition underscores a fragile balance. As Birol concluded, “There is no room for complacency when it comes to energy security.”

The report warns, however, that mounting geopolitical risks, notably the intensifying Israel-Iran conflict, continue to pose a threat to supply security despite strong fundamentals.

The global oil market is entering a new phase of structural change as oil production capacity is expected to far outpace demand growth through the end of the decade, the International Energy Agency (IEA) said in its Oil 2025 medium-term outlook released on June 17. The report warns, however, that mounting geopolitical risks, notably the intensifying Israel-Iran conflict, continue to pose a threat to supply security despite strong fundamentals. According to the IEA, global oil production capacity is forecast to grow by over 5 million barrels per day (mb/d) by 2030, reaching 114.7 mb/d. Meanwhile, demand is expected to rise by just 2.5 mb/d from 2024 levels, plateauing around 105.5 mb/d by the decade’s end. This growing surplus signals a potentially well-supplied market over the next five years, barring any major disruptions. The agency attributed this supply growth to robust output from non-OPEC+ countries, particularly the “Americas Quintet”, the United States, Canada, Brazil, Guyana, and Argentina. These nations are forecast to more than cover the projected increase in demand, even as the OPEC+ alliance gradually unwinds voluntary production cuts. “From 2015 to 2024, the US accounted for 90 per cent of global supply growth. That pace is slowing, but it still remains the largest contributor to non-OPEC+ output,” IEA Executive Director Fatih Birol said. He added that oil markets remain structurally sound but vulnerable to geopolitical shocks. China and US no longer primary demand-supply anchors The report marks a significant turning point in global oil market dynamics. For over a decade, China and the US were the dual engines of oil demand and supply, respectively. Chinese demand alone accounted for 60 per cent of global consumption growth over the past 10 years, while US shale production drove the majority of new supply. However, that era may be ending. Chinese oil consumption is expected to peak by 2027 as electric vehicle (EV) sales soar, high-speed rail networks expand, and more trucks switch to natural gas. EV sales hit a record 17 million in 2024 and are projected to exceed 20 million in 2025, displacing an estimated 5.4 mb/d of oil demand globally by 2030. Meanwhile, US oil output growth is slowing as shale producers reduce capital spending and prioritise returns over expansion. Despite this, the US remains the single largest contributor to non-OPEC supply growth through the decade. Asia will drive future demand, led by India While demand in advanced economies is expected to contract, Asia, particularly India, is set to lead the next wave of oil consumption growth. India alone is forecast to add 1 mb/d in new demand by 2030, making it the single largest contributor among individual countries. “Asia dominates growth,” the report notes, citing continued industrialisation and rising transportation fuel needs across South and Southeast Asia. This shift underscores a broader rebalancing in global energy consumption patterns. The petrochemical sector is also set to become the dominant source of oil demand growth from 2026 onwards. By 2030, the industry is expected to consume one in every six barrels of oil, primarily in the form of natural gas liquids (NGLs) and other non-crude inputs. Geopolitical risks cast a shadow Despite the projected supply surplus, recent geopolitical events have raised alarms over potential disruptions. On June 13, Israel launched air strikes on Iranian military and energy facilities, prompting retaliatory attacks. Though there has been no immediate impact on Iranian oil exports, currently around 2.6 mb/d, fears of a wider conflict and a potential closure of the Strait of Hormuz pushed Brent crude futures to a six-month high of $74 per barrel. Iran also reported production cuts at the South Pars gas field due to fire damage, while Israel halted over 60 per cent of its natural gas output amid security concerns. The Strait of Hormuz remains a critical chokepoint for global energy flows, with 25 per cent of the world’s oil supply passing through the narrow waterway. “While fundamentals point to a well-supplied market, these recent developments are a stark reminder of the ongoing geopolitical fragility in oil markets,” Birol warned. Refining and inventory trends With oil demand for combustion fuels nearing a peak, global refining capacity is projected to exceed demand for refined products by 2030. This imbalance may lead to more refinery closures, especially in mature markets. Refinery throughput is forecast to rise modestly by around 460 kb/d annually in 2025 and 2026, reaching 83.7 mb/d. Oil inventories have been rising steadily, with global stocks surging by 93 million barrels in May alone. Despite this, OECD inventories remain 97 million barrels below 2024 levels, reflecting ongoing volatility in market sentiment. In the absence of major disruptions, the IEA projects a stable, oversupplied oil market through 2030. Yet, the shadow of geopolitical conflict and the energy transition underscores a fragile balance. As Birol concluded, “There is no room for complacency when it comes to energy security.”

The report warns, however, that mounting geopolitical risks, notably the intensifying Israel-Iran conflict, continue to pose a threat to supply security despite strong fundamentals.

Oil market set for oversupply through 2030, says IEA amid geopolitical tensions

Japan, long recognised for its pacifist constitution and decades of minimal engagement in global arms trade, is signalling a historic shift in defence policy. With rising geopolitical tensions and the strategic need to bolster its defence industry, the country is now laying the groundwork to become a competitive player in the global arms export market.Defense Minister Gen Nakatani recently told Nikkei Asia that he wants the cabinet to actively promote Japan’s defence exports, in what marks a sharp departure from the country’s traditionally insular military posture.&nbsp;Prime Minister Shigeru Ishiba has also signalled support for the change, becoming the first sitting Japanese premier to attend DSEI Japan, the country’s largest defence industry trade show.<h2>Deepening strategic ties</h2>Experts say the policy pivot is motivated less by economic incentives and more by security concerns and the desire for greater interoperability with allies, especially the United States.By exporting arms to friendly nations, Japan aims to standardise military hardware, streamline maintenance, and conduct joint training more effectively.The move also comes as international defence spending continues to rise. At the recent 2025 Shangri-La Dialogue, US Defense Secretary Pete Hegseth emphasised that American allies must shoulder more of their own security burden, citing NATO’s pledge to spend 5 per cent of GDP on defence.&nbsp;Analysts suggest that Japan’s increased focus on defence exports also reflects growing concern over regional threats, particularly from North Korea and China.<h2>Rebuilding a struggling industry</h2>Japan’s defence industrial base has long relied on limited domestic demand from the Japan Self-Defense Forces (JSDF). Unlike countries such as South Korea or China, Japan has historically placed strict restrictions on arms exports.&nbsp;A 1967 policy known as the “Three Principles on Arms Exports” nearly eliminated overseas sales. While former Prime Minister Abe began easing those rules, further reforms under Fumio Kishida in 2023 have allowed Japan to manufacture and export weapons systems, including licensed products like Patriot missiles, which are now being sent to the US.Yet, the domestic defence industry is still catching up. Over 100 companies have exited the defence sector in the last two decades due to low demand and high dependency on US imports such as F-35 fighters and SPY-7 radar systems.&nbsp;<h2>Global ambitions and domestic challenges</h2>As of 2024, Japan’s arms exports remain modest—just 21 million TIV (trend indicator values), or 0.1 per cent of global arms exports, according to the Stockholm International Peace Research Institute (SIPRI). By contrast, South Korea exported 936 million TIV, while China shipped 1.13 billion TIV worth of weapons.CNBC reported that investor David Roche, of Quantum Strategy, believes Japan has the potential to become a key player. “Demand will exceed supply for a decade,” he said, noting that continued dependence on US arms could prove costly if American foreign policy becomes more transactional.Japan also faces demographic headwinds that could hinder its ability to scale manufacturing, and export regulations remain relatively strict.&nbsp;Japan has recently promoted homegrown assets like fighter jets and frigates in international forums and is working to upgrade defence cooperation with the EU, according to Nikkei Asia.&nbsp;While still early days, the country’s evolving stance signals a strategic reorientation, one that may redefine Japan’s role in regional and global security for decades to come.

Experts say the policy pivot is motivated less by economic incentives and more by security concerns and the desire for greater interoperability with allies, especially the United States.

Japan, long recognised for its pacifist constitution and decades of minimal engagement in global arms trade, is signalling a historic shift in defence policy. With rising geopolitical tensions and the strategic need to bolster its defence industry, the country is now laying the groundwork to become a competitive player in the global arms export market. Defense Minister Gen Nakatani recently told Nikkei Asia that he wants the cabinet to actively promote Japan’s defence exports, in what marks a sharp departure from the country’s traditionally insular military posture. Prime Minister Shigeru Ishiba has also signalled support for the change, becoming the first sitting Japanese premier to attend DSEI Japan, the country’s largest defence industry trade show. Deepening strategic ties Experts say the policy pivot is motivated less by economic incentives and more by security concerns and the desire for greater interoperability with allies, especially the United States. By exporting arms to friendly nations, Japan aims to standardise military hardware, streamline maintenance, and conduct joint training more effectively. The move also comes as international defence spending continues to rise. At the recent 2025 Shangri-La Dialogue, US Defense Secretary Pete Hegseth emphasised that American allies must shoulder more of their own security burden, citing NATO’s pledge to spend 5 per cent of GDP on defence. Analysts suggest that Japan’s increased focus on defence exports also reflects growing concern over regional threats, particularly from North Korea and China. Rebuilding a struggling industry Japan’s defence industrial base has long relied on limited domestic demand from the Japan Self-Defense Forces (JSDF). Unlike countries such as South Korea or China, Japan has historically placed strict restrictions on arms exports. A 1967 policy known as the “Three Principles on Arms Exports” nearly eliminated overseas sales. While former Prime Minister Abe began easing those rules, further reforms under Fumio Kishida in 2023 have allowed Japan to manufacture and export weapons systems, including licensed products like Patriot missiles, which are now being sent to the US. Yet, the domestic defence industry is still catching up. Over 100 companies have exited the defence sector in the last two decades due to low demand and high dependency on US imports such as F-35 fighters and SPY-7 radar systems. Global ambitions and domestic challenges As of 2024, Japan’s arms exports remain modest—just 21 million TIV (trend indicator values), or 0.1 per cent of global arms exports, according to the Stockholm International Peace Research Institute (SIPRI). By contrast, South Korea exported 936 million TIV, while China shipped 1.13 billion TIV worth of weapons. CNBC reported that investor David Roche, of Quantum Strategy, believes Japan has the potential to become a key player. “Demand will exceed supply for a decade,” he said, noting that continued dependence on US arms could prove costly if American foreign policy becomes more transactional. Japan also faces demographic headwinds that could hinder its ability to scale manufacturing, and export regulations remain relatively strict. Japan has recently promoted homegrown assets like fighter jets and frigates in international forums and is working to upgrade defence cooperation with the EU, according to Nikkei Asia. While still early days, the country’s evolving stance signals a strategic reorientation, one that may redefine Japan’s role in regional and global security for decades to come.

Experts say that Japan's policy pivot is motivated less by economic incentives and more by security concerns and the desire for greater interoperability with allies, especially the United States.

Japan eyes global arms market in strategic shift from pacifist roots

Gold has emerged as 2025’s most reliable safe haven, far outpacing traditional defensive assets such as the US dollar, Japanese yen, Swiss franc, and US Treasuries.&nbsp;With spot gold prices surging nearly 30 per cent year-to-date, bullion has reasserted itself as the asset of choice amid mounting fiscal uncertainty and escalating geopolitical conflict, especially in West Asia.As of June 16, gold traded at $3,414 per ounce, staying within striking distance of its all-time high above $3,500 recorded in April. A recent pullback of 0.5 per cent from June 13’s close hasn’t dampened sentiment, with analysts citing a mix of technical consolidation and a temporary lull in market volatility. Despite the minor dip, gold remains less than 2 per cent away from retesting its record.<h2>Why gold, why now?</h2>The appeal of gold lies in its independence from sovereign credit risk. “Gold’s key advantage is that it is no one else’s liability,” said Nikos Kavalis, managing director at Metals Focus, during the Asia Pacific Precious Metals Conference. In contrast, assets like government bonds and currencies are tied directly to national economic performance and political stability.This distinction has become more pronounced as investors reassess the reliability of traditional safe havens. The US dollar index has weakened nearly 10 per cent in 2025, while the 10-year Treasury yield has fallen 19 basis points, reflecting weakening demand.&nbsp;Japanese government bonds and the yen have also lost some of their shine due to rising yields and interest rate differentials.Experts point out a growing unease about the long-term outlook of US debt and the dollar. With President Donald Trump’s aggressive tariff strategy roiling markets and Moody’s recent downgrade of US credit ratings, investor confidence in US Treasuries has eroded.Meanwhile, central banks have doubled down on gold, with over 1,000 tonnes added to reserves globally for the third straight year. The European Central Bank even reported that gold has overtaken the euro as the world’s second-largest reserve asset, now comprising 21 per cent of global holdings.<h2>Geopolitics and gold demand converge</h2>In India, gold remains on a bullish trajectory, boosted by ongoing tensions between Israel and Iran. The spot price in Ahmedabad closed at ₹98,732 per 10 grams on June 13, with futures touching ₹1,01,078 per 10 grams ($1,172) on June 16. Gold is up a staggering 47 per cent over the past year, with the surge attributed to global conflict, central bank diversification, and a weaker US dollar.Technically, gold remains above its key resistance level of $3,410 per ounce, and analysts see the potential for a retest of April’s record high.&nbsp;If bullish momentum persists, prices could break through the psychological level of $3,468 per ounce and target new highs at $3,602 per ounce or even $3,762 per ounce in the coming weeks, aided by continued safe-haven flows and seasonal planetary patterns cited by some technical analysts.With inflation fears simmering, interest rate cuts expected by September, and geopolitical tensions far from resolved, gold’s role as a stabilising force in a volatile world is clearer than ever.

Gold prices hover near record highs, driven by geopolitical tensions, investor fear, and central bank demand.

Gold has emerged as 2025’s most reliable safe haven, far outpacing traditional defensive assets such as the US dollar, Japanese yen, Swiss franc, and US Treasuries. With spot gold prices surging nearly 30 per cent year-to-date, bullion has reasserted itself as the asset of choice amid mounting fiscal uncertainty and escalating geopolitical conflict, especially in West Asia. As of June 16, gold traded at $3,414 per ounce, staying within striking distance of its all-time high above $3,500 recorded in April. A recent pullback of 0.5 per cent from June 13’s close hasn’t dampened sentiment, with analysts citing a mix of technical consolidation and a temporary lull in market volatility. Despite the minor dip, gold remains less than 2 per cent away from retesting its record. Why gold, why now? The appeal of gold lies in its independence from sovereign credit risk. “Gold’s key advantage is that it is no one else’s liability,” said Nikos Kavalis, managing director at Metals Focus, during the Asia Pacific Precious Metals Conference. In contrast, assets like government bonds and currencies are tied directly to national economic performance and political stability. This distinction has become more pronounced as investors reassess the reliability of traditional safe havens. The US dollar index has weakened nearly 10 per cent in 2025, while the 10-year Treasury yield has fallen 19 basis points, reflecting weakening demand. Japanese government bonds and the yen have also lost some of their shine due to rising yields and interest rate differentials. Experts point out a growing unease about the long-term outlook of US debt and the dollar. With President Donald Trump’s aggressive tariff strategy roiling markets and Moody’s recent downgrade of US credit ratings, investor confidence in US Treasuries has eroded. Meanwhile, central banks have doubled down on gold, with over 1,000 tonnes added to reserves globally for the third straight year. The European Central Bank even reported that gold has overtaken the euro as the world’s second-largest reserve asset, now comprising 21 per cent of global holdings. Geopolitics and gold demand converge In India, gold remains on a bullish trajectory, boosted by ongoing tensions between Israel and Iran. The spot price in Ahmedabad closed at ₹98,732 per 10 grams on June 13, with futures touching ₹1,01,078 per 10 grams ($1,172) on June 16. Gold is up a staggering 47 per cent over the past year, with the surge attributed to global conflict, central bank diversification, and a weaker US dollar. Technically, gold remains above its key resistance level of $3,410 per ounce, and analysts see the potential for a retest of April’s record high. If bullish momentum persists, prices could break through the psychological level of $3,468 per ounce and target new highs at $3,602 per ounce or even $3,762 per ounce in the coming weeks, aided by continued safe-haven flows and seasonal planetary patterns cited by some technical analysts. With inflation fears simmering, interest rate cuts expected by September, and geopolitical tensions far from resolved, gold’s role as a stabilising force in a volatile world is clearer than ever.

Gold prices hover near record highs, driven by geopolitical tensions, investor fear, and central bank demand.

Gold shines brightest as 2025’s ultimate safe haven amid global uncertainty

The Bank of Japan (BOJ) is pressing pause on the pace of its balance sheet drawdown, signalling a cautious turn in its policy normalisation journey amid rising global uncertainty.&nbsp;On Tuesday, the central bank held interest rates steady at 0.5 per cent, its highest level since 2007, but announced that it would reduce its purchases of Japanese Government Bonds (JGBs) at a slower pace beginning next year, as reported by Reuters.<h2>What exactly did the BOJ decide?</h2>Since ending its yield curve control and negative interest rate policy, the BOJ has been gradually scaling back its massive JGB holdings in a bid to exit its decade-long ultra-loose monetary regime. Under the previous plan, the bank was reducing bond purchases by around 400 billion yen (approximately $2.8 billion) per quarter.&nbsp;Now, starting April 2026, the pace will be halved to 200 billion yen per quarter, effectively delaying the target of tapering bond purchases to 2 trillion yen per month until March 2027, as quoted by Reuters.&nbsp;The move marks a significant shift in tone, especially as inflation in Japan remains above the BOJ’s 2 per cent target. Consumer prices rose 3.5 per cent year-on-year in April, driven by surging food costs and sustained wage pressures, Reuters reported.<h2>Why slow down now?</h2>Two words: global risk.&nbsp;The BOJ’s revised taper plan comes as storm clouds gather over the global economy. An escalating Iran–Israel conflict has triggered fears of energy price shocks, while fresh US trade tariffs on Japanese goods — imposed under President Donald Trump’s new “reciprocal” policy, threaten to derail Japan’s export recovery.&nbsp;In a statement, the BOJ said it would act “nimbly” if long-term interest rates spiked, hinting at readiness to buy more bonds again if market volatility resurfaces, as per Reuters.&nbsp;As Lee Hardman of MUFG noted before the meeting, “The recent softening of the yen could already partly reflect expectations for a cautious policy update from the BOJ… alongside negative spillovers for Japan from the Middle East conflict,” as quoted by Reuters.<h2>Bond market turmoil prompts caution</h2>The BOJ’s decision follows weeks of volatility in the JGB market. Last month, a weak auction of 20-year bonds sent yields soaring across maturities, with the 40-year JGB yield hitting a record 3.675 per cent. Demand from traditional buyers like insurers has waned, adding to market instability, according to Reuters.&nbsp;With Japan’s debt burden standing at a staggering 250 per cent of GDP, the highest in the developed world — any spike in yields poses significant fiscal risks. Finance Minister Katsunobu Kato warned that higher borrowing costs “could further imperil Japan’s finances,” as per Reuters.&nbsp;To calm nerves, the finance ministry is reportedly planning to cut issuance of super-long bonds and may even launch buybacks to contain borrowing costs, Reuters has reported.<h2>Domestic pressure vs external shocks</h2>While Japan’s economy is seeing inflation, the BOJ is walking a tightrope. On the one hand, persistent cost pressures and labour shortages are prompting firms to raise wages, a potential sign of sustainable inflation.&nbsp;But on the other hand, sluggish exports, Trump’s tariff threats, and war-driven oil volatility threaten to choke off growth. Prime Minister Shigeru Ishiba has admitted that trade talks with the US have not produced a breakthrough, as quoted by Reuters.&nbsp;Carol Kong of the Commonwealth Bank of Australia told AFP that “slowing the bond taper will help keep interest rates lower than otherwise, providing support to the economy amid heightened trade uncertainty.”<h2>What’s next?</h2>The BOJ said it will conduct an interim review of its fiscal 2026 taper strategy at its policy meeting in June next year. Analysts believe the bank could resume rate hikes later in 2025, if inflation remains sticky and economic growth holds.&nbsp;But until then, the message from Tokyo is clear: caution first.&nbsp;As the world’s third-largest economy battles both internal and external headwinds, the BOJ is in no rush to tighten the screws, especially with a volatile bond market and geopolitical turmoil at its doorstep.&nbsp;(With inputs from the agencies) &nbsp;

The recent turmoil in the bond market has prompted caution from the Bank of Japan (BOJ), especially following a weak auction of 20-year bonds, leading to soaring yields. 

The Bank of Japan (BOJ) is pressing pause on the pace of its balance sheet drawdown, signalling a cautious turn in its policy normalisation journey amid rising global uncertainty. On Tuesday, the central bank held interest rates steady at 0.5 per cent, its highest level since 2007, but announced that it would reduce its purchases of Japanese Government Bonds (JGBs) at a slower pace beginning next year, as reported by Reuters. What exactly did the BOJ decide? Since ending its yield curve control and negative interest rate policy, the BOJ has been gradually scaling back its massive JGB holdings in a bid to exit its decade-long ultra-loose monetary regime. Under the previous plan, the bank was reducing bond purchases by around 400 billion yen (approximately $2.8 billion) per quarter. Now, starting April 2026, the pace will be halved to 200 billion yen per quarter, effectively delaying the target of tapering bond purchases to 2 trillion yen per month until March 2027, as quoted by Reuters. The move marks a significant shift in tone, especially as inflation in Japan remains above the BOJ’s 2 per cent target. Consumer prices rose 3.5 per cent year-on-year in April, driven by surging food costs and sustained wage pressures, Reuters reported. Why slow down now? Two words: global risk. The BOJ’s revised taper plan comes as storm clouds gather over the global economy. An escalating Iran–Israel conflict has triggered fears of energy price shocks, while fresh US trade tariffs on Japanese goods — imposed under President Donald Trump’s new “reciprocal” policy, threaten to derail Japan’s export recovery. In a statement, the BOJ said it would act “nimbly” if long-term interest rates spiked, hinting at readiness to buy more bonds again if market volatility resurfaces, as per Reuters. As Lee Hardman of MUFG noted before the meeting, “The recent softening of the yen could already partly reflect expectations for a cautious policy update from the BOJ… alongside negative spillovers for Japan from the Middle East conflict,” as quoted by Reuters. Bond market turmoil prompts caution The BOJ’s decision follows weeks of volatility in the JGB market. Last month, a weak auction of 20-year bonds sent yields soaring across maturities, with the 40-year JGB yield hitting a record 3.675 per cent. Demand from traditional buyers like insurers has waned, adding to market instability, according to Reuters. With Japan’s debt burden standing at a staggering 250 per cent of GDP, the highest in the developed world — any spike in yields poses significant fiscal risks. Finance Minister Katsunobu Kato warned that higher borrowing costs “could further imperil Japan’s finances,” as per Reuters. To calm nerves, the finance ministry is reportedly planning to cut issuance of super-long bonds and may even launch buybacks to contain borrowing costs, Reuters has reported. Domestic pressure vs external shocks While Japan’s economy is seeing inflation, the BOJ is walking a tightrope. On the one hand, persistent cost pressures and labour shortages are prompting firms to raise wages, a potential sign of sustainable inflation. But on the other hand, sluggish exports, Trump’s tariff threats, and war-driven oil volatility threaten to choke off growth. Prime Minister Shigeru Ishiba has admitted that trade talks with the US have not produced a breakthrough, as quoted by Reuters. Carol Kong of the Commonwealth Bank of Australia told AFP that “slowing the bond taper will help keep interest rates lower than otherwise, providing support to the economy amid heightened trade uncertainty.” What’s next? The BOJ said it will conduct an interim review of its fiscal 2026 taper strategy at its policy meeting in June next year. Analysts believe the bank could resume rate hikes later in 2025, if inflation remains sticky and economic growth holds. But until then, the message from Tokyo is clear: caution first. As the world’s third-largest economy battles both internal and external headwinds, the BOJ is in no rush to tighten the screws, especially with a volatile bond market and geopolitical turmoil at its doorstep. (With inputs from the agencies)

The Bank of Japan (BOJ) is slowing its balance sheet drawdown, maintaining interest rates at 0.5% and reducing Japanese Government Bond (JGB) purchases from 400 billion yen to 200 billion yen quarterly starting April 2026.

BOJ keeps rates steady, slows bond taper,  what it means for Japan’s economy?

ChatGPT-maker OpenAI has landed a $200 million contract from the United States Department of Defense&nbsp;to develop cutting-edge artificial intelligence tools for military applications, the Pentagon confirmed on Monday.&nbsp;It is the company’s most high-profile defence contract to date, placing OpenAI, originally a consumer-facing tech firm, at the heart of America’s military–AI transformation.&nbsp;“Under this award, the performer will develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains,” the Pentagon stated.&nbsp;The work will be carried out primarily in and around Washington, with an estimated completion date of July 2026.<h2>Why it matters</h2>The deal underscores Washington’s push to harness frontier AI systems for battlefield readiness, faster intelligence synthesis, and advanced decision-making, as strategic rivalries with China and Russia intensify.&nbsp;It also marks OpenAI’s formal entry into the defence establishment, a major evolution for a company better known for revolutionising education and corporate workflows with tools like ChatGPT and Codex.&nbsp;As of March 2025, OpenAI had 500 million weekly active users. The company said this month that its annualised revenue run rate had surged to $10 billion, on track to meet its 2025 targets amid soaring global AI adoption.<h2>Defence AI gets a Silicon Valley upgrade</h2>The contract follows guidance issued by the White House’s Office of Management and Budget (OMB) in April, encouraging federal agencies to foster a competitive American AI sector. National security and defence systems were explicitly exempted from the tighter AI oversight — allowing agencies like the Pentagon to move quickly.&nbsp;That exemption is now being leveraged to formalise OpenAI’s military partnership.&nbsp;Reuters has reported that OpenAI is in talks to raise as much as $40 billion in a new funding round led by Japan’s SoftBank, at a $300 billion valuation — underlining investor confidence in its long-term strategic relevance.<h2>The bigger picture</h2>The US military has long experimented with AI through its research arm, DARPA. But this new agreement represents a turning point — where private AI leaders are brought directly into core national security missions.&nbsp;While technical specifics remain classified, the AI tools are expected to support capabilities such as autonomous decision-making, threat detection, secure communications, and multilingual data analysis.&nbsp;The move is likely to be watched closely in Beijing and Moscow, both of whom have ramped up investments in military-grade AI.The Pentagon’s new AI contract is not just about innovation, it’s about preserving a strategic edge in what many now call the AI arms race. (With inputs from the agencies)&nbsp;

This contract aims to enhance national security capabilities amid rising competition with China and Russia. Work will focus on autonomous decision-making and threat detection, with completion expected by July 2026. 

ChatGPT-maker OpenAI has landed a $200 million contract from the United States Department of Defense to develop cutting-edge artificial intelligence tools for military applications, the Pentagon confirmed on Monday. It is the company’s most high-profile defence contract to date, placing OpenAI, originally a consumer-facing tech firm, at the heart of America’s military–AI transformation. “Under this award, the performer will develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains,” the Pentagon stated. The work will be carried out primarily in and around Washington, with an estimated completion date of July 2026. Why it matters The deal underscores Washington’s push to harness frontier AI systems for battlefield readiness, faster intelligence synthesis, and advanced decision-making, as strategic rivalries with China and Russia intensify. It also marks OpenAI’s formal entry into the defence establishment, a major evolution for a company better known for revolutionising education and corporate workflows with tools like ChatGPT and Codex. As of March 2025, OpenAI had 500 million weekly active users. The company said this month that its annualised revenue run rate had surged to $10 billion, on track to meet its 2025 targets amid soaring global AI adoption. Defence AI gets a Silicon Valley upgrade The contract follows guidance issued by the White House’s Office of Management and Budget (OMB) in April, encouraging federal agencies to foster a competitive American AI sector. National security and defence systems were explicitly exempted from the tighter AI oversight — allowing agencies like the Pentagon to move quickly. That exemption is now being leveraged to formalise OpenAI’s military partnership. Reuters has reported that OpenAI is in talks to raise as much as $40 billion in a new funding round led by Japan’s SoftBank, at a $300 billion valuation — underlining investor confidence in its long-term strategic relevance. The bigger picture The US military has long experimented with AI through its research arm, DARPA. But this new agreement represents a turning point — where private AI leaders are brought directly into core national security missions. While technical specifics remain classified, the AI tools are expected to support capabilities such as autonomous decision-making, threat detection, secure communications, and multilingual data analysis. The move is likely to be watched closely in Beijing and Moscow, both of whom have ramped up investments in military-grade AI. The Pentagon’s new AI contract is not just about innovation, it’s about preserving a strategic edge in what many now call the AI arms race. (With inputs from the agencies)

OpenAI has secured a $200 million contract with the U.S. Department of Defense to develop advanced AI tools for military use, marking its entry into defence.

OpenAI bags $200 million Pentagon contract to build AI tools for US military

The Trump Organization has unveiled its latest business venture: a mobile phone service called Trump Mobile and an Android-based smartphone named the T1, priced at $499.&nbsp;Both are set to launch in September and represent the Trump family's most ambitious foray into the consumer electronics and telecommunications sector.The new service, branded “The 47 Plan” in reference to Donald Trump’s position as the 47th US president, will cost $47.45 per month. It offers unlimited calls, texts, and data, in addition to roadside assistance and a “Telehealth and Pharmacy Benefit”.&nbsp;The T1 smartphone, meanwhile, features a gold-coloured casing etched with an American flag and is being marketed as “designed and built in the United States”.This move is the latest in a series of branded consumer products promoted under the Trump name, following Trump-branded sneakers, watches, and fragrances.&nbsp;The family has leveraged Trump's political brand and loyal following to expand their portfolio, with the president reporting over $8 million in licensing income in 2024 alone.<h2>Spec sheet promises high-end features</h2>According to the Trump Organization website, the T1 phone boasts premium features at its sub-$500 price tag. These include a 6.8-inch AMOLED (Active Matrix Organic Light Emitting Diode) display, a 50-megapixel main camera, a 16-megapixel front camera, 12GB of RAM, 256GB of storage (expandable), and a 5,000 mAh battery.&nbsp;The device also includes a headphone jack and an in-display fingerprint sensor, features not available on the latest iPhones.The company claims the T1 will run Android 15 and offer performance on par with top-tier smartphones like Apple’s iPhone 16 Pro Max, which starts at over $1,000. The website also asserts that the mobile plan will use the same coverage as the three nationwide phone service carriers and include a US-based customer support centre.However, several details remain vague, including the identity of the telecom partner enabling the service and the exact specifications of the T1’s processor—a critical component in any modern smartphone.<h2>Built in the USA? Experts raise questions</h2>Perhaps the most contentious claim surrounding the T1 is its manufacturing origin. A Trump Organization press release states that the device is “proudly designed and built in the United States”, with operations in Alabama, California, and Florida. But industry experts widely dispute the feasibility of this assertion.Building a high-end smartphone entirely within the United States is currently considered impractical, if not impossible, due to the lack of necessary supply chain infrastructure.&nbsp;Most components, including AMOLED displays, high-performance chips, and smartphone-grade cameras, are sourced from Asia, particularly China, Taiwan, South Korea, and Japan.Professor Tinglong Dai of Johns Hopkins University told WSJ that it would take “at least five years” and billions of dollars in investment to build the capabilities necessary to fully manufacture smartphones in the US. He noted that the US currently lacks the factories, workforce skills, and component suppliers needed for end-to-end production.Even Eric Trump admitted during an appearance at Benny Johnson’s podcast, The Benny Show, on June 16 that the first wave of phones may not be built in the US, although he insisted that domestic production was the long-term goal. “Eventually, all the phones can be built in the United States of America,” he said while showcasing the device.<h2>Ethical and political implications</h2>The rollout of Trump Mobile has reignited longstanding concerns over ethics and conflicts of interest surrounding Trump’s continued business ventures while holding public office.&nbsp;Critics argue that the enterprise could allow companies or individuals seeking influence to curry favour by subscribing to the service or purchasing Trump-branded products.The project raises familiar questions about self-enrichment and the use of presidential power for personal profit. Although The Trump Organization has maintained that the service operates under a licensing agreement and is not directly managed by Donald Trump or his affiliates.The wireless plan’s price—$47.45 per month—is notably higher than comparable offerings from competitors like Mint Mobile ($30/month) and Verizon’s Visible service ($25/month), adding further scrutiny to its value proposition.<h2>A niche telecom gamble</h2>The US wireless market is dominated by Verizon, AT&amp;T, and T-Mobile, but smaller virtual network operators have carved out niche audiences by renting bandwidth from these carriers. Mint Mobile, for example, was sold to T-Mobile for $1.35 billion in 2023 after attracting a few million subscribers.Whether Trump Mobile can compete remains to be seen, but analysts agree the venture is designed to appeal to Trump’s politically loyal base. The pre-order campaign is already live, promoting patriotic branding, American-made claims, and service aligned with conservative values.As with many of the Trump Organization’s past branded ventures, success may depend less on product specs and more on the enduring commercial power of the Trump name.

New venture expands Trump-branded business empire into telecom, but ‘Made in USA’ claims face skepticism.

The Trump Organization has unveiled its latest business venture: a mobile phone service called Trump Mobile and an Android-based smartphone named the T1, priced at $499. Both are set to launch in September and represent the Trump family's most ambitious foray into the consumer electronics and telecommunications sector. The new service, branded “The 47 Plan” in reference to Donald Trump’s position as the 47th US president, will cost $47.45 per month. It offers unlimited calls, texts, and data, in addition to roadside assistance and a “Telehealth and Pharmacy Benefit”. The T1 smartphone, meanwhile, features a gold-coloured casing etched with an American flag and is being marketed as “designed and built in the United States”. This move is the latest in a series of branded consumer products promoted under the Trump name, following Trump-branded sneakers, watches, and fragrances. The family has leveraged Trump's political brand and loyal following to expand their portfolio, with the president reporting over $8 million in licensing income in 2024 alone. Spec sheet promises high-end features According to the Trump Organization website, the T1 phone boasts premium features at its sub-$500 price tag. These include a 6.8-inch AMOLED (Active Matrix Organic Light Emitting Diode) display, a 50-megapixel main camera, a 16-megapixel front camera, 12GB of RAM, 256GB of storage (expandable), and a 5,000 mAh battery. The device also includes a headphone jack and an in-display fingerprint sensor, features not available on the latest iPhones. The company claims the T1 will run Android 15 and offer performance on par with top-tier smartphones like Apple’s iPhone 16 Pro Max, which starts at over $1,000. The website also asserts that the mobile plan will use the same coverage as the three nationwide phone service carriers and include a US-based customer support centre. However, several details remain vague, including the identity of the telecom partner enabling the service and the exact specifications of the T1’s processor—a critical component in any modern smartphone. Built in the USA? Experts raise questions Perhaps the most contentious claim surrounding the T1 is its manufacturing origin. A Trump Organization press release states that the device is “proudly designed and built in the United States”, with operations in Alabama, California, and Florida. But industry experts widely dispute the feasibility of this assertion. Building a high-end smartphone entirely within the United States is currently considered impractical, if not impossible, due to the lack of necessary supply chain infrastructure. Most components, including AMOLED displays, high-performance chips, and smartphone-grade cameras, are sourced from Asia, particularly China, Taiwan, South Korea, and Japan. Professor Tinglong Dai of Johns Hopkins University told WSJ that it would take “at least five years” and billions of dollars in investment to build the capabilities necessary to fully manufacture smartphones in the US. He noted that the US currently lacks the factories, workforce skills, and component suppliers needed for end-to-end production. Even Eric Trump admitted during an appearance at Benny Johnson’s podcast, The Benny Show, on June 16 that the first wave of phones may not be built in the US, although he insisted that domestic production was the long-term goal. “Eventually, all the phones can be built in the United States of America,” he said while showcasing the device. Ethical and political implications The rollout of Trump Mobile has reignited longstanding concerns over ethics and conflicts of interest surrounding Trump’s continued business ventures while holding public office. Critics argue that the enterprise could allow companies or individuals seeking influence to curry favour by subscribing to the service or purchasing Trump-branded products. The project raises familiar questions about self-enrichment and the use of presidential power for personal profit. Although The Trump Organization has maintained that the service operates under a licensing agreement and is not directly managed by Donald Trump or his affiliates. The wireless plan’s price—$47.45 per month—is notably higher than comparable offerings from competitors like Mint Mobile ($30/month) and Verizon’s Visible service ($25/month), adding further scrutiny to its value proposition. A niche telecom gamble The US wireless market is dominated by Verizon, AT&T, and T-Mobile, but smaller virtual network operators have carved out niche audiences by renting bandwidth from these carriers. Mint Mobile, for example, was sold to T-Mobile for $1.35 billion in 2023 after attracting a few million subscribers. Whether Trump Mobile can compete remains to be seen, but analysts agree the venture is designed to appeal to Trump’s politically loyal base. The pre-order campaign is already live, promoting patriotic branding, American-made claims, and service aligned with conservative values. As with many of the Trump Organization’s past branded ventures, success may depend less on product specs and more on the enduring commercial power of the Trump name.

New venture expands Trump-branded business empire into telecom, but ‘Made in USA’ claims face skepticism.

Trump Organization launches ‘Trump Mobile’ at $499; but can they actually make it in the US?

As global leaders gather for the G7 summit in Canada, one bilateral meeting is drawing outsized attention between US President Donald Trump and Japanese Prime Minister Shigeru Ishiba.&nbsp;At stake is a potential trade deal that could reshape economic ties between the world’s largest and fourth-largest economies. But with pressure mounting on both sides, the road to an agreement remains fraught.<h2>A handshake, but no breakthrough</h2>On Monday, President Trump and Prime Minister Ishiba met for 30 minutes on the sidelines of the G7 summit in Charlevoix, Alberta, as per the Japanese government. Official images released showed the two leaders smiling, but Tokyo offered no details on the content of their talks.&nbsp;The lack of a public outcome underscores the high stakes and political caution surrounding Japan’s efforts to secure a reprieve from steep US tariffs, especially on automobiles.&nbsp;According to Japan’s Ministry of Finance, the 25 per cent tariffs imposed by Washington in April 2025 now affect nearly $40 billion worth of Japanese car exports to the US—nearly a fifth of Japan’s total exports to America.<h2>No ‘quick fix’, says Ishiba</h2>Ahead of the summit, Prime Minister Ishiba had set the tone for Japan’s position. Speaking in Tokyo on June 12, he declared that Japan would not be rushed into a “quick fix” trade deal.&nbsp;&nbsp;“If there’s progress before I meet the president, that’s in and of itself good,” he said, as quoted by Bloomberg. “But what’s important is to achieve an agreement that’s beneficial to both Japan and the US. We won’t compromise Japan’s interests by prioritising a quick deal.”&nbsp;The remarks reflect Tokyo’s deep concern over the potential economic fallout from the tariffs. Japan’s Ministry of Economy, Trade and Industry (METI) has warned that the levies could push the nation into a technical recession, particularly as industrial output and consumer spending remain subdued following a sluggish first quarter in 2025.<h2>Rising stakes for Ishiba at home</h2>For Prime Minister Ishiba, the stakes are not just economic—but political. He faces a crucial general election next month, and returning from the G7 without a trade resolution could fuel criticism from opposition parties and industry leaders alike.&nbsp;On June 12, Ishiba met with opposition chiefs in Tokyo, describing the trade standoff as a “national crisis” that required bipartisan unity, as reported by Bloomberg. His government is also dispatching top trade negotiator Ryosei Akazawa to North America this week in a last-ditch effort to seek exemptions or adjustments to the tariffs.&nbsp;According to Bloomberg, many G7 leaders are seeking last-minute deals with Trump to prevent additional tariffs scheduled to take effect in July, a tactic widely seen as part of Trump’s broader strategy to extract concessions ahead of his re-election bid.<h2>Tariffs rooted in Trump’s ‘national security’ clause</h2>The current standoff was triggered by Trump’s April executive order, which cited national security concerns to justify sweeping tariffs on automotive imports, particularly from Japan.&nbsp;The move revived fears of a trade war reminiscent of earlier US–China clashes. In 2024 alone, Japanese exports to the US totalled over $135 billion, making America Japan’s second-largest trading partner after China, according to Japan’s Ministry of Finance.&nbsp;“The auto sector is Japan’s backbone,” noted Noriko Hama, professor of economics at Doshisha University, speaking to Nikkei Asia. “A prolonged tariff regime could ripple through employment, production, and consumption. Japan cannot afford to be seen as conceding too much—but nor can it afford a breakdown in US relations.”<h2>G7 backdrop: Global trade on edge</h2>The G7 summit itself has become a crucible for global trade tensions, with EU and Canadian leaders also pressing Trump to roll back tariffs. The Charlevoix summit is officially focused on economic cooperation and supply chain resilience, but trade friction has dominated the closed-door talks.&nbsp;While no formal US–Japan bilateral was announced, both sides signalled openness to further engagement. “We are not going to negotiate under pressure or media spectacle,” a senior Japanese trade official said, speaking to Reuters on condition of anonymity. “We seek a rules-based outcome with mutual respect.”&nbsp;Trump, meanwhile, has remained characteristically bullish. Speaking at the summit, he reiterated his commitment to “fairer deals” and called on partners to “open their markets more fully to American goods,” as quoted by Reuters.<h2>Outlook: Calm, but cautiously tense</h2>Despite the smiles at the G7 photo-op, there is little clarity on when or whether a trade deal will emerge. Analysts suggest that Japan may seek to delay any final agreement until after the July tariff deadline, banking on continued diplomatic engagement or a softening of the US stance.&nbsp;However, the clock is ticking. With domestic industry leaders growing anxious and opposition parties sharpening their attacks, the Ishiba government faces a narrowing window to show results.&nbsp;As the G7 wraps up, one thing is clear that the US–Japan trade ties are entering a volatile new phase, one where economics, diplomacy, and political survival are tightly intertwined. &nbsp;(With inputs from the agencies)&nbsp;

The two leaders met for 30 minutes without achieving a breakthrough, highlighting the complexities of Japan effort to avoid steep US tariffs, especially on automobiles. 

As global leaders gather for the G7 summit in Canada, one bilateral meeting is drawing outsized attention between US President Donald Trump and Japanese Prime Minister Shigeru Ishiba. At stake is a potential trade deal that could reshape economic ties between the world’s largest and fourth-largest economies. But with pressure mounting on both sides, the road to an agreement remains fraught. A handshake, but no breakthrough On Monday, President Trump and Prime Minister Ishiba met for 30 minutes on the sidelines of the G7 summit in Charlevoix, Alberta, as per the Japanese government. Official images released showed the two leaders smiling, but Tokyo offered no details on the content of their talks. The lack of a public outcome underscores the high stakes and political caution surrounding Japan’s efforts to secure a reprieve from steep US tariffs, especially on automobiles. According to Japan’s Ministry of Finance, the 25 per cent tariffs imposed by Washington in April 2025 now affect nearly $40 billion worth of Japanese car exports to the US—nearly a fifth of Japan’s total exports to America. No ‘quick fix’, says Ishiba Ahead of the summit, Prime Minister Ishiba had set the tone for Japan’s position. Speaking in Tokyo on June 12, he declared that Japan would not be rushed into a “quick fix” trade deal. “If there’s progress before I meet the president, that’s in and of itself good,” he said, as quoted by Bloomberg. “But what’s important is to achieve an agreement that’s beneficial to both Japan and the US. We won’t compromise Japan’s interests by prioritising a quick deal.” The remarks reflect Tokyo’s deep concern over the potential economic fallout from the tariffs. Japan’s Ministry of Economy, Trade and Industry (METI) has warned that the levies could push the nation into a technical recession, particularly as industrial output and consumer spending remain subdued following a sluggish first quarter in 2025. Rising stakes for Ishiba at home For Prime Minister Ishiba, the stakes are not just economic—but political. He faces a crucial general election next month, and returning from the G7 without a trade resolution could fuel criticism from opposition parties and industry leaders alike. On June 12, Ishiba met with opposition chiefs in Tokyo, describing the trade standoff as a “national crisis” that required bipartisan unity, as reported by Bloomberg. His government is also dispatching top trade negotiator Ryosei Akazawa to North America this week in a last-ditch effort to seek exemptions or adjustments to the tariffs. According to Bloomberg, many G7 leaders are seeking last-minute deals with Trump to prevent additional tariffs scheduled to take effect in July, a tactic widely seen as part of Trump’s broader strategy to extract concessions ahead of his re-election bid. Tariffs rooted in Trump’s ‘national security’ clause The current standoff was triggered by Trump’s April executive order, which cited national security concerns to justify sweeping tariffs on automotive imports, particularly from Japan. The move revived fears of a trade war reminiscent of earlier US–China clashes. In 2024 alone, Japanese exports to the US totalled over $135 billion, making America Japan’s second-largest trading partner after China, according to Japan’s Ministry of Finance. “The auto sector is Japan’s backbone,” noted Noriko Hama, professor of economics at Doshisha University, speaking to Nikkei Asia. “A prolonged tariff regime could ripple through employment, production, and consumption. Japan cannot afford to be seen as conceding too much—but nor can it afford a breakdown in US relations.” G7 backdrop: Global trade on edge The G7 summit itself has become a crucible for global trade tensions, with EU and Canadian leaders also pressing Trump to roll back tariffs. The Charlevoix summit is officially focused on economic cooperation and supply chain resilience, but trade friction has dominated the closed-door talks. While no formal US–Japan bilateral was announced, both sides signalled openness to further engagement. “We are not going to negotiate under pressure or media spectacle,” a senior Japanese trade official said, speaking to Reuters on condition of anonymity. “We seek a rules-based outcome with mutual respect.” Trump, meanwhile, has remained characteristically bullish. Speaking at the summit, he reiterated his commitment to “fairer deals” and called on partners to “open their markets more fully to American goods,” as quoted by Reuters. Outlook: Calm, but cautiously tense Despite the smiles at the G7 photo-op, there is little clarity on when or whether a trade deal will emerge. Analysts suggest that Japan may seek to delay any final agreement until after the July tariff deadline, banking on continued diplomatic engagement or a softening of the US stance. However, the clock is ticking. With domestic industry leaders growing anxious and opposition parties sharpening their attacks, the Ishiba government faces a narrowing window to show results. As the G7 wraps up, one thing is clear that the US–Japan trade ties are entering a volatile new phase, one where economics, diplomacy, and political survival are tightly intertwined. (With inputs from the agencies)

World leaders at the G7 summit in Canada are focusing on a critical bilateral meeting between US President Donald Trump and Japanese Prime Minister Shigeru Ishiba regarding a potential trade deal impacting their economies.

Japan-US trade tensions escalate at G7: Ishiba holds line as Trump pushes tariff deal

As the US-China trade war deepens, India is rapidly emerging as a significant player in the restructured global trade architecture.&nbsp;Data released by China’s General Administration of Customs on June 10 and India’s Commerce Ministry on June 16 shows a sharp reorientation in international trade routes, with India gaining both as an export destination for Chinese goods and as a key supplier to the United States.While China’s overall exports rose by 4.6 per cent year-on-year in May 2025 to $316.2 billion, its exports to the United States plunged sharply by 34.5 per cent, falling from $44 billion in May 2024 to just $28.8 billion.&nbsp;To offset this decline, China has redirected its export flows toward markets like the European Union (EU) (up 12 per cent to $49.5 billion), ASEAN (Association of Southeast Asian Nations) (up 15 per cent to $58.4 billion), and India (up 12.4 per cent to $11.13 billion).<h2>India’s imports reveal a shift in composition</h2>India’s trade dynamics reflect the spillover effects of this redirection. Though India’s total merchandise imports marginally dropped by 1.8 per cent year-on-year in May—down from $61.7 billion in May 2024 to $60.6 billion this year—the fall was primarily due to lower imports of oil, gold, and diamonds. Excluding these three categories, imports surged 12 per cent, rising from $36.8 billion to $41.2 billion.The fastest-growing import segments were electronics and machinery. Electronics imports jumped 27.5 per cent to $9.1 billion, while imports of machinery and computer-related equipment rose 22 per cent to $5 billion.&nbsp;Much of this increase came from China and Hong Kong, with combined imports from the two rising 22.4 per cent, from $9.8 billion in May 2024 to $12 billion this May.This rise in imports was also reflected in domestic tax collections. India’s Integrated GST (IGST) revenue on imports surged by 72.9 per cent from ₹24,510 crore ($2.85 billion) in May 2024 to ₹42,370 crore ($4.92 billion) this May.&nbsp;As petroleum products are exempt from GST, the increase is largely attributed to higher import volumes of electronics, machinery, and industrial components.<h2>India’s exports to the US gain momentum</h2>India also benefited on the export side, capitalising on the void created by reduced Chinese shipments to the US. Indian exports to the United States rose by 17.3 per cent year-on-year in May 2025, reaching $8.8 billion.&nbsp;A significant portion of this growth came from electronics, particularly smartphones. Overall, India’s merchandise exports dipped slightly from $39.59 billion in May 2024 to $38.73 billion this year but registered a 54.1 per cent increase in electronics exports at $4.57 billion, partially offsetting the decline in other sectors.Engineering goods remained resilient, with a minor decline of 0.8 per cent in May 2025 compared to the previous year. However, cumulative engineering exports for April–May FY26 stood at $19.40 billion, up 4.7 per cent from the same period last year.<h2>A strategic advantage for India?</h2>The US tariff policy under the Trump administration is playing a critical role in the recent evolution in trade patterns. Washington has recently announced a 55 per cent tariff on Chinese goods, although only part of this constitutes new duties. When excluding pre-existing tariffs, the effective new rate is closer to 30 per cent.&nbsp;In contrast, Indian products face a 26 per cent duty at present, with prospects of this falling further under a potential US-India trade deal expected in July.This tariff differential could give Indian exporters a temporary edge over their Chinese competitors in the American market. However, the volatility of US trade policy, where tariff decisions can change rapidly, adds an element of uncertainty for long-term planning.<h2>Geopolitical risks and trade vulnerabilities</h2>Even as India capitalises on trade realignment, risks persist. Geopolitical tensions in West Asia, especially around the Strait of Hormuz, pose threats to energy security and logistics for Indian exporters.&nbsp;Additionally, concerns over potential dumping by Chinese exporters into alternative markets like India are growing, given China’s push to find new outlets amid restricted access to the US.China’s increasing exports to India, combined with its dominance in critical industrial inputs like electronics, machinery, and rare earth magnets, raise alarms over strategic dependence.&nbsp;Chinese restrictions on rare earths, which are essential for electric vehicles and other high-tech industries, have already triggered disruptions in the US, and similar risks loom for India.The May 2025 trade data reflects a global supply chain in flux, with India both benefiting from and adapting to the new order. While India’s rising exports is a promising sign, the nation must remain alert to new vulnerabilities and balance short-term gains with long-term strategic safeguards.

Sharp shifts in trade flows reflect realignment of global supply chains; surge in India’s imports, exports reveals deeper integration.

As the US-China trade war deepens, India is rapidly emerging as a significant player in the restructured global trade architecture. Data released by China’s General Administration of Customs on June 10 and India’s Commerce Ministry on June 16 shows a sharp reorientation in international trade routes, with India gaining both as an export destination for Chinese goods and as a key supplier to the United States. While China’s overall exports rose by 4.6 per cent year-on-year in May 2025 to $316.2 billion, its exports to the United States plunged sharply by 34.5 per cent, falling from $44 billion in May 2024 to just $28.8 billion. To offset this decline, China has redirected its export flows toward markets like the European Union (EU) (up 12 per cent to $49.5 billion), ASEAN (Association of Southeast Asian Nations) (up 15 per cent to $58.4 billion), and India (up 12.4 per cent to $11.13 billion). India’s imports reveal a shift in composition India’s trade dynamics reflect the spillover effects of this redirection. Though India’s total merchandise imports marginally dropped by 1.8 per cent year-on-year in May—down from $61.7 billion in May 2024 to $60.6 billion this year—the fall was primarily due to lower imports of oil, gold, and diamonds. Excluding these three categories, imports surged 12 per cent, rising from $36.8 billion to $41.2 billion. The fastest-growing import segments were electronics and machinery. Electronics imports jumped 27.5 per cent to $9.1 billion, while imports of machinery and computer-related equipment rose 22 per cent to $5 billion. Much of this increase came from China and Hong Kong, with combined imports from the two rising 22.4 per cent, from $9.8 billion in May 2024 to $12 billion this May. This rise in imports was also reflected in domestic tax collections. India’s Integrated GST (IGST) revenue on imports surged by 72.9 per cent from ₹24,510 crore ($2.85 billion) in May 2024 to ₹42,370 crore ($4.92 billion) this May. As petroleum products are exempt from GST, the increase is largely attributed to higher import volumes of electronics, machinery, and industrial components. India’s exports to the US gain momentum India also benefited on the export side, capitalising on the void created by reduced Chinese shipments to the US. Indian exports to the United States rose by 17.3 per cent year-on-year in May 2025, reaching $8.8 billion. A significant portion of this growth came from electronics, particularly smartphones. Overall, India’s merchandise exports dipped slightly from $39.59 billion in May 2024 to $38.73 billion this year but registered a 54.1 per cent increase in electronics exports at $4.57 billion, partially offsetting the decline in other sectors. Engineering goods remained resilient, with a minor decline of 0.8 per cent in May 2025 compared to the previous year. However, cumulative engineering exports for April–May FY26 stood at $19.40 billion, up 4.7 per cent from the same period last year. A strategic advantage for India? The US tariff policy under the Trump administration is playing a critical role in the recent evolution in trade patterns. Washington has recently announced a 55 per cent tariff on Chinese goods, although only part of this constitutes new duties. When excluding pre-existing tariffs, the effective new rate is closer to 30 per cent. In contrast, Indian products face a 26 per cent duty at present, with prospects of this falling further under a potential US-India trade deal expected in July. This tariff differential could give Indian exporters a temporary edge over their Chinese competitors in the American market. However, the volatility of US trade policy, where tariff decisions can change rapidly, adds an element of uncertainty for long-term planning. Geopolitical risks and trade vulnerabilities Even as India capitalises on trade realignment, risks persist. Geopolitical tensions in West Asia, especially around the Strait of Hormuz, pose threats to energy security and logistics for Indian exporters. Additionally, concerns over potential dumping by Chinese exporters into alternative markets like India are growing, given China’s push to find new outlets amid restricted access to the US. China’s increasing exports to India, combined with its dominance in critical industrial inputs like electronics, machinery, and rare earth magnets, raise alarms over strategic dependence. Chinese restrictions on rare earths, which are essential for electric vehicles and other high-tech industries, have already triggered disruptions in the US, and similar risks loom for India. The May 2025 trade data reflects a global supply chain in flux, with India both benefiting from and adapting to the new order. While India’s rising exports is a promising sign, the nation must remain alert to new vulnerabilities and balance short-term gains with long-term strategic safeguards.

Sharp shifts in trade flows reflect realignment of global supply chains; surge in India’s imports, exports reveals deeper integration.

India emerges as trade war beneficiary amid US-China rift

Oil prices jumped sharply on Tuesday as fresh explosions rocked Tehran and tensions soared between Iran and Israel, fuelling fears of a wider regional conflict that could disrupt global energy supplies.&nbsp;Brent crude futures climbed $1.17, or 1.6 per cent, to $74.40 a barrel, while US West Texas Intermediate rose $1.34, or 1.87 per cent, to $73.11 in early trading, both having risen more than 2 per cent earlier in the session, as quoted by Reuters.&nbsp;The spike reverses Monday’s brief decline, when hopes of diplomatic de-escalation flickered after reports suggested Iran was open to ending hostilities. But those hopes evaporated overnight.<h2>Explosions in Tehran, missiles over Tel Aviv</h2>On the fifth day of the intensifying standoff, Iranian media reported explosions and heavy anti-aircraft fire in central Tehran. Air raid sirens also sounded in Tel Aviv as Israel responded to incoming Iranian missiles.&nbsp;The development comes after an Israeli strike hit Iran’s state broadcaster on Monday. Separately, the head of the UN’s nuclear watchdog confirmed significant damage to Iran’s largest uranium enrichment plant, raising fears of further retaliation.&nbsp;Iran is the third-largest oil producer in the Organisation of the Petroleum Exporting Countries (OPEC), and any military escalation could severely affect its crude output.<h2>Trump: ‘Evacuate everyone’ from Tehran</h2>Speaking to reporters on Monday night, US President Donald Trump said the situation was “extremely dangerous” and warned, “Everyone should evacuate Tehran immediately.” He added that Iran had missed a chance to strike a nuclear deal with Washington before hostilities began, but suggested Tehran may now be reconsidering.&nbsp;“If they had signed the deal, we wouldn’t be here,” Trump said. “But they didn’t. And now they want to.”&nbsp;Trump also hinted that easing US sanctions could still be on the table, potentially allowing Iran to ramp up oil exports. Such a scenario would normally put downward pressure on oil prices, but for now, traders are focused on immediate supply disruptions.<h2>OPEC+ sees slowing growth in US oil supply</h2>Meanwhile, OPEC and its allies, including Russia, collectively known as OPEC+, said on Monday they expect the global economy to remain “resilient” through the second half of 2025. However, the bloc trimmed its 2026 forecast for oil supply growth from non-OPEC+ producers such as the US and Brazil.&nbsp;The group, which accounts for nearly half the world’s oil output, is closely monitoring the Iran–Israel crisis for signs of a prolonged shock to Middle Eastern production flows.<h2>Market outlook: Volatility ahead</h2>Energy analysts warn that oil prices could rise sharply if fighting spreads or damages critical infrastructure in the Gulf. Iran controls key access points to the Strait of Hormuz, a chokepoint through which nearly one-fifth of global oil flows.&nbsp;“Any direct damage to Iranian oil facilities, or attempts to block the Strait, would be a red line for the global market,” said an analyst quoted by Reuters.&nbsp;With the US presidential election looming and the Middle East on edge, the oil market is once again at the mercy of geopolitics, setting the stage for more volatility in the weeks ahead.&nbsp;(With inputs from the agencies) &nbsp;

US President Donald Trump warned everyone to evacuate Tehran immediately and suggested Iran may reconsider signing a nuclear deal with Washington. 

