Global Economy

Trading of 10-year Japanese government bond futures at the Singapore Exchange increased sixfold in 12 months to an average daily volume of 5,400 contracts in August, the exchange said.

The volume represents about 54 billion yen in notional value traded per day, driven by rising volatility from global funds, interest-rate hikes, inflation, and fiscal risks, according to Singapore Exchange data, The Straits Times reports.

Asian technology stocks fell sharply on Wednesday as investors reacted to rising bond yields, higher oil prices and persistent inflation following a Wall Street selloff.

Seoul's Kospi index dropped more than 5%, with chip makers SK hynix and Samsung each falling at least 7%, Channel NewsAsia reports, citing AFP, Channel NewsAsia business reports.

Petrol prices fell 5.7 percent in July and diesel dropped 12.1 percent, Stats NZ reported, as global energy costs remained lower amid US-Iran tensions. The declines marked the third consecutive monthly fall, though both fuels remained significantly higher than a year ago — petrol up 15.1 percent and diesel up nearly 35 percent over 12 months.

Food prices rose only 0.1 percent for the month, held back by the largest fall in meat and poultry prices in more than five years, offsetting seasonal rises in fruit and vegetables. The selected items measured — which account for about half the consumer price index — showed overall price growth softer than expected, with economists pointing to a potential fall of about 0.4 percent in overall consumer prices.

Economists said the figures suggest annual inflation has peaked at 4.1 percent and will ease further, though it will likely remain above the Reserve Bank's 3 percent target band for the remainder of the year. ASB senior economist Mark Smith said inflation below 3 percent was still about a year away, and the central bank would continue raising the official cash rate, with economists forecasting it could reach 3.25 percent by year end, RNZ business (NZ) reports.

Singapore's non-oil domestic exports grew 24.2 per cent in July, driven by surging electronics shipments linked to artificial intelligence demand, but fell short of economists' forecast of 26.5 per cent, Enterprise Singapore reported on Monday.

Electronic exports nearly doubled, growing 112 per cent, with disk media products surging 339.1 per cent, personal computers up 120.8 per cent and integrated circuits gaining 84.5 per cent. Non-electronic exports contracted 2.3 per cent, led by a 56.7 per cent drop in pharmaceuticals, The Straits Times reports.

Japan's real gross domestic product grew 1.1 per cent on an annualised basis in the three months through June, the Cabinet Office reported on Aug 17, missing economists' forecast for 2 per cent and marking a slowdown from the previous quarter's revised 1.9 per cent.

Capital investment fell 1.2 per cent, steeper than the prior period's 1 per cent drop, while private consumption came in flat, missing the consensus estimate for 0.4 per cent growth. The slowdown reflects uncertainties from the Middle East conflict, which has pushed up fuel and petroleum prices and disrupted supply chains, and a reluctance among consumers to spend amid rising living costs.

The weak domestic demand complicates policy decisions for the Bank of Japan as it weighs its next rate increase; traders were pricing in an 80 per cent likelihood of a rate hike when the BOJ decides policy on Sept 18. The slowdown will also concern Prime Minister Sanae Takaichi, whose approval ratings have dipped as consumers face persistent price increases, though she has announced subsidies on utility costs and plans to cut the sales tax on food to 1 per cent from April, The Straits Times reports.

Food prices in New Zealand rose 1.9% in the year to July, the smallest annual increase since December 2024, according to figures cited by the NZ Herald.

The moderation in food price growth comes as retail spending rebounds across the economy, Tom Raynel reports for NZ Herald business.

The US Federal Reserve under new chair Kevin Warsh has abandoned forward guidance and dot-plot forecasts, arguing that explicit signals of future interest rates lack credibility given repeated inflation shocks since 2020, according to analysis in the Guardian.

Warsh has launched a comprehensive review of Fed operations with 15 outside advisers, including former Bank of England governor Mervyn King, who has called forward guidance "silly" given the uncertainty central banks face. The move reflects criticism that the Fed, the European Central Bank and Bank of England moved too slowly to counter inflation after the Ukraine war in 2022, when UK and eurozone inflation exceeded 10%.

The shift leaves markets and the public without explicit guidance on the path of rates or how the Fed will respond to economic developments, said Charlie Bean, a former deputy governor of the Bank of England. US inflation fell to 3.4% in July but faces renewed upward pressure from rising oil prices linked to tensions in the Middle East, Phillip Inman reports for Guardian business.

