16/12/2025

BIZ & FINANCE TUESDAY | DEC 16, 2025

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Japan business mood hits four-year high TOKYO: Big Japanese manufacturers’ business

tonnes of canola oil from the United Arab Emirates in the month. Lower imports of soyoil and sunflower oil cut India’s total imports of edible oils in November by 13.3% from a month earlier to a seven-month low of 1.15 million tonnes, the SEA said. In November, India imported a record 69,919 tonnes of soyoil from China after a supply glut prompted discounts from Chinese crushers, versus India’s traditional South American suppliers. India buys palm oil mainly from Indonesia and Malaysia, and imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine. Palm oil is now about US$100 per tonne cheaper than soyoil and nearly US$200 cheaper than sunflower oil, prompting Indian buyers to step up palm oil purchases. – Reuters to pass on higher costs to consumers. Underscoring uncertainty over the outlook, however, the tankan showed companies projecting business conditions to worsen three months ahead. While fading uncertainty over US trade policy helped brighten the business mood, many firms worried that labour shortages and the hit to consumption from higher prices clouded the outlook, a BOJ official told a briefing. An index measuring job conditions showed firms saw the job market at its tightest since 1991 when Japan was experiencing an asset-inflated bubble, suggesting labour shortages could curb growth in an economy facing a dwindling working-age population. Still, analysts view the tightening job market as working in favour of steady wage gains, a key prerequisite the central bank has set to continue raising interest rates. “With firms reporting acute labour shortages, the Board can rest assured that the virtuous cycle between higher wages and higher prices will remain intact,” said Abhijit Surya, senior APAC economist at Capital Economics, predicting the BOJ to push its policy rate up to 1.75% in 2027. Underscoring the BOJ’s focus on wages, the central bank on Monday released the findings of a separate and rare poll that it conducted via its branch offices about next year’s pay outlook. The poll showed most of the BOJ’s branches expected firms in their regions to offer wage increases in 2026 that matched those of 2025. Japan’s economy shrank in the third quarter as exports fell in the face of US tariffs. But analysts expect growth to rebound in the current quarter, as exports and factory output show signs of recovery. With inflation exceeding its 2% target for well over three years, a growing number of BOJ board members have signalled their readiness to vote for a rate hike to avoid being behind the curve in addressing the risk of too-high inflation. – Reuters

MUMBAI: India’s palm oil imports edged up in November as refiners took advantage of lower prices, boosting purchases of the tropical oil while reducing imports of the costlier soyoil and sunflower oil, a leading industry body said yesterday. Higher palm oil imports by India, the world’s largest buyer of vegetable oils, could help top producers Indonesia and Malaysia cut stocks and support benchmark Malaysian palm oil futures, while putting pressure on US soyoil futures. Palm oil imports in November rose about 5% from October to 632,341 metric tons, the Solvent Extractors’ Association of India (SEA) said. Imports of soyoil dropped more than 18% to 370,661 tonnes and sunflower oil imports fell 45% to a two-year low of 142,953 tonnes. India also imported 5,000 sentiment hit a four-year high in the three months to December, a closely watched survey showed yesterday, reinforcing market expectations the central bank will raise interest rates this week. But firms expect conditions to worsen three months ahead as they fret over the impact of higher US tariffs and soft consumption, highlighting uncertainty over how far the Bank of Japan (BOJ) could eventually push up borrowing costs. The headline index measuring big manufacturers’ business confidence stood at +15 in December, the BOJ’s “tankan” survey showed, up from +14 in September and matching a median market forecast. The reading, which marked the third straight quarter of improvement, was the highest since December 2021 in a sign firms were weathering the hit from higher US tariffs for now. An index gauging big non-manufacturers’ sentiment stood at +34 in December, unchanged from September and roughly in line with market forecasts for a reading of +35. “All in all, the tankan backs up dominant market views the BOJ will raise rates in December. Unless a huge shock hits the economy or markets, it is likely to proceed with a hike,” said Masato Koike, senior economist at Sompo Institute Plus. Big firms expect to increase capital expenditure by 12.6% in the current fiscal year ending in March 2026, the tankan showed, compared with a median market forecast for a 12% rise. Sources have told Reuters the BOJ is likely to raise its short-term policy rate to 0.75% from 0.5% at its Dec 18-19 meeting on receding fears President Donald Trump’s tariffs will severely hurt the export-reliant economy. Big firms saw sales prices as having risen in the fourth quarter and expect prices to keep increasing in the coming three months, the tankan showed, a sign solid demand was enabling them