Oil prices jumped sharply on Tuesday as fresh explosions rocked Tehran and tensions soared between Iran and Israel, fuelling fears of a wider regional conflict that could disrupt global energy supplies. Brent crude futures climbed $1.17, or 1.6 per cent, to $74.40 a barrel, while US West Texas Intermediate rose $1.34, or 1.87 per cent, to $73.11 in early trading, both having risen more than 2 per cent earlier in the session, as quoted by Reuters. The spike reverses Monday’s brief decline, when hopes of diplomatic de-escalation flickered after reports suggested Iran was open to ending hostilities. But those hopes evaporated overnight. Explosions in Tehran, missiles over Tel Aviv On the fifth day of the intensifying standoff, Iranian media reported explosions and heavy anti-aircraft fire in central Tehran. Air raid sirens also sounded in Tel Aviv as Israel responded to incoming Iranian missiles. The development comes after an Israeli strike hit Iran’s state broadcaster on Monday. Separately, the head of the UN’s nuclear watchdog confirmed significant damage to Iran’s largest uranium enrichment plant, raising fears of further retaliation. Iran is the third-largest oil producer in the Organisation of the Petroleum Exporting Countries (OPEC), and any military escalation could severely affect its crude output. Trump: ‘Evacuate everyone’ from Tehran Speaking to reporters on Monday night, US President Donald Trump said the situation was “extremely dangerous” and warned, “Everyone should evacuate Tehran immediately.” He added that Iran had missed a chance to strike a nuclear deal with Washington before hostilities began, but suggested Tehran may now be reconsidering. “If they had signed the deal, we wouldn’t be here,” Trump said. “But they didn’t. And now they want to.” Trump also hinted that easing US sanctions could still be on the table, potentially allowing Iran to ramp up oil exports. Such a scenario would normally put downward pressure on oil prices, but for now, traders are focused on immediate supply disruptions. OPEC+ sees slowing growth in US oil supply Meanwhile, OPEC and its allies, including Russia, collectively known as OPEC+, said on Monday they expect the global economy to remain “resilient” through the second half of 2025. However, the bloc trimmed its 2026 forecast for oil supply growth from non-OPEC+ producers such as the US and Brazil. The group, which accounts for nearly half the world’s oil output, is closely monitoring the Iran–Israel crisis for signs of a prolonged shock to Middle Eastern production flows. Market outlook: Volatility ahead Energy analysts warn that oil prices could rise sharply if fighting spreads or damages critical infrastructure in the Gulf. Iran controls key access points to the Strait of Hormuz, a chokepoint through which nearly one-fifth of global oil flows. “Any direct damage to Iranian oil facilities, or attempts to block the Strait, would be a red line for the global market,” said an analyst quoted by Reuters. With the US presidential election looming and the Middle East on edge, the oil market is once again at the mercy of geopolitics, setting the stage for more volatility in the weeks ahead. (With inputs from the agencies)

Oil prices surged on Tuesday due to fresh explosions in Tehran and increased tensions between Iran and Israel.&nbsp;

Oil prices climb amid Iran–Israel escalation, Trump issues evacuation warning

US President Donald Trump and UK Prime Minister Keir Starmer have signed off on a long-awaited trade agreement covering aerospace and automobiles but left the future of British steel exports unresolved.&nbsp;The deal was inked on the sidelines of the G7 summit in the Canadian Rockies on Monday. It marks the first bilateral trade pact under Trump’s second term, a pact both leaders hailed as a “sign of strength.”&nbsp;But beyond the smiles and handshakes, the agreement falls short of finality. While Trump declared, “We just signed it, and it’s done,” critical sectors like steel and pharmaceuticals remain mired in negotiations.<h2>Aerospace and autos win big</h2>Under the agreement, the UK aerospace sector will now face zero tariffs from the United States. This is a major victory for British manufacturers like Rolls-Royce, who were facing a proposed 10 per cent levy on exports.&nbsp;The UK auto industry also benefits. Tariffs on British-made cars will drop from 27.5 per cent to 10 per cent, but only for up to 100,000 vehicles per year. Exports above this quota will still be subject to steep US tariffs, as per the UK’s Department for Business and Trade, quoted by Associated Press.&nbsp;&nbsp;“This is a real sign of strength,” Starmer told reporters. “It’s a good day for both our countries.”President Trump praised the agreement too, saying, “The UK is very well protected… because I like them,” as reported by Reuters.<h2>Steel industry in limbo</h2>The most contentious issue, tariffs on British steel and aluminium remains unresolved. Trump had earlier threatened to raise global tariffs to 50 per cent but has kept UK rates at 25 per cent for now.The British government maintains that the plan is still for “0 per cent tariffs on core steel products as agreed,” but Trump’s executive order, issued Monday, introduced uncertainty.&nbsp;The US Commerce Department will now determine the volume of UK steel eligible for tariff-free access. A key sticking point is US concern over Chinese ownership of UK plants—specifically the Jingye Group’s stake in British Steel, as reported by Reuters.&nbsp;The UK had taken control of British Steel in April to prevent a shutdown of the Scunthorpe facility, but Washington still wants assurances that Chinese entities are not using the UK as a backdoor to evade US tariffs.<h2>Trump’s confusion, Starmer’s relief</h2>In a chaotic moment at the summit, Trump mistakenly said the trade agreement was with the European Union, not the UK. “We have our trade agreement with the European Union,” he told reporters, before quickly correcting himself. The slip-up did little to dampen the UK’s sense of diplomatic achievement.&nbsp;For Downing Street, the finalisation of even a partial deal counts as a symbolic win, especially on the global stage. The aerospace sector, one of Britain’s highest-value export industries, now enjoys tariff-free access to the US market.&nbsp;“This deal protects jobs and livelihoods in some of our most vital sectors,” UK Trade Secretary Jonathan Reynolds said. Mike Hawes, CEO of the Society of Motor Manufacturers and Traders, called it “great news” for the auto sector.<h2>What’s in the deal?</h2>The agreement removes all US tariffs on UK aerospace exports and imposes a 10 per cent cap on up to 100,000 British car exports annually. It also allows 13,000 metric tonnes of beef to be traded between both countries each year, though the UK will maintain its ban on hormone-treated US beef. Other areas, including steel, aluminium, digital services, and pharmaceuticals, remain under negotiation.&nbsp;The US administration also stressed that any future tariff exemptions will depend on security assurances and transparent ownership across UK supply chains, particularly in sensitive sectors like metals and healthcare.&nbsp;Monday’s signing was less a breakthrough and more a checkpoint. The framework first announced in May had left British businesses uncertain, especially after Trump doubled global metals tariffs earlier this month. The UK was spared that hike, but the reprieve may be temporary.&nbsp;While aerospace and auto manufacturers now have clarity, steel producers remain in limbo. And with Trump’s nationalist rhetoric intensifying ahead of the November election, the durability of this deal is far from guaranteed.&nbsp;More rounds of negotiation are expected in the weeks ahead, but for now, Trump’s personal diplomacy and Starmer’s soft-spoken strategy have delivered a limited, but politically symbolic win. &nbsp;(With inputs from the agencies) &nbsp;

 While Trump declared, “We just signed it, and it’s done,” critical sectors like steel and pharmaceuticals remain mired in negotiations.

US President Donald Trump and UK Prime Minister Keir Starmer have signed off on a long-awaited trade agreement covering aerospace and automobiles but left the future of British steel exports unresolved. The deal was inked on the sidelines of the G7 summit in the Canadian Rockies on Monday. It marks the first bilateral trade pact under Trump’s second term, a pact both leaders hailed as a “sign of strength.” But beyond the smiles and handshakes, the agreement falls short of finality. While Trump declared, “We just signed it, and it’s done,” critical sectors like steel and pharmaceuticals remain mired in negotiations. Aerospace and autos win big Under the agreement, the UK aerospace sector will now face zero tariffs from the United States. This is a major victory for British manufacturers like Rolls-Royce, who were facing a proposed 10 per cent levy on exports. The UK auto industry also benefits. Tariffs on British-made cars will drop from 27.5 per cent to 10 per cent, but only for up to 100,000 vehicles per year. Exports above this quota will still be subject to steep US tariffs, as per the UK’s Department for Business and Trade, quoted by Associated Press. “This is a real sign of strength,” Starmer told reporters. “It’s a good day for both our countries.” President Trump praised the agreement too, saying, “The UK is very well protected… because I like them,” as reported by Reuters. Steel industry in limbo The most contentious issue, tariffs on British steel and aluminium remains unresolved. Trump had earlier threatened to raise global tariffs to 50 per cent but has kept UK rates at 25 per cent for now. The British government maintains that the plan is still for “0 per cent tariffs on core steel products as agreed,” but Trump’s executive order, issued Monday, introduced uncertainty. The US Commerce Department will now determine the volume of UK steel eligible for tariff-free access. A key sticking point is US concern over Chinese ownership of UK plants—specifically the Jingye Group’s stake in British Steel, as reported by Reuters. The UK had taken control of British Steel in April to prevent a shutdown of the Scunthorpe facility, but Washington still wants assurances that Chinese entities are not using the UK as a backdoor to evade US tariffs. Trump’s confusion, Starmer’s relief In a chaotic moment at the summit, Trump mistakenly said the trade agreement was with the European Union, not the UK. “We have our trade agreement with the European Union,” he told reporters, before quickly correcting himself. The slip-up did little to dampen the UK’s sense of diplomatic achievement. For Downing Street, the finalisation of even a partial deal counts as a symbolic win, especially on the global stage. The aerospace sector, one of Britain’s highest-value export industries, now enjoys tariff-free access to the US market. “This deal protects jobs and livelihoods in some of our most vital sectors,” UK Trade Secretary Jonathan Reynolds said. Mike Hawes, CEO of the Society of Motor Manufacturers and Traders, called it “great news” for the auto sector. What’s in the deal? The agreement removes all US tariffs on UK aerospace exports and imposes a 10 per cent cap on up to 100,000 British car exports annually. It also allows 13,000 metric tonnes of beef to be traded between both countries each year, though the UK will maintain its ban on hormone-treated US beef. Other areas, including steel, aluminium, digital services, and pharmaceuticals, remain under negotiation. The US administration also stressed that any future tariff exemptions will depend on security assurances and transparent ownership across UK supply chains, particularly in sensitive sectors like metals and healthcare. Monday’s signing was less a breakthrough and more a checkpoint. The framework first announced in May had left British businesses uncertain, especially after Trump doubled global metals tariffs earlier this month. The UK was spared that hike, but the reprieve may be temporary. While aerospace and auto manufacturers now have clarity, steel producers remain in limbo. And with Trump’s nationalist rhetoric intensifying ahead of the November election, the durability of this deal is far from guaranteed. More rounds of negotiation are expected in the weeks ahead, but for now, Trump’s personal diplomacy and Starmer’s soft-spoken strategy have delivered a limited, but politically symbolic win. (With inputs from the agencies)

US and UK sign trade pact easing tariffs on aerospace and cars, but British steel exports remain in limbo amid ongoing negotiations and political tensions.

Trump signs US–UK trade deal at G7, says Britain ‘protected because I like them’

Meta has officially confirmed its first major monetisation move for WhatsApp: the platform will begin showing advertisements in the Status and Channels sections, alongside offering optional paid subscriptions to enhance discovery and reach.&nbsp;&nbsp;The update, unveiled on June 16, marks a significant shift for WhatsApp, which has long resisted traditional advertising.&nbsp;Since its acquisition by Meta in 2014, WhatsApp has largely steered clear of traditional advertising formats, in contrast to sister platforms like Facebook and Instagram.&nbsp;While private messages will remain ad-free and encrypted, users may start seeing ads as they tap through Status updates — WhatsApp’s equivalent of Instagram Stories — and in public Channels. Businesses and creators who opt for the subscription model will gain visibility advantages in search and recommendations.&nbsp;Meta says the step is designed to help creators and brands grow, and provide users with better discovery tools. The company plans to roll out these features gradually across select markets.&nbsp;In a select media briefing, the company said that for users who only use WhatsApp to chat with friends and family, there will be no change. To show ads in Status and Channels, the platform will share minimal information such as the user’s country or city, language, and the Channels they follow.&nbsp;Alice Newton-Rex, Vice-President, Product at WhatsApp, said the platform will never share or sell users’ phone numbers to advertisers. Personal messages, calls and group conversations will continue to be encrypted.&nbsp;“We are increasingly seeing and hearing people wanting to use WhatsApp for more than just messaging close friends and family. That’s part of the reason we introduced the ‘Updates’ tab as a place for optional experiences on WhatsApp like Channels and Status. Almost 1.5 billion people globally use Updates daily. It’s often where people go when they are looking to discover something new,” said Newton-Rex. The new features will roll out gradually over the next few months.&nbsp;WhatsApp stressed that messages, calls, and groups will remain end-to-end encrypted, maintaining the platform’s core privacy proposition.

Meta turns to WhatsApp for revenue, introduces ads and premium features. All you need to know

Meta has officially confirmed its first major monetisation move for WhatsApp: the platform will begin showing advertisements in the Status and Channels sections, alongside offering optional paid subscriptions to enhance discovery and reach. The update, unveiled on June 16, marks a significant shift for WhatsApp, which has long resisted traditional advertising. Since its acquisition by Meta in 2014, WhatsApp has largely steered clear of traditional advertising formats, in contrast to sister platforms like Facebook and Instagram. While private messages will remain ad-free and encrypted, users may start seeing ads as they tap through Status updates — WhatsApp’s equivalent of Instagram Stories — and in public Channels. Businesses and creators who opt for the subscription model will gain visibility advantages in search and recommendations. Meta says the step is designed to help creators and brands grow, and provide users with better discovery tools. The company plans to roll out these features gradually across select markets. In a select media briefing, the company said that for users who only use WhatsApp to chat with friends and family, there will be no change. To show ads in Status and Channels, the platform will share minimal information such as the user’s country or city, language, and the Channels they follow. Alice Newton-Rex, Vice-President, Product at WhatsApp, said the platform will never share or sell users’ phone numbers to advertisers. Personal messages, calls and group conversations will continue to be encrypted. “We are increasingly seeing and hearing people wanting to use WhatsApp for more than just messaging close friends and family. That’s part of the reason we introduced the ‘Updates’ tab as a place for optional experiences on WhatsApp like Channels and Status. Almost 1.5 billion people globally use Updates daily. It’s often where people go when they are looking to discover something new,” said Newton-Rex. The new features will roll out gradually over the next few months. WhatsApp stressed that messages, calls, and groups will remain end-to-end encrypted, maintaining the platform’s core privacy proposition.

The Meta-owned messaging service will begin rolling out new monetisation tools within its Updates tab

At the 2025 Paris Air Show, AviLease, a global aircraft leasing firm based in Saudi Arabia, made a major move to expand its fleet with an order for 10 Airbus A350 freighters and 30 A320neo Family aircraft.&nbsp;The deal, valued at approximately $3.5 billion, marks a significant step for the leasing company, with the possibility of expanding to 22 A350 freighters and 55 A320neo aircraft in the future.<h2>Strategic partnership with Airbus</h2>AviLease’s commitment to acquiring state-of-the-art aircraft highlights its strategy of offering modern, fuel-efficient solutions to airlines worldwide. The partnership with Airbus is expected to further enhance AviLease’s position as a leading, full-service, investment-grade lessor.“We are proud to establish an Airbus order book,” said Edward O’Byrne, CEO of AviLease. “The addition of these aircraft strengthens our ability to provide fuel-efficient fleet solutions to our airline partners in Saudi Arabia and globally.”Airbus, for its part, expressed satisfaction in securing the order, with Benoît de Saint-Exupéry, Executive Vice President of Airbus Commercial Aircraft, noting the strong appeal of the A350 freighter and the A320neo Family, which continues to dominate the global market for single-aisle aircraft.<h2>The A350 freighter: A game changer in air cargo</h2>The A350F freighter, a key element in AviLease’s order, promises to set new benchmarks in air cargo operations. Offering a 20% reduction in fuel burn, improved loading capacity, and extended range, the A350F is designed with advanced materials to reduce weight and meet future environmental standards.&nbsp;The aircraft is also the only freighter capable of fully meeting the ICAO’s enhanced CO₂ emissions standards, set to come into effect in 2027.<h2>A320neo: Fuel efficiency meets high demand</h2>The A320neo, already the world’s best-selling single-aisle aircraft, incorporates next-generation engines, Sharklets, and advanced cabin efficiencies, together delivering up to 20% fuel savings. This makes the A320neo a popular choice for lessors like AviLease looking to provide efficient, cost-effective solutions to airlines globally.<h2>Riyadh Air’s bold step with Airbus A350-1000</h2>In a related development, Riyadh Air, a Saudi carrier backed by the Public Investment Fund (PIF), also made headlines at the Paris Air Show with a massive order for 25 Airbus A350-1000 aircraft. This order, which could extend to 50 aircraft, underscores the airline’s ambition to become a key global player under Saudi Arabia’s Vision 2030.&nbsp;The A350-1000, known for its efficiency and long-range capabilities, will be a cornerstone of Riyadh Air’s strategy to offer premium international services and further solidify Saudi Arabia’s position as a global aviation hub.<h2>Global market impact and future orders</h2>The success of both AviLease and Riyadh Air’s agreements highlights the growing confidence in Airbus's latest-generation aircraft. The Airbus A350 Family has now garnered over 1,390 orders worldwide, cementing its position as a key player in the long-haul and air cargo markets.Beyond the major orders from Saudi Arabia, Airbus is reportedly nearing additional agreements, including a potential deal with LOT Polish Airlines for 40 A220s and a possible order from AirAsia. These moves further demonstrate the robust demand for modern, fuel-efficient aircraft in the face of rising global air travel.

The partnership with Airbus is expected to further enhance AviLease’s position as a leading, full-service, investment-grade lessor.

At the 2025 Paris Air Show, AviLease, a global aircraft leasing firm based in Saudi Arabia, made a major move to expand its fleet with an order for 10 Airbus A350 freighters and 30 A320neo Family aircraft. The deal, valued at approximately $3.5 billion, marks a significant step for the leasing company, with the possibility of expanding to 22 A350 freighters and 55 A320neo aircraft in the future. Strategic partnership with Airbus AviLease’s commitment to acquiring state-of-the-art aircraft highlights its strategy of offering modern, fuel-efficient solutions to airlines worldwide. The partnership with Airbus is expected to further enhance AviLease’s position as a leading, full-service, investment-grade lessor. “We are proud to establish an Airbus order book,” said Edward O’Byrne, CEO of AviLease. “The addition of these aircraft strengthens our ability to provide fuel-efficient fleet solutions to our airline partners in Saudi Arabia and globally.” Airbus, for its part, expressed satisfaction in securing the order, with Benoît de Saint-Exupéry, Executive Vice President of Airbus Commercial Aircraft, noting the strong appeal of the A350 freighter and the A320neo Family, which continues to dominate the global market for single-aisle aircraft. The A350 freighter: A game changer in air cargo The A350F freighter, a key element in AviLease’s order, promises to set new benchmarks in air cargo operations. Offering a 20% reduction in fuel burn, improved loading capacity, and extended range, the A350F is designed with advanced materials to reduce weight and meet future environmental standards. The aircraft is also the only freighter capable of fully meeting the ICAO’s enhanced CO₂ emissions standards, set to come into effect in 2027. A320neo: Fuel efficiency meets high demand The A320neo, already the world’s best-selling single-aisle aircraft, incorporates next-generation engines, Sharklets, and advanced cabin efficiencies, together delivering up to 20% fuel savings. This makes the A320neo a popular choice for lessors like AviLease looking to provide efficient, cost-effective solutions to airlines globally. Riyadh Air’s bold step with Airbus A350-1000 In a related development, Riyadh Air, a Saudi carrier backed by the Public Investment Fund (PIF), also made headlines at the Paris Air Show with a massive order for 25 Airbus A350-1000 aircraft. This order, which could extend to 50 aircraft, underscores the airline’s ambition to become a key global player under Saudi Arabia’s Vision 2030. The A350-1000, known for its efficiency and long-range capabilities, will be a cornerstone of Riyadh Air’s strategy to offer premium international services and further solidify Saudi Arabia’s position as a global aviation hub. Global market impact and future orders The success of both AviLease and Riyadh Air’s agreements highlights the growing confidence in Airbus's latest-generation aircraft. The Airbus A350 Family has now garnered over 1,390 orders worldwide, cementing its position as a key player in the long-haul and air cargo markets. Beyond the major orders from Saudi Arabia, Airbus is reportedly nearing additional agreements, including a potential deal with LOT Polish Airlines for 40 A220s and a possible order from AirAsia. These moves further demonstrate the robust demand for modern, fuel-efficient aircraft in the face of rising global air travel.

The partnership with Airbus is expected to further enhance AviLease’s position as a leading, full-service, investment-grade lessor.

AviLease strengthens global fleet with $3.5 billion Airbus order

India’s wholesale inflation, as measured by the Wholesale Price Index (WPI), dropped to a 14-month low of 0.39 per cent in May 2025, down from 0.85 per cent in April, according to data released by the Ministry of Commerce and Industry on June 16.&nbsp;This marks the third consecutive month of declining wholesale inflation, primarily driven by slowing demand and moderating food prices, with prices of key kitchen staples such as vegetables, pulses, and potatoes falling sharply.<h2>Food prices lead the decline</h2>The significant deceleration in food inflation was the major factor contributing to the decline in overall WPI. Food inflation fell to 1.72 per cent in May, down from 2.55 per cent in April. This was largely due to a sharp decline in vegetable prices, which contracted by 21.62 per cent compared to 18.26 per cent in the previous month.&nbsp;Other food items such as onions and potatoes also saw considerable price reductions, with onion inflation easing to 14.41 per cent in May from 0.20 per cent in April and potato inflation plunging by 29.42 per cent. This is indicative of easing demand pressures, rather than supply shortages or disruptions.Notably, protein-rich food items like eggs, meat, and fish saw a price decline of 1.01 per cent, marking the second consecutive month of deflation in this category. However, the prices of fruits (up 10.17 per cent) and milk (up 2.66 per cent) continued to rise, pointing to mixed trends within the broader food category.<h2>Fuel and power prices continue to fall</h2>The fuel and power segment, which has a significant impact on inflation, also saw a continued fall in prices. Fuel and power inflation contracted by 2.27 per cent in May, slightly worse than the 2.18 per cent drop in April.&nbsp;The decline was largely driven by lower mineral oil prices, with petrol prices falling by 8.5 per cent and high-speed diesel prices by 5.61 per cent. However, the price of cooking gas rose by 0.25 per cent, reflecting volatility in global energy markets.<h2>Manufactured products show slower price growth</h2>Inflation in manufactured products, which makes up the largest portion of the WPI basket, slowed to 2.04 per cent in May from 2.62 per cent in April. The deceleration in this category is further evidence of softening demand across the economy.&nbsp;Key categories such as food products, basic metals, rubber and plastics, and chemical products saw price reductions, while certain sectors, including pharmaceuticals, electronics, and textiles, recorded price increases.<h2>Declining inflation reflects weak demand</h2>The overall trend of falling wholesale inflation can be attributed to weakening demand across key sectors, rather than any major supply disruptions or shortages. This is evident from the broader cooling seen in both food and non-food items.&nbsp;While inflation in primary articles declined by 2.02 per cent year-on-year, the deceleration in prices was not driven by any major disruptions in supply chains but rather by weaker demand pressures.This cooling in wholesale inflation follows the same trend seen in retail inflation, which eased to a 75-month low of 2.82 per cent in May, largely due to the decline in food prices. With inflation remaining subdued, the Reserve Bank of India (RBI) has room to continue its accommodative monetary policy.&nbsp;In fact, the RBI’s Monetary Policy Committee (MPC) recently cut the repo rate by 50 basis points to 5.5 per cent, signalling that it expects the low inflation environment to persist.<h2>RBI’s outlook and future expectations</h2>The cooling of both wholesale and retail inflation suggests that the RBI could take further steps to ease monetary policy in the second half of 2025, supporting economic growth while keeping inflation under control.&nbsp;The central bank has already lowered its inflation forecast for FY26 to 3.7 per cent, from an earlier projection of 4 per cent, in light of the ongoing disinflationary trends.Economists also point out that as food inflation continues to ease, the country may see further benefits from a favourable monsoon season and improved agricultural output. However, risks remain in the form of global volatility and unpredictable weather patterns, which could affect inflation trends in the coming months.The latest WPI data underscores a broader trend of falling inflation driven by slowing demand rather than supply-side factors. With food prices and fuel costs continuing their decline, India’s wholesale inflation outlook remains subdued, providing the RBI with the flexibility to maintain its policy stance and support economic recovery in the months ahead.

