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Bank of Japan remains silent amid economic concerns

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The Bank of Japan (BOJ) Governor, Kazuo Ueda, showed little urgency during a press briefing on Thursday regarding the weakening yen, dampening expectations for any immediate monetary tightening. Earlier in the day, the BOJ maintained its key interest rate at 0.25%, extending the status quo for the third consecutive policy meeting.

The yen is nearing levels last seen during Japan’s intervention in April and May to stabilize its currency against the dollar. However, Governor Ueda downplayed such concerns, stating, “Import inflation is relatively stable on an annual basis.” This lack of immediate action has left markets uncertain about the BOJ’s next move.

Market participants had speculated on a possible rate hike during the BOJ’s two-day meeting, but Ueda emphasized the need for more data. “One of the reasons we were cautious about raising rates this time was that we decided we needed a little more information on the momentum behind wage increases, which the BOJ sees as key to sustaining 2% inflation,” Ueda explained.

Tomoaki Shishido, an interest rate strategist at Nomura Securities, described Ueda’s stance as “extremely dovish,” noting that it reduced the likelihood of a rate hike in the near term. “He did not rule out a rate hike in January, but his remarks suggest the probability is much lower than market expectations,” Shishido told Nikkei Asia.

Some speculate that Ueda’s hesitance might be a strategic move to pressure politicians into requesting a rate hike. Prominent lawmakers, including Prime Minister Shigeru Ishiba, have previously expressed resistance to such measures, given the potential economic repercussions.

The BOJ’s post-meeting statement remained largely unchanged, providing few insights into the decision to hold rates steady. It reiterated that “Japan’s economy will continue to grow at a pace above the potential growth rate due to the gradual intensification of a virtuous cycle from income to spending.” However, the statement highlighted persistent risks, such as “high uncertainties surrounding Japan’s economic activity and prices, including developments in overseas economic conditions.”

Japan’s core inflation, as estimated by the BOJ, has been slowing since late last year, currently hovering between 0.8% and 1.5%. Analysts remain divided on the timing of the next rate hike, with surveys indicating mixed expectations ranging from next month to as late as March.

The yen’s depreciation, exacerbated by the widening interest rate differential between Japan and the U.S., has led to a surge in the cost of imported goods like food and energy. This trend disproportionately affects low-income households and small businesses, intensifying calls for monetary policy adjustments.

On Wednesday, the U.S. Federal Reserve cut its interest rate for the third time this year to a range of 4.25%-4.5%. The move caused the yen to fall as low as 154.70 against the dollar, with some analysts warning it could test a 37-year low of 161 against the dollar in 2024.

The BOJ faces a delicate balancing act as it seeks to normalize monetary policy without disrupting financial markets. The last rate hike in July caused an 8% surge in the yen and triggered an 18% sell-off in Tokyo stocks. Analysts suggest this experience has made Ueda cautious about sudden policy shifts.

Looking ahead, the BOJ is monitoring wage growth and consumer inflation to determine the appropriate timing for any rate hikes. External risks, including a slowing Chinese economy and uncertainty under U.S. President-elect Donald Trump’s proposed tariffs, further complicate Japan’s economic outlook.

ASIA

Khalil Haqqani’s assassination will damage Pakistan influence on Taliban

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Targeting the Afghanistan minister for refugees and one of key members of the Haqqani network has generated a stock of questions. Since the return of Taliban into power Khalil Haqqani become third most important figure targeted by suicide bomber inside his most guarded ministerial complex at Kabul. In the wake of prolonged links, Pakistan is likely to face decline in its influence in war devastated Afghanistan.

Not only it claimed but even Taliban high command has blamed the Islamic States (IS) also called Daeesh terrorist for carrying out suicide attack against Khalil Haqqani. However, common men and analysts as well are in hunt of answers to queries pertained to honouring of IS militants on the soil of Afghanistan. It is no more secret that almost all hardline Islamists organs and individuals including al-Qaeda, Daeesh and others are benefitting no other than US lead allies. Rebellion against Syrian president Bashar Asad after Libyan leader Col Gaddafi has confirmed brain behind such so called Islamist groups. Whatever might be by Persian (Islamic Republic of Iran) establishment designs but its patronised Hammas and Hezbollah doing has made more strengthen US puppet Israel in the Middle East. 

