21/05/2025

BIZ & FINANCE WEDNESDAY | MAY 21, 2025

READ OUR

HERE

18

Malaysian Paper

/thesun

New Japan theme park rides tourism wave, looks to Asia TOKYO: The company behind a new nature adventure park on Japan’s southern island of Okinawa is hoping the country’s huge tourism boom will get it off to a raring start, and that with time propel the startup further into Asia and other markets. Junglia, a 60ha site built on an old golf course and featuring more than 20 attractions from a hot air balloon ride and buggy riding to treetop walking and a “Dinosaur Safari”, is set to open on July 25. Costing some ¥70 billion (RM2.7 billion), the park is the brainchild of Tsuyoshi Morioka, CEO of entertainment firm Katana. Morioka, a theme park veteran, is credited with turning around flagging attendance at Universal Studios Japan (USJ) in Osaka by bringing in Harry Potter-themed attractions. Japan is experiencing an unprecedented boom in tourism, fuelled by a weaker yen, with overseas visitors climbing 47% to a record 36.9 million last year. Their spending shot up 53% to ¥8.1 trillion, making tourism – which counts as an export in GDP data – the country’s second biggest export sector after cars. The Japanese also love a good theme park with Tokyo’s Disney resorts having enduring success and USJ, despite some early financial woes, proving popular. That said, many parks have also failed. Yu Shioji, the chairman of the Amusement Park Society of Japan, believes Junglia will have “almost no chance” of long-term success given that there are other nature adventure parks in Japan and its relatively high cost – ¥6,930 per day pass for locals and ¥8,800 for international visitors. – Reuters

Microsoft strikes deal with Musk to host Grok AI

SEATTLE: Microsoft on Monday said its cloud servers will now host Grok from Elon Musk’s xAI, days after the chatbot went off the rails with talk of “white genocide” in South Africa. Musk told an event hosted by Microsoft that his company’s models “aspire to truth with minimal error,” adding that “there’s always going to be some mistakes that are made.” The Grok chatbot last week ignited controversy by answering unrelated user prompts with unbacked right-wing propaganda about purported oppression of white South Africans. In a recorded conversation with Microsoft CEO Satya Nadella, Musk said that xAI would always acknowledge mistakes with its Grok AI models. “It’s incredibly important for AI models to be grounded in reality,” the Tesla tycoon said. Generative AI models are often pre-programmed by engineers – through things known as system prompts – to give or avoid specific responses or convey certain moods or styles, no matter the input given by the user. Most recently, the latest model

own generative AI models. The platform gives users access to popular models from various creators such as OpenAI, DeepSeek, Mistral, Meta, Stability AI, and now xAI. AI tools for writing software code are rapidly evolving into “agents” that can assist developers, according to the Microsoft chief. Some 15 million developers have used Github CoPilot AI to code or troubleshoot at the Microsoft-owned platform, the company said. “This is one of the biggest changes to programming that I’ve ever seen,” Altman said during his exchange with Nadella. “This idea that you now have a real, virtual teammate, that you can assign work to.” Microsoft last week said it was slashing unnecessary layers of management and seizing the benefits of new technology as reports said the tech behemoth was laying off thousands of workers. The tech giant did not disclose the total amount of lost jobs but US media reports said it will amount to about 6,000 people or about 3% of its global workforce. – AFP

o Partnership reflects growing demand for diverse chatbot models, as xAI enhances quality assurance protocols

practice

transparency

when

from industry leader OpenAI was found to be generating overly sycophantic responses, and the company quickly said it would make changes to remove the bug. The answers provided by Grok drew alarm as they reflected a conspiracy theory often shared on social media by Musk, who was born in South Africa. The company did not identify who made the code change, but said an “unauthorised modification” directed Grok to provide a specific response that “violated xAI’s internal policies and core values.” Faced with criticism, the startup said it was implementing measures to make Grok’s system prompts public, change its review processes and put in place a “24/7 monitoring team” to address future incidents. While not specifically referring to the incident, Musk told the Microsoft event that xAI will

mistakes are made. This could be interpreted as a dig at arch rival OpenAI, the creator of ChatGPT, which is Microsoft’s main partner to build its in-house Copilot models. OpenAI, which was co-founded by Musk in 2015, is often criticised for keeping its technology’s internal workings secret, as opposed to more open models like Meta’s Llama or the technology from Chinese company DeepSeek. OpenAI CEO Sam Altman also appeared remotely at the Microsoft Build event in Seattle, speaking in a live Q&A with Nadella in which the two tech leaders vaunted the latest developments in their joint partnership. The Grok models from xAI will be available on Microsoft’s Azure AI Foundry, a platform that makes hundreds of models available for paying developers to build their