The U.S. dollar traded range-bound against major peers on Tuesday as markets continued pricing in a dovish response from the Federal Reserve following softer economic data.

Recent data pointed to a softer U.S. economy, including unexpected job losses last month and mild inflation readings, leading investors to scale back interest rate expectations, Channel NewsAsia reports.

New Zealand's services sector expanded in July for a second consecutive month, with the BNZ-BusinessNZ Performance of Services Index rising to 50.6, but employment continued to deteriorate, falling for the 32nd straight month with the employment index stuck at 48.5.

BusinessNZ chief executive Katherine Rich said firms remained cautious about hiring despite the sector's modest growth. Negative sentiment jumped to 64 percent of respondents' comments, with cost-of-living pressures, fuel prices and interest rates cited as main concerns. BNZ senior economist Doug Steel said employment was the services sector's "Achilles' heel" and that the unemployment rate was unlikely to fall until meaningful hiring returned to the sector, which accounts for nearly three-quarters of the economy, RNZ business (NZ) reports.

The federal and state governments will split $2.5 billion in subsidised power to keep Tomago Aluminium operating for at least another decade, with Rio Tinto investing at least $1.1 billion including $100 million in decarbonisation, Prime Minister Anthony Albanese and NSW Premier Chris Minns announced on Thursday. The deal saves about 1,000 jobs at Australia's largest aluminium smelter, which faced closure at the end of 2028 due to rising coal-fired power costs and lack of reliable renewable energy infrastructure.

The Opposition has called the bailout evidence of the government's renewable energy policy failure, while the Greens say Rio Tinto — which reported $10 billion in profit after tax last year — should not receive subsidies without the government taking an equity stake. Once complete, the arrangement is expected to deliver an extra 3 gigawatts of renewable power across NSW, Ben Clifford reports for ABC business (AU).

The US dollar's advance stalled on Thursday after benign US inflation data overnight prompted traders to reduce bets on a near-term Federal Reserve rate hike. US consumer prices rose 0.1% in July, in line with expectations, and CME Group's FedWatch tool showed odds of a September rate hike fell to 40% from 54% a week earlier.

The dollar index was flat at 100 on Thursday but on course for a 0.4% weekly gain. The dollar traded at 159.44 yen, near the 160 level targeted by recent joint US-Japan intervention at month's end that had pulled the rate down from near a four-decade peak of 164. Michael Wan, currency strategist at MUFG, said the Fed is likely to hold rates steady in September rather than raise them, weighing inflation risks against a softening labour market after July payrolls fell short of forecasts.

The euro was little changed at $1.1523. Sterling eased 0.05% to $1.3489 ahead of UK GDP data. The Australian dollar fell 0.2% to $0.7049, while the New Zealand dollar slid 0.4% to $0.5832.

– Reuters Channel NewsAsia business reports.

Thailand's economy likely expanded 1.7 per cent in the April-June quarter from a year earlier, slowing from 2.8 per cent in the first quarter, according to a Reuters poll of 15 economists published August 7-12. On a seasonally adjusted quarterly basis, GDP was expected to contract 0.6 per cent, the poll showed. Data is due August 17.

Weak household consumption was the main drag on growth, economists said, as higher oil prices rippled through transport and other costs. "High household debt and an ageing population were also expected to constrain consumer spending despite government fiscal measures," the poll found. Tourism arrivals were down 3.2 per cent year-on-year as of August 1, limiting relief from that sector.

Private investment in electronics and artificial intelligence infrastructure was expected to cushion the slowdown, along with export support, though economists said the export boost could fade in the second half after front-loading earlier in the year. Thailand's exports rose 20.8 per cent in June from a year earlier.

– Reuters Channel NewsAsia business reports.

The NZ sharemarket rose 0.6% following a Reserve Bank survey on inflation expectations, the NZ Herald reports.

Container shipping giant Maersk reported second-quarter EBITDA of US$3 billion, well above analyst forecasts of US$2.12 billion, and raised its full-year earnings guidance for the second time this year, Reuters reports. The result reflects strong demand in Asia and elevated freight rates driven by geopolitical disruptions, including the US-Iran war and Houthi attacks in the Red Sea that forced ships to take longer routes around Africa's Cape of Good Hope.

Maersk, the world's second-largest container shipper, expects global container market growth of around 4 per cent in 2026. However, some analysts have cautioned that the recent strength in freight rates is temporary, and that any normalisation of Red Sea traffic could put significant downward pressure on rates. Maersk and other major shippers have begun resuming services through the Suez Canal in recent months, The Straits Times reports.

Asian stocks rose on Thursday after U.S. consumer prices increased 0.1 per cent in July, in line with expectations, dimming the case for a Federal Reserve rate hike next month. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.97 per cent, led by South Korean shares jumping 4.4 per cent. Money markets now predict a 40 per cent chance of a September rate hike, down from 54 per cent a week ago, according to CME Group's FedWatch.

Oil held near $80 a barrel as Washington and Tehran remained deadlocked over efforts to end the Gulf war. U.S. crude fell 0.83 per cent to $82.58 a barrel and Brent fell to $88.35 a barrel. Iran and the U.S. remained at loggerheads over efforts to agree a permanent end to the war, with talks to revive a June interim agreement making no headway, a senior Iranian source said, Channel NewsAsia business reports.

Crypto exchanges operating in Singapore will have to collect customer tax residency information and report transaction details to the Inland Revenue Authority of Singapore from 2027 under the Crypto-Asset Reporting Framework, an OECD-developed system for exchanging crypto tax data between jurisdictions.

Firms must register with IRAS by 31 March 2028 and obtain self-certification from existing customers by the end of 2027 to determine their tax residency. They will report annual transaction data including the value and number of crypto purchases, sales, trades and transfers for reportable users, as well as crypto payments for goods and services worth more than US$50,000. First reports covering the 2027 calendar year are due by 31 May 2028, with IRAS then sharing the information with tax authorities in jurisdictions where users are tax resident.

Global equities rose on Wednesday as U.S. consumer prices increased only 0.1 per cent in July, easing expectations for a Federal Reserve rate hike next month. MSCI's global gauge rose 0.37 per cent, the S&P 500 added 0.31 per cent and the Nasdaq Composite traded up 0.65 per cent.

Oil prices fell despite ongoing tensions over Iran. Brent crude fell 0.26 per cent to $88.68 a barrel and U.S. crude fell 0.49 per cent to $82.79, though both settled more than $1 higher on Tuesday. Money markets had shown a roughly 50 per cent chance of a Fed rate hike before the inflation data, according to Reuters.

Gold rose 1.61 per cent to $4,436.99 an ounce as softer inflation cooled rate-hike bets. Markets are increasingly pricing in a 60 per cent chance of a quarter-point hike at the Bank of Japan's September meeting, putting pressure on shorter-dated Japanese bonds. The yen strengthened 0.11 per cent to 159.08 per dollar, Channel NewsAsia business reports.

The dollar ticked higher on Wednesday as renewed tensions in the Gulf and a potential energy shock boosted demand for safe-haven currency, Reuters reports. Oil prices edged up after separate reported attacks on shipping by the United States and Yemen's Iran-aligned Houthis, with Tehran saying the Strait of Hormuz would remain closed unless Washington accepts its conditions.

Markets are focused on U.S. inflation data due later Wednesday for signals on Federal Reserve policy. Economists expect inflation picked up last month after easing in June. Fed funds futures imply a 50 per cent chance the central bank will leave rates unchanged at its meeting ending September 16, according to the CME Group's FedWatch tool.

The U.S. dollar index, which measures the greenback's strength against a basket of six currencies, was up 0.05 per cent at 99.85. The yen weakened 0.05 per cent to 159.38 against the dollar despite joint intervention by U.S. and Japanese authorities, while the euro was down 0.05 per cent at $1.1536, Channel NewsAsia business reports.

China's Ministry of Finance and State Taxation Administration issued rules on July 24 imposing a 20 per cent tax on offshore trusts at every stage from establishment to distribution. Unpaid taxes on assets placed in trusts since January 1, 2023, must be settled within 90 days to avoid penalties, Reuters reports.

Singapore and Hong Kong wealth managers are closely monitoring the impact. Private banks have advised clients to seek legal advice, with some sending joint visits from tax and legal experts to explain the "fluid and messy" situation, according to sources. Loh Kia Meng, head of private wealth at Singapore law firm Dentons Rodyk, said a foreign passport or permanent residence does not automatically shield wealth from China's tax reach if economic interests remain tied to the country.

Singapore's Monetary Authority said the asset management and private wealth sectors have not reported significant disruption, though regulators are keeping close watch. Tax experts said wealthy Chinese are calculating potential bills and weighing asset sales before the grace period expires, The Straits Times reports.

