Live News: Asia-Pacific shares fall after Powell’s rate hike comments

Chinese Embassy in Germany Confused Over Plan to Ban Huawei

China’s embassy in Germany has criticized plans to ban Huawei and ZTE from parts of the European country’s 5G network.

Germany’s federal interior ministry said on Tuesday that the government is reviewing security risks posed by components already installed in the country’s 5G networks.

German media have reported that the government plans to ban parts made by Chinese telecommunications groups Huawei and ZTE, which have played a large role in German communications networks.

“If the reports are true, China . . . Expresses its deep displeasure and deep puzzlement,” the embassy said on Tuesday evening.

Japan’s January current account deficit 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 exceeded markets’ forecasts for the month. This is the largest deficit recorded in the country in a month.

Officials blamed rising energy costs — as well as weak exports to China during the Lunar New Year holiday — for the record shortfall, as Asia’s second-largest economy relies heavily on fuel and raw material imports.

Asia-Pacific shares fall as Powell misleads investors

Asia-Pacific stocks retreated on Wednesday morning as investors spooked by dovish 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 on Hong Kong’s Hang Seng index fell 1.3 percent.

Powell warned on Tuesday that the Fed is poised to return to big interest rate hikes to fight inflation. His comments sent the two-year U.S. Treasury yield 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.

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What to see in Asia today

Jakarta: China and the Association of Southeast Asian Nations will discuss the South China Sea in the Indonesian capital, where tensions have risen amid overlapping territorial claims between several ASEAN member states and Beijing.

Revenue: Cathay Pacific publishes earnings. Hong Kong’s airport traffic has recovered from its pandemic slump, but the number of people passing through is still significantly below 2019 levels.

Markets: Stocks fell in Japan and futures were lower in Hong Kong. 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 quickly.

Elon Musk says Twitter may reach positive cash flow in the second quarter

Elon Musk says cost-cutting will cost Twitter about $3 billion a year © Reuters

Elon Musk said Twitter could post positive cash flow next quarter as the chief executive tries to cut costs, win back advertisers and navigate the platform’s technical woes.

Speