22/05/2025

BIZ & FINANCE THURSDAY | MAY 22, 2025

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Number of visitors to Japan hits record high

Indonesian central bank cuts rate to boost growth JAKARTA: Indonesia’s central bank yesterday cut key interest rates for the second time this year as it looks to boost economic growth. Bank Indonesia lowered the seven-day reverse purchase rate by 25 basis points to 5.5%, the first cut since January. Its two other main rates were also slashed by 25 basis points. The rate cut was “consistent” with low inflation forecasts, maintaining stability of the rupiah and to drive up growth, central bank governor Perry Warjiyo said. “The decision is consistent with the low and controlled inflation estimate in 2025 and 2026 ... efforts to maintain the stability of the rupiah exchange rate in line with its fundamentals and to help encourage sustainable economic growth,” Perry told reporters. The rupiah had been under pressure recently and was trading near its lowest levels since the Asian financial crisis on the back of US President Donald Trump’s sweeping tariffs, which have since largely been paused for 90 days. The currency has since recovered some ground as tensions eased after Washington and Beijing agreed last week to deescalate the trade war. Indonesia’s rate cut was expected and analysts projected the central bank would ease monetary policy gradually due to global economic uncertainties. “Looking ahead, the uncertain global environment means the exchange rate is likely to remain volatile over the coming months. As a result, the pace of further easing is likely to be gradual,” said Capital Economics senior Asia economist Gareth Leather. He forecast the central bank would cut rates by a further 50 basis points this year. – AFP South Korea exports fall on tariff woes SEOUL: South Korea’s exports fell 2.4% year-on-year in the first 20 days of May, partly due to weak sales to the United States after Washington imposed and then partly lifted sweeping tariffs, official data showed yesterday. South Korea’s exports showed unexpected strength last month, lifted by robust semiconductor demand even as US tariffs weighed on trade. But early signs suggest that rising trade tensions are beginning to affect South Korea’s other key industries – including automobiles, which have been hit by a 25% levy. South Korea’s exports totalled US$32 billion from May 1 to 20, down 2.4% from the same period last year, according to data from the Korea Customs Service. Shipments to the United States, Seoul’s key ally, fell 14.6% year-on-year during the period, while exports to China and the European Union also declined by 7.2% and 2.7%, respectively. Shipments of semiconductors, South Korea’s biggest export, rose 17.3% year-on-year. Experts have suggested the rise in chip exports, including the high-tech ones needed for AI, could be due to stockpiling. But the country’s other key exports, cars and steel, fell on-year by 6.3% and 12.1%, respectively, during the May 1-20 period. The auto industry accounts for 27% of South Korea’s exports to the United States, which takes in nearly half of the country’s car exports. Exports of petroleum products, home appliances and wireless communication devices also all dropped, by 24.1%, 19.7% and 5.9%, respectively. Trade Minister Cheong In-kyo said for the entire month of May, the country’s “exports to the US and China are expected to decline as the impact of American tariff measures begins to materialise”. – AFP

standing in the road to photograph a view of the snow-capped volcano that had gone viral. Business travellers in cities including Tokyo have complained that they have been priced out of hotels because of high demand from tourists. Tourists gobbling sushi and onigiri have also been cited as a factor in shortages of rice, which has pushed the price of the staple to record levels, creating a political headache for the government. This year, the Japanese Meteorological Agency on March 30 declared the country’s most common and popular somei yoshino variety of cherry tree in full bloom in Tokyo. Although this year’s blooming dates are around the average, the agency says climate change and the urban heat-island effect are causing sakura to flower approximately 1.2 days earlier every 10 years. Katsuhiro Miyamoto, professor emeritus at Kansai University, estimated the economic impact of cherry blossom season in Japan, from travel to parties held under the flowers, at ¥1.1 trillion (RM31 billion) this year, up from ¥616 billion in 2023. – AFP

A weak yen has for months been leading to a boom in visitors, with national tourism figures released in January showing a record of about 36.8 million arrivals last year. The Japanese government has set an ambitious target of almost doubling tourist numbers to 60 million annually by 2030. Authorities say they want to spread sightseers more evenly around the country, and to avoid a bottleneck of visitors eager to snap spring cherry blossoms or vivid autumn colours. But as in other global tourist magnets like Venice in Italy, there has been growing pushback from residents in destinations such as the ancient capital of Kyoto. The tradition-steeped city, just a couple of hours from Tokyo on the bullet train, is famed for its kimono-clad geisha performers and increasingly crowded Buddhist temples. On Mount Fuji, the nation’s highest mountain and a once-peaceful pilgrimage site, authorities have started charging climbers in an effort to reduce overcrowding. Last year, a barrier was briefly erected outside a convenience store to stop people

o Weak yen and spring cherry blossom season lead to tourism boom

TOKYO: The number of foreign visitors to Japan soared 28.5% in April year-on-year to a record 3.91 million, official figures showed yesterday. “Spring cherry blossom season boosted demand for visits to Japan in many markets, as in the previous month, and overseas travel demand increased in some Asian countries, in Europe, the US and Australia to coincide with the Easter holidays,” the Japan National Tourism Organisation said. It said the total surpassed the previous record of 3.78 million in January 2025 and was the highest single month on record, and the first single month to exceed 3.9 million visitors. For the first four months of the year the total was 14.4 million, a rise of 24.5%.

Geishas rehearsing at the Shinbashi Enbujo Theatre before the 100th Azuma Odori festival in Tokyo. – AFPPIC

China, Asean complete talks on upgraded trade deal BEIJING: China and the Association of Southeast Asian Nations (Asean) have completed negotiations to further refine their free trade area to include the digital and green economy and other new industries, China’s Commerce Ministry said yesterday. openness, inclusiveness and win-win cooperation”, the statement said. Negotiations began in November 2022, and the agreement covers areas including the digital economy, green economy, and supply chain connectivity, the statement said. Some of the levies have since been delayed while China and the US agreed this month to pause some of their tariffs.

President Xi Jinping took a three-nation tour of Southeast Asia in April to consolidate ties with some of China’s closest neighbours, calling on Asian nations to unite against what he called geopolitical confrontation, unilateralism and protectionism. The formal signing of the trade agreement is expected to take place before year end. The Asean-China Free Trade Area was first signed in 2002 and came into force on Jan 1, 2010. – Reuters

The pact will“promote the deep integration of the production and supply chains of both sides”, it added. China has intensified engagement with Asean since US President Donald Trump announced hefty import tariffs on countries around the world and targeted China with even heavier levies.

Asean, made up of 10 countries, is China’s largest trading partner, with the value of total trade reaching US$234 billion in the first quarter of 2025, according to Chinese customs data. The so-called 3.0 version of the free trade area will “inject greater certainty into regional and global trade and play a leading and exemplary role for countries to adhere to