Weakening dollar reflects growing disinterest in ‘Brand USA’ NEW YORK: Trade-related uncertainties, ballooning fiscal debt and weakened confidence about enduring US exceptionalism have weighed on US assets, with the dollar one casualty. Investors see the currency losing more of its luster as the greenback comes back to earth from lofty valuations. The Trump administration’s tariffs salvo this year prompted investors to cut exposure to US assets after a long period of overperformance. While the US currency steadied somewhat in recent sessions as investors took heart from a truce in the ongoing US-China trade war, it came under renewed selling pressure after ratings agency Moody’s cut the US’ pristine sovereign credit rating by one notch. about 10% above its 20-year average level. There is room for it to weaken significantly further, for example another 10% slide would take it to the lows touched during President Donald Trump’s first term. Investors and strategists have viewed the dollar as overvalued for years but betting against the currency has proved painful time and again, as the US economy powered on. That could be about to change. Steve Englander, head of global G10 FX Research at Standard Chartered in New York, said that while recent trade arrangements might calm markets some, they do not address long-term confidence issues facing the US.

Selling pressure mounts as investors view dollar as overvalued and shift away from USD assets. – UNSPLASH PIX

“There’s plenty of room for further depreciation, purely from a valuation perspective,“ said George Vessey, lead FX and macro strategist at payments firm Convera. The “sell America” trade was back in focus after Moody’s US credit downgrade, he said. The US dollar index has tumbled as much as 10.6% from its January highs, one of the sharpest retreats for a three-month period, leaving speculators net short the dollar to the tune of US$17.32 billion (RM74 billion), close to the most bearish position on the buck since July 2023, according to CFTC data. Part of the bearishness around the dollar has been due to the currency trading at a relatively rich valuation – in January trading as high as 22% above its 20-year average of 90.1 on the dollar index. Currently, the index is hovering

“The dollar weakness story is not over,“ said Englander. Investors are also concerned about the long-term fiscal picture for the US. Analysts say Trump’s sweeping tax-cut bill would add US$3 trillion to US$5 trillion to the nation’s US$36.2 trillion in debt over the next decade. “The combination of diminished appetite to buy US assets and the rigidity of a US fiscal process that locks in very high deficits is what is making the market very nervous,“ George Saravelos, global head of FX research at Deutsche Bank, said in a note. The Trump administration has said it backs a strong-dollar policy. “President Trump has been unequivocally clear about maintaining the strength and power of the US dollar as the world’s reserve currency,“ White House spokesman Kush Desai said.

Despite recent foreign selling, years of US asset appreciation mean the world still holds trillions in US equities and Treasuries. Such selling pressure could come from various corners of the globe as more people zero in on the dollar’s recent failure to act as a haven, investors said. “That’s really what gave people a jolt ... and say ‘Well, if the dollar is no longer acting as a safe-haven currency, if it’s not diversifying us any longer, should we really be holding this much of it?’”said Peter Vassallo, FX portfolio manager at BNP Paribas Asset Management. Colin Graham, head of multi-asset strategies at Robeco in London,

however, said that while there had been a rebalancing of portfolios where people wanted to cut risk, “it hasn’t turned into people selling dollars, assets or equities or Treasuries to repatriate yet.” That could still follow, he said. The dollar’s strength over the last decade had let market participants hold US assets without worrying too much about currency risk. With foreign holdings of US assets in trillions of dollars, per estimates from banks including Deutsche Bank, even a modest rise in hedge ratios – the portion of foreign currency exposure that is protected – could spell significant selling. Increased hedging by investors

means less direct demand for the dollar and more dollar selling pressure in the forward markets. Asian economies including China, South Korea, Singapore and Taiwan have accumulated massive USD exposure as a result of a decades-long trend of investing big trade surpluses in US assets. An unprecedented two-day surge in Taiwan’s currency in early May showed investors how a scramble out of the US dollar could roil markets. Eurizon SLJ Capital’s Stephen Jen and Joana Freire said in a note in early May that USD hoardings of about US$2.5 trillion by Asian exporters and institutional investors “pose sharp downside risks to the dollar vis-à-vis these Asian currencies.” – Reuters