Through different jihadic period, Pakistan has established unbeatable influence across Afghanistan.

Reaction of Kandaharis within Emirate Islami over murdering of Khalil Haqqani in a suicide attack is not encouraging. Not even a single top leader of Emirate Islamic turned up to the funeral of Khalil Haqqani which confirms rifts within Taliban ranks. Only foreign minister Amir Khan Muttaqi and Maulvi Abdul Kabir both from South-Eastern zone were amongst those who attended funeral or last rites of Khalil Haqqani who had accredited himself as pioneer of suicide bombers in the region. 

Rifts within Taliban ranks are not new but lingering on since mid of August 2021 last. At that time, Taliban high command had made up its mind for monopolising the government set up but opposed by none other than Khalil Haqqani. Even former Pakistan ISI chief Lt Gen (Retd) Faiz Hameed had also extended help to Khalil in this respect. Sirajuddin Haqqani who is leading the family and notorious Haqqani Network and less experienced and he was always guided by uncle Khalil Haqqani to right directions. Now when Khalil Haqqani is no more therefore Sirajuddin Haqqani would definitely face hardships.

Through different jihadic, militant and other individuals, Pakistan has established unbeatable influence across Afghanistan. Earlier, this influence has sustained first ever set back when the US established direct links with the Emirate Islami through Qatar. However, Pakistan succeeded in recovering such losses to some extent by exploiting geo-politico locations. But now the sudden death of Khalil Haqqani is likely to end Pakistan influence in Afghanistan as Khalil after his elder brother Jalaluddin Haqqani was considered most loyal and obedient to Rawalpindi-Islamabad.

All those played pivotal roles in the “Great Game” either lost their lives or end up in exile.

In the wake of recent developments in Syria, the US has confirmed its main role in Islamic world not only for safeguarding its own geo-strategic economic interests but also for making Israel safe and sound. On such ground, US lead allies are interested in further confining Russia to its own international border. Like hard line Islamist groups and individuals of Syria, US spy agencies eyeing and hopeful of a due role from al-Qaeda and IS lead Asian Islamic groups, camping across Afghanistan and its border regions along with Pakistan.

No one can deny the fact that Haqqanis are witnesses to prolonged war on the soil of Afghanistan. Almost all the eyewitnesses of this war have been eliminated. Khalil’s brutal killing is also considered in sequence or part of the move in progress against eyewitnesses of war on the soil of Afghanistan, declared a Great Game by former President Dr Najibullah little before signing of the Geneva Accord in 1988. All those who played pivotal roles in this great game have either lost their lives or are now unable to live inside the country with honour and peace.

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South Korea’s constitutional court reviews President Yoon’s impeachment case

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South Korea’s Constitutional Court convened on Monday to begin its review of the impeachment of President Yoon Suk Yeol. The case follows the National Assembly’s impeachment motion, passed late Saturday with 204 votes—well above the two-thirds majority threshold required in the 300-member legislature.

Six judges from the court decided to hold the first hearing on December 27, following their initial meeting after the impeachment vote. Representatives from the National Assembly and President Yoon will participate in the hearing to determine procedural steps for resolving the case. Additionally, the court announced the formation of a task force to facilitate the review.

“We will handle this swiftly and fairly,” said Judge Kim Hyung-du, addressing reporters before the meeting. He emphasized the importance of organizing preparatory procedures effectively. Judge Kim also expressed confidence that the court would achieve its full composition of nine members by the end of December, as motions to elect three judges were submitted last week, with confirmation hearings planned for later this week.

For the impeachment to be upheld, six of the nine judges must vote in favor.

The court’s review comes amid escalating legal challenges for President Yoon. On Sunday, Yoon declined a summons from prosecutors investigating his alleged involvement in a case of martial law declaration earlier this month. Prosecutors reissued the summons on Monday, though Yoon’s appearance remains uncertain, according to Yonhap News Agency.

