30/05/2025

FRIDAY | MAY 30, 2025

18

BIZ & FINANCE

Japan likely held off selling US Treasuries

TOKYO: Japan likely held off selling from its huge US Treasury holdings as there is no alternative investment given the dollar’s status as a global reserve currency, former Bank of Japan (BOJ) policymaker Sayuri Shirai said yesterday. Japan and China are the two largest holders of US Treasuries, making their presence a huge focus of attention whenever US yields spike. Although both countries say little about their trading, the huge US Treasury sell-off in April has led to market speculation they could have, or might have, unloaded their holdings. “Japan probably hasn’t sold its holdings as there’s nothing else to buy. What countries including Japan want to hold onto as a reserve currency is the dollar rather than the euro,” Shirai told Reuters in an interview. “The dollar’s dominance as a

Sony: Financial arm spin-off fragmented Europe and a lack of depth in the region’s capital markets diminish its allure as a reserve currency. In Asia, China’s yuan is the more likely potential competitor to the dollar, she said. “Europe is a distant region for Asia and not a big trade destination. “China, by contrast, is boosting its presence in Asia with an increasing volume of trade now using the yuan.” “While the dollar will remain the dominant currency in Asia, the increase in yuan-denominated trade will likely continue.” The dollar’s role has been on the decline for years. The currency now makes up 58% of international reserves, the lowest level in decades - but still well above the euro’s 20% share, according to data from the International Monetary Fund. The share of holdings in yuan stood at 2% and the Japanese yen at 5.8%. – Reuters TOKYO: Sony’s chief executive said yesterday the spin-off of the financial services arm will secure that business its own fundraising capabilities. “It is significant that, through the spin-off, Sony (Financial Group) will secure its own fundraising capabilities while continuing to use the Sony brand and collaborate with Sony Group,” Sony CEO Hiroki Totoki said at an investor day. Sony plans to distribute just over 80% of its shares to Sony Financial Group, which includes banking and insurance, to shareholders through dividends in kind. It is the first partial spin-off by a company in Japan with a direct listing – the first in Japan in more than two decades – set for Sept 29. The business plans to repurchase shares totaling some ¥100 billion (RM2.9 billion) through to March 2027. The company’s origins date back to the late 1970s, when Sony co-founder Akio Morita moved to set up a life insurance business selling to consumers. In more recent years, Sony sold off struggling hardware operations and focused on entertainment such as the PlayStation games business. More than 60% of the conglomerate’s profit came from its entertainment businesses last year. – Reuters highly uncertain,” the statement added. Jin Choi, an economist at HSBC, said in a note that it was “hard to find bright spots in Korea’s growth”. “GDP growth has largely moved sideways at best over the past four quarters, with the first quarter of this year ... showing a surprise contraction.” Exports, he warned, “remain on a weakening path with little sign of front-loading, and we do not expect to see a meaningful improvement in the near term”. – AFP will secure fundraising capabilities

Trump’s previous complaints about the strong dollar also raised suspicions that Washington wants an adjustment lower in the world’s top reserve currency. European Central Bank president Christine Lagarde said on Monday the euro could become a viable alternative to the dollar if the bloc’s governments could strengthen its financial and security architecture. But Shirai said she had doubts the euro could become a real alternative to the dollar, as a politically

o Dollar’s reserve currency status unwavering, says ex-BOJ policymaker

contact

with

current

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reserve currency is unwavering” given the depth of US capital markets and the country’s technological competitiveness, she said, ruling out the idea of Japan diversifying out of American assets. Now a professor at Keio University, Shirai retains close

policymakers. President

Donald Trump’s sweeping tariff announcement on April 2 led to a market rout, including in US Treasuries, casting doubt over the dollar’s status as the safest haven for the global financial system.

Labourers filling sacks

with wheat for weighing at a wholesale market in the central Indian city of Indore. – REUTERSPIC

India wheat and rice production to rise to record high, says govt

MUMBAI: India is likely to produce a record 117.5 million metric tons of wheat in the year ending June 2025, the Farm Ministry said, above its March forecast of 115.4 million tons, as higher prices prompted farmers to expand the area planted with high-yielding seed varieties. India, the world’s biggest wheat

the country will be able to meet domestic demand without imports this year, contrary to market talk that it would need overseas supplies, and a potential drag on global prices. India is the world’s biggest exporter of rice and higher production will help New Delhi to increase shipments. – Reuters

high, with the ministry estimating it at 149 million metric tons, up from last year’s 137.8 million tons. Record production of wheat and rice will lift the country’s total food grains production to 354 million tons from last year’s 332.3 million tons. A strong wheat harvest in India is rapidly replenishing stocks, meaning

producer after China, produced 113.3 million tons of wheat in 2024, the ministry said in a statement issued late on Wednesday. However, a leading industry body said the crop was nearly 6.25% lower than the government’s estimate. The country’s rice production in 2025 is also set to climb to a record

South Korea central bank cuts rate, slashes growth forecast SEOUL: South Korea’s central bank cut interest rates yesterday in a bid to cushion the export-dependent economy from US President Donald Trump’s tariff war, as it almost halved its annual growth forecast. Decision-makers lowered the “During the global financial crisis, the probability of negative growth was estimated at around 5%. Now, that likelihood has risen to nearly 14% on average,” said Rhee. States on April 2, though they were soon reduced to a base rate of 10% for 90 days. However, 25% sector-specific levies on automobiles, steel and aluminium remain in place.

less than expected in the first quarter as the export giant and semiconductor powerhouse reeled from trade tensions and political chaos at home sparked by then-president Yoon Suk Yeol’s brief imposition of martial law in December. The rate cut, which was flagged in April by bank governor Rhee Chang-yong, takes borrowing costs to their lowest level since October 2022. Rhee told a news conference that the current economic downturn was more severe than the 2008 financial crisis.

“Future economic growth trajectory is assessed to be subject to significant uncertainty, stemming from developments in trade negotiations, government stimulus measures, and monetary policies in major economies,” the central bank said in a statement. “Inflationary trends also remain

The growth projection also marks the first time in five years that the central bank has estimated less than 1%, which was last seen during the pandemic, and will be a key issue for the country’s next president after an election next week. South Korea was hit with a 25% across-the-board tariff by the United

benchmark interest rate“from the current 2.75% to 2.5%” and predicted the economy would expand just 0.8% this year, down from the 1.5% projected in February. Asia’s fourth-largest economy grew