Job advertisements in New Zealand fell 0.8 percent in July, marking the third consecutive monthly decline and pointing to a softening labour market despite year-on-year growth of 6.2 percent, according to SEEK's employment report released on Tuesday.

Applications per job ad rose 1.6 percent in June, suggesting candidates faced stiffer competition for fewer vacancies. Auckland ads fell 0.9 percent and Wellington declined 1.3 percent, with weakness in sales, manufacturing and government roles, while only four regions recorded monthly growth. "Conditions remain strongest in the South Island, while larger centres, including Auckland, Wellington and Waikato, continue to face greater headwinds," said Rob Clark, SEEK New Zealand country manager.

At an industry level, mining, resources and energy showed the strongest momentum, with ads up 3.3 percent for the month and 38.5 percent over the year. Construction fell 0.9 percent nationally, and healthcare and medical roles declined 1.4 percent. The figures follow official labour market data showing unemployment rose to 5.6 percent in the June quarter, RNZ business (NZ) reports.

More than 70% of Southeast Asian adults remain unbanked or underbanked, representing a $1.5 trillion financial services opportunity, according to analysis by fintech executives and regulators. Traditional credit models cannot assess borrowers with no salary records, no credit bureau history and no formal collateral — not because they are uncreditworthy, but because the data does not exist in forms banks know how to read.

AI-led credit decisioning systems are beginning to close the gap by reading patterns in spending behaviour, payment velocity, account balance trends and device metadata. Grab Finance deployed 22 AI decision workflows across six Southeast Asian countries in under eight months, lifting credit offer eligibility by about 50% for previously ineligible users, according to FICO. The stakes are high: banks that deploy AI-led inclusion responsibly will capture a generation of first-time borrowers, while those that do not risk building the next non-performing loan crisis, Fintech News Singapore reports.

The Reserve Bank of India is examining ways to reduce cross-border payment costs through closer links between instant payment systems and central bank digital currencies across BRICS member countries, Governor Sanjay Malhotra said, according to Reuters.

Possible approaches include greater interoperability between members' instant payment networks and direct connections between their CBDCs, with trade and tourism payments among intended uses. India, which holds the BRICS chairmanship this year, is hosting the group's 2026 summit where the proposals are expected to be discussed, Fintech News Singapore reports.

Singapore's Ministry of Trade and Industry raised its economic growth forecast for 2026 to 4.5%-5.5% on Tuesday, up from a previous projection of 2%-4%, citing stronger-than-expected AI-related capital spending and a milder impact from Middle East tensions than feared.

The economy expanded 5.9% in the second quarter, slightly above the advance estimate of 5.7% but down from 6.3% growth in the first quarter. Manufacturing, wholesale trade and finance sectors led the gains, driven by robust global demand for electronics and precision engineering tied to AI investment, Channel NewsAsia business reports.

Singapore's Ministry of Trade and Industry raised its 2026 economic forecast to between 4.5 and 5.5 per cent on Tuesday, citing stronger-than-expected performance in the first half of the year and accelerating global AI-related capital expenditure. The upgrade prompted several economists to revise their own projections upward, with Maybank lifting its forecast to 5.2 per cent and OCBC to 5.2 per cent.

"The upgraded forecast is certainly a bullish signal, largely attributable to the global AI investment boom," said OCBC chief economist Selena Ling. However, MTI's permanent secretary Beh Swan Gin cautioned that Singapore is not solely dependent on AI, with other sectors including construction, finance, insurance and information and communications also contributing to growth.

Economists echoed that diversification, noting that weakness remains in parts of the economy hit by Middle East supply disruptions, particularly chemicals manufacturing, and that dampened consumer sentiment amid inflation could weigh on retail and food and beverage sectors, Channel NewsAsia business reports.

The US dollar gained and the Japanese yen weakened 0.75 per cent to 158.97 per dollar on Monday as traders reassessed the odds of a Federal Reserve rate hike at its September meeting, Reuters reports. Fed funds futures traders are pricing in 48 per cent odds of a hike, down from 55 per cent after Friday's weaker-than-expected jobs report, which also saw significant downward revisions.

Wednesday's consumer price index data for July could shift expectations if it shows a reacceleration in inflation, analysts said. The dollar index rose 0.15 per cent to 99.76 against a basket of currencies including the yen and euro. Speculators slashed their bearish bets on the yen by the most in over 12 years, according to Commodity Futures Trading Commission data, reflecting intervention by Japanese and US authorities to strengthen the currency, Channel NewsAsia business reports.