Chinese embassy in Germany ‘puzzled’ by reported plan to ban Huawei
Germany’s federal interior ministry said on Tuesday that the government was conducting a review of the security risks of components already installed in the country’s 5G network.
German media also reported that the government planned to ban certain parts made by Chinese telecommunications companies Huawei and ZTE, which have played a major role in German communications networks.
“If the reports are true, China . . . expresses its strong displeasure and extreme confusion,” the embassy said late Tuesday night.
Japan’s balance of payments deficit in January is at a record high
Japan’s current account deficit hit a record high in January, according to Finance Ministry data released Wednesday morning.
At 1.98tn ($14.41bn), Japan’s trade deficit for the month significantly exceeded market forecasts. It was also the country’s largest ever recorded deficit for a single month.
As Asia’s second-largest economy relies heavily on fuel and commodity imports, officials blamed rising energy costs – as well as weak exports to China during the Lunar New Year holiday – for the record deficit.
Asia-Pacific shares fall as Powell spooks investors
Asia-Pacific shares retreated on Wednesday morning as investors were spooked by hawkish comments from Federal Reserve Chairman Jay Powell.
South Korea’s Kospi fell 1.1 percent and Australia’s S&P/ASX 200 fell 0.9 percent. Futures for Hong Kong’s Hang Seng index pointed 1.3 percent lower.
Powell warned on Tuesday that the Fed was prepared to return to larger rate hikes to combat inflation. His comments sent the yield on the two-year US Treasury above 5 percent for the first time since 2007. The S&P 500 and Nasdaq Composite fell 1.5 percent and 1.2 percent, respectively.
What to see in Asia today
Jakarta: China and the Association of Southeast Asian Nations are meeting in the Indonesian capital to discuss the South China Sea, where tensions have risen amid overlapping territorial claims between a number of ASEAN member states and Beijing.
Earnings: Cathay Pacific announces earnings. Traffic at Hong Kong’s airport has rebounded from its pandemic lows, but the number of passengers is still significantly lower than in 2019.
Markets: Shares fell in Japan and futures in Hong Kong pointed lower. Wall Street stocks fell after Federal Reserve Chairman Jay Powell warned that the central bank could raise interest rates more aggressively if the economy grows too fast.
Elon Musk says Twitter can achieve positive cash flow in the second quarter
Elon Musk said Twitter could return to posting positive cash flows next quarter as the CEO tries to cut costs, lure back advertisers and navigate the platform’s technical issues.
In a speech at a Morgan Stanley investor conference on Tuesday, Musk said cash flow at the company he bought for $44 billion USD last year, would break even in the second quarter, adding that it could even turn positive in that period.
He said Twitter’s costs were expected to run about $3 billion. per year, down from the $4.5 billion he said the company would otherwise have had in 2023.
Read more about Musk’s cost-cutting plans here.
Senators are introducing a bill that paves the way for a possible US TikTok ban
Senate Democrats and Republicans have introduced a bill that would give the administration new powers to ban Chinese apps that pose security threats, including the popular video-sharing platform TikTok.
Mark Warner, the Democratic chairman of the Intelligence Committee, announced the bill on Tuesday as part of an effort to create a more coordinated approach across government to counter threats from countries including China, Russia and Iran.
The Restrict Act would require the Commerce Secretary to establish a process to identify threats related to communications and information technology and create solutions to counter them.
Read more about the bill here.
Two-year government yield tops 5% for the first time since 2007
The two-year Treasury yield, which tracks interest rate expectations, topped 5 percent for the first time since 2007.
The yield peaked at 5.01 percent – up 0.13 percentage points on the day – following comments on Tuesday from Federal Reserve Chairman Jay Powell, who indicated the US central bank may be prepared to accelerate the pace of rate hikes in response to warmer than expected economic data.
Investors now expect the interest rate to peak at 5.6 per cent. in September with some chance of a single reduction in December.
Ukraine denies any involvement in the Nordstream pipeline explosions
Ukraine has denied involvement in last year’s explosions that damaged the Nordstream gas pipelines linking Russia and Western Europe after media reports in the US and Germany suggested pro-Ukrainian agents may have been behind the attacks.
“Although I enjoy collecting funny conspiracy theories about the government of Ukraine, I must say: Ukraine has nothing to do with the Baltic Sea accident and has no information about ‘pro-Ukrainian sabotage groups,'” Mykhailo Podolyak, adviser to President Volodymyr Zelenskyy. , wrote.
Podolyak was responding to a report in The New York Times that said U.S. officials had reviewed new intelligence suggesting a “pro-Ukrainian group” had carried out the underwater bombings that struck both the Nordstream 1 and 2 pipelines.
Read more about the suspected perpetrators here.