This is the third consecutive month of declining wholesale inflation, primarily driven by slowing demand and moderating food prices, with prices of key kitchen staples such as vegetables, pulses, and potatoes falling sharply.

India’s wholesale inflation, as measured by the Wholesale Price Index (WPI), dropped to a 14-month low of 0.39 per cent in May 2025, down from 0.85 per cent in April, according to data released by the Ministry of Commerce and Industry on June 16. This marks the third consecutive month of declining wholesale inflation, primarily driven by slowing demand and moderating food prices, with prices of key kitchen staples such as vegetables, pulses, and potatoes falling sharply. Food prices lead the decline The significant deceleration in food inflation was the major factor contributing to the decline in overall WPI. Food inflation fell to 1.72 per cent in May, down from 2.55 per cent in April. This was largely due to a sharp decline in vegetable prices, which contracted by 21.62 per cent compared to 18.26 per cent in the previous month. Other food items such as onions and potatoes also saw considerable price reductions, with onion inflation easing to 14.41 per cent in May from 0.20 per cent in April and potato inflation plunging by 29.42 per cent. This is indicative of easing demand pressures, rather than supply shortages or disruptions. Notably, protein-rich food items like eggs, meat, and fish saw a price decline of 1.01 per cent, marking the second consecutive month of deflation in this category. However, the prices of fruits (up 10.17 per cent) and milk (up 2.66 per cent) continued to rise, pointing to mixed trends within the broader food category. Fuel and power prices continue to fall The fuel and power segment, which has a significant impact on inflation, also saw a continued fall in prices. Fuel and power inflation contracted by 2.27 per cent in May, slightly worse than the 2.18 per cent drop in April. The decline was largely driven by lower mineral oil prices, with petrol prices falling by 8.5 per cent and high-speed diesel prices by 5.61 per cent. However, the price of cooking gas rose by 0.25 per cent, reflecting volatility in global energy markets. Manufactured products show slower price growth Inflation in manufactured products, which makes up the largest portion of the WPI basket, slowed to 2.04 per cent in May from 2.62 per cent in April. The deceleration in this category is further evidence of softening demand across the economy. Key categories such as food products, basic metals, rubber and plastics, and chemical products saw price reductions, while certain sectors, including pharmaceuticals, electronics, and textiles, recorded price increases. Declining inflation reflects weak demand The overall trend of falling wholesale inflation can be attributed to weakening demand across key sectors, rather than any major supply disruptions or shortages. This is evident from the broader cooling seen in both food and non-food items. While inflation in primary articles declined by 2.02 per cent year-on-year, the deceleration in prices was not driven by any major disruptions in supply chains but rather by weaker demand pressures. This cooling in wholesale inflation follows the same trend seen in retail inflation, which eased to a 75-month low of 2.82 per cent in May, largely due to the decline in food prices. With inflation remaining subdued, the Reserve Bank of India (RBI) has room to continue its accommodative monetary policy. In fact, the RBI’s Monetary Policy Committee (MPC) recently cut the repo rate by 50 basis points to 5.5 per cent, signalling that it expects the low inflation environment to persist. RBI’s outlook and future expectations The cooling of both wholesale and retail inflation suggests that the RBI could take further steps to ease monetary policy in the second half of 2025, supporting economic growth while keeping inflation under control. The central bank has already lowered its inflation forecast for FY26 to 3.7 per cent, from an earlier projection of 4 per cent, in light of the ongoing disinflationary trends. Economists also point out that as food inflation continues to ease, the country may see further benefits from a favourable monsoon season and improved agricultural output. However, risks remain in the form of global volatility and unpredictable weather patterns, which could affect inflation trends in the coming months. The latest WPI data underscores a broader trend of falling inflation driven by slowing demand rather than supply-side factors. With food prices and fuel costs continuing their decline, India’s wholesale inflation outlook remains subdued, providing the RBI with the flexibility to maintain its policy stance and support economic recovery in the months ahead.

This is the third consecutive month of declining wholesale inflation, primarily driven by slowing demand and moderating food prices, with prices of key kitchen staples such as vegetables, pulses, and potatoes falling sharply.

India’s wholesale inflation eases to 14-month low in May, driven by slowing demand

The Indian rupee is under considerable pressure as tensions in West Asia escalate, particularly with the ongoing Israel-Iran conflict. This has led to a surge in global crude oil prices, which are now trading above $83 per barrel. As India is a major oil importer, rising oil prices directly affect the rupee’s value and exacerbate inflation concerns.In early trade on June 16, the rupee fell 6 paise to 86.17 against the US dollar, reflecting the broader market’s reaction to the geopolitical turmoil. Analysts attribute the rupee’s decline to not just the rising oil prices but also to a strong US dollar and outflows from foreign institutional investors (FIIs).&nbsp;The geopolitical uncertainties, combined with the surge in oil prices, are putting further pressure on India’s currency, which had already been struggling due to global economic factors.<h2>Crude prices: A key factor for the rupee</h2>The sharp rise in crude oil prices, driven by escalating tensions in West Asia, has become a major concern for the Indian economy. Oil prices surged nearly 13 per cent in a short span, and this is having a direct impact on the Indian rupee, a currency that is particularly vulnerable to fluctuations in oil prices due to India’s reliance on crude imports.Kranthi Bathini, equity strategist at WealthMills Securities, told Moneycontrol that a sustained rise in oil prices could disrupt India’s inflation trajectory, which had recently been helped by a six-year low in consumer price inflation (CPI) at 2.8 per cent in May.&nbsp;A surge in oil prices could cause inflation to pick up again, forcing the Reserve Bank of India (RBI) to reassess its accommodative stance on interest rates. A more hawkish RBI stance could further weigh on the rupee, making it more expensive for importers and affecting India’s trade balance.<h2>Forex reserves provide some cushion</h2>Despite the rupee’s decline, there is some positive news. India’s foreign exchange reserves increased by $5.17 billion, reaching $696.65 billion for the week ending June 6.&nbsp;This rise in reserves provides a cushion for the rupee and could help the RBI manage the currency’s volatility in the short term. However, the overall outlook for the rupee remains cautious, with the geopolitical situation adding to the uncertainty.The RBI's ability to manage forex reserves effectively will be crucial if the tensions in the region persist and oil prices continue to rise. Analysts suggest that while the reserves offer some stability, India’s heavy dependence on oil imports means that any sustained spike in crude prices could be problematic for the rupee.<h2>Long-term outlook for the rupee and Indian markets</h2>Looking ahead, analysts remain cautiously optimistic about the rupee’s recovery in the medium term. Some expect the rupee to strengthen to 84 against the dollar by the October-December quarter, citing low domestic inflation and a manageable trade deficit. However, much of this outlook depends on how the geopolitical situation evolves and the movement of crude prices in the coming weeks.The current volatility in the rupee, triggered by the Israel-Iran conflict and the surge in oil prices, has led to a wait-and-watch approach from investors.&nbsp;Bathini told Moneycontrol that the market is adopting a cautious stance amid the uncertainty, with a particular focus on how crude prices will impact India’s inflation and economic growth. A sustained rise in oil prices could push inflation higher, forcing the RBI to adjust its policies.Despite the short-term challenges, Indian equities could offer opportunities for long-term investors if the rupee stabilises and geopolitical tensions subside.&nbsp;Some sectors, such as defence, infrastructure, and banking, are still seen as attractive due to their growth potential, regardless of the current market volatility. Bathini believes that any correction in the markets, triggered by the ongoing geopolitical risks, could present a good entry point for medium- to long-term investors.While the rupee faces pressure in the short term due to rising oil prices and geopolitical instability, the Indian economy’s fundamentals and forex reserves provide some resilience. Investors are advised to monitor the evolving geopolitical situation closely, as it will be key to determining the rupee’s trajectory in the coming months.

In early trade on June 16, the rupee fell 6 paise to 86.17 against the US dollar, reflecting the broader market’s reaction to the geopolitical turmoil.

The Indian rupee is under considerable pressure as tensions in West Asia escalate, particularly with the ongoing Israel-Iran conflict. This has led to a surge in global crude oil prices, which are now trading above $83 per barrel. As India is a major oil importer, rising oil prices directly affect the rupee’s value and exacerbate inflation concerns. In early trade on June 16, the rupee fell 6 paise to 86.17 against the US dollar, reflecting the broader market’s reaction to the geopolitical turmoil. Analysts attribute the rupee’s decline to not just the rising oil prices but also to a strong US dollar and outflows from foreign institutional investors (FIIs). The geopolitical uncertainties, combined with the surge in oil prices, are putting further pressure on India’s currency, which had already been struggling due to global economic factors. Crude prices: A key factor for the rupee The sharp rise in crude oil prices, driven by escalating tensions in West Asia, has become a major concern for the Indian economy. Oil prices surged nearly 13 per cent in a short span, and this is having a direct impact on the Indian rupee, a currency that is particularly vulnerable to fluctuations in oil prices due to India’s reliance on crude imports. Kranthi Bathini, equity strategist at WealthMills Securities, told Moneycontrol that a sustained rise in oil prices could disrupt India’s inflation trajectory, which had recently been helped by a six-year low in consumer price inflation (CPI) at 2.8 per cent in May. A surge in oil prices could cause inflation to pick up again, forcing the Reserve Bank of India (RBI) to reassess its accommodative stance on interest rates. A more hawkish RBI stance could further weigh on the rupee, making it more expensive for importers and affecting India’s trade balance. Forex reserves provide some cushion Despite the rupee’s decline, there is some positive news. India’s foreign exchange reserves increased by $5.17 billion, reaching $696.65 billion for the week ending June 6. This rise in reserves provides a cushion for the rupee and could help the RBI manage the currency’s volatility in the short term. However, the overall outlook for the rupee remains cautious, with the geopolitical situation adding to the uncertainty. The RBI's ability to manage forex reserves effectively will be crucial if the tensions in the region persist and oil prices continue to rise. Analysts suggest that while the reserves offer some stability, India’s heavy dependence on oil imports means that any sustained spike in crude prices could be problematic for the rupee. Long-term outlook for the rupee and Indian markets Looking ahead, analysts remain cautiously optimistic about the rupee’s recovery in the medium term. Some expect the rupee to strengthen to 84 against the dollar by the October-December quarter, citing low domestic inflation and a manageable trade deficit. However, much of this outlook depends on how the geopolitical situation evolves and the movement of crude prices in the coming weeks. The current volatility in the rupee, triggered by the Israel-Iran conflict and the surge in oil prices, has led to a wait-and-watch approach from investors. Bathini told Moneycontrol that the market is adopting a cautious stance amid the uncertainty, with a particular focus on how crude prices will impact India’s inflation and economic growth. A sustained rise in oil prices could push inflation higher, forcing the RBI to adjust its policies. Despite the short-term challenges, Indian equities could offer opportunities for long-term investors if the rupee stabilises and geopolitical tensions subside. Some sectors, such as defence, infrastructure, and banking, are still seen as attractive due to their growth potential, regardless of the current market volatility. Bathini believes that any correction in the markets, triggered by the ongoing geopolitical risks, could present a good entry point for medium- to long-term investors. While the rupee faces pressure in the short term due to rising oil prices and geopolitical instability, the Indian economy’s fundamentals and forex reserves provide some resilience. Investors are advised to monitor the evolving geopolitical situation closely, as it will be key to determining the rupee’s trajectory in the coming months.

In early trade on June 16, the rupee fell 6 paise to 86.17 against the US dollar, reflecting the broader market’s reaction to the geopolitical turmoil.

Rupee faces pressure amid rising oil prices and geopolitical tensions