China’s economy stalls in November A worker operates machinery at a textile factory in eastern China city of Qingdao yesterday. – AFPPIC

“The recent contraction in investment and the continued decline in the property market have been transmitted to consumer confidence.” Even the Singles’ Day shopping festival – which stretched to five weeks this year – failed to excite consumers. Government advisers and analysts say China is likely to pursue its current annual growth target of around 5% next year, as it seeks to kick-start a new five-year plan on a strong footing. But that could prove challenging, with both the World Bank and the IMF offering more conservative outlooks for China’s growth trajectory. At a key economic meeting last week outlining next year’s policy agenda, Chinese leaders promised to maintain a “proactive” fiscal policy to spur consumption and investment, while acknowledging a “prominent” contradiction between strong domestic supply and weak demand. Yet the dual focus on consumption and investment cements concerns that Beijing is not yet ready to ditch a production-driven economic model in favour of one that leans more on household spending. World leaders look to be lining up to put the brakes on China’s exports. French President Emmanuel Macron threatened Beijing with tariffs during his visit to China and called on the country to correct “unsustainable” global trade imbalances. Mexico last week approved tariff hikes of up to 50% next year on imports from China and several other Asian countries, aiming to bolster local industry. Chinese producers may struggle to find new domestic buyers if exports dry up. “Policy support should help drive a partial recovery in the coming months, but this probably won’t avert China’s growth from remaining weak across 2026 as a whole,” said Zichun Huang, China economist at Capital Economics. – Reuters

by fresh real estate worries as property developer China Vanke scrambled to avoid debt default. Economists say the economy has passed the point at which further stimulus would provide an effective fix. The International Monetary Fund last week urged Beijing to speed up structural reform and take action over the property sector, with some 70% of Chinese household wealth tied up in real estate. Fixing the property pains within the next three years will cost the equivalent of 5% of GDP, the IMF estimates. More needs to be done to boost household consumer confidence, Fu Linghui, a spokesperson for China’s customs administration, told a news conference after the data release. China’s new home prices fell further in November. Fu added that an annual 2.6% decline in fixed asset investment in January-November had largely been driven by a 15.9% drop in property investment over the same period. Developers are struggling to convince investors there are buyers for their apartments, which remain unsold even at discounted prices. Vanke, one of China’s largest real estate developers, plans to convene a second bondholder meeting this week as it battles to avert default, after investors rejected a plan by the state backed lender to push back repayment by a year. The property sector once made up a quarter of China’s gross domestic product. In a sign of further strain, annual car sales slumped 8.5%, the steepest decline in 10 months, dimming hopes of a year-end rebound in an industry that typically sees strong sales in the final two months of a year. “The economy slowed across the board in November, and weak retail sales were particularly noteworthy,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management.

BEIJING: China’s factory output growth slowed to a 15-month low, while retail sales posted their worst performance since the country abruptly ended its draconian “zero-Covid” curbs, highlighting the urgent need for new growth drivers heading into 2026. With Beijing’s consumer trade-in subsidies fading, a drawn-out property crisis weighing on household spending and industrial investment risking further deflation, officials have leaned on exports to support growth. That strategy now looks increasingly unsustainable as trading partners around the world bristle at China’s US$1 trillion trade surplus and look to erect import barriers. Industrial output rose 4.8% year-on-year, National Bureau of Statistics (NBS) data showed yesterday, the weakest pace since August 2024, slowing from 4.9% in October. It missed a 5% increase forecast in a Reuters poll. Retail sales, a gauge of consumption, grew 1.3%, their weakest pace since December 2022, when the world’s second-largest economy ended pandemic restrictions, well below 2.9% in October and forecasts for a 2.8% gain. “Strong exports limited the need to turbocharge domestic demand this year, and the trade-in subsidies have started to run out,” said Xu Tianchen, senior economist at the Economist Intelligence Unit. “I think policymakers have turned their attention to 2026, since the around 5% growth target seems within reach for this year, so there’s little additional motivation for further stimulus.” The weak data weighed on Chinese stocks, which were also hit o Policymakers face rising calls to reduce export reliance

India’s palm oil imports rise as lower prices spur buying