Separately, police announced plans to summon Yoon on Wednesday in connection with allegations of rioting and abuse of office. The president has yet to respond to these summonses.

The impeachment vote has triggered a crisis within the People Power Party (PPP). On Monday, PPP leader Han Dong-hoon resigned after facing backlash for supporting the impeachment measure and persuading enough party members to vote in favor.

“I am resigning as leader of the People Power Party because I can no longer fulfill my duties following the resignations of board members,” Han stated during a press conference. Five of the nine board members resigned, citing dissatisfaction with Han’s handling of the impeachment.

Despite a consensus within the PPP to oppose impeachment, a secret ballot revealed that 12 PPP lawmakers joined all 192 opposition and independent MPs in supporting the motion.

The main opposition Democratic Party continues to press its advantage amid the political turmoil. Democratic leader Lee Jae-myung called on acting president and Prime Minister Han Duck-soo to establish a bipartisan body to address national issues while the Constitutional Court deliberates Yoon’s fate.

“It is time for the National Assembly to actively manage the affairs of the Republic of Korea,” Lee said at a press conference on Sunday. “The People’s Power Party is no longer the ruling party. The ruling party, as it stands, no longer exists,” he added.

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Taliban, Turkmenistan FMs visit construction site of multibillion-dollar gas pipeline project

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The Afghan Foreign Minister Amir Khan Muttaqi with his Turkmenistan counterpart Rashid Murdov, had visited the construction site of the Turkmenistan-Afghanistan-Pakistan-India gas pipeline project near the common border between the two countries. During the visit, they reviewed the operational affairs of the TAPI pipeline, where both the officials discussed laying the railway track, optical fiber transfer and visa and transportation facilities.

Spokesman for the Afghan Foreign Ministry Hafiz Zia Ahmad said that the discussions “extended beyond the TAPI pipeline project to include the expansion of the railway, the construction of railway warehouses in Torghundi, the deployment of fiber optic networks, and the facilitation of visa issuance and transportation services.”

The Turkmen Foreign Minister provided a comprehensive briefing on the progress of the TAPI pipeline, the acceleration of construction activities, and the next steps in the Project, Zia said in a statement.

The $7 billion TAPI project will bring natural gas to Afghanistan, Pakistan and India

The $7 billion Turkmenistan–Afghanistan–Pakistan–India (TAPI) Gas Pipeline, also known as Trans-Afghanistan Pipeline, is a natural gas pipeline being developed by the Galkynysh – TAPI Pipeline Company Limited with the participation of the Asian Development Bank. The pipeline will transport natural gas from the Galkynysh Gas Field in Turkmenistan through Afghanistan into Pakistan and then to India. The official work on the project was opened on 13 December 2015 in Turkmenistan and the practical work in Afghanistan began on 11 September 2024.

The pipeline will have a capacity to carry 33 billion cubic meters of gas from Turkmenistan to Pakistan and India through Afghanistan’s provinces of Herat, Farah, Helmand and Nimroz.

It is worth mentioning that the much-delayed project was first signed in 2010 but the work has been put on hold due to technical and financial complications. The work was also stalled due disagreement between the archrivals Pakistan and India. However, the four countries Turkmenistan-Afghanistan-Pakistan-India agreed to work on the TAPI pipeline project

However, the work on the Afghan side remained stuck due to war and the Taliban’s war against the foreign forces and the Afghan regime in that time backed by the US. However, the Taliban resumed work on the TAPI following their victory and the escape of the then Afghan President Ashraf Ghani following the withdrawal of foreign forces from Afghanistan after 20 years of presence.

Taliban spokesman Zia Ahmad, said that Muttaqi and Murdov reaffirmed their commitment to expediting the TAPI project, expanding railway infrastructure, improving energy and transport services, and enhancing broader economic cooperation. He furthered that the technical teams will continue their engagements in Kabul and Ashgabat to achieve these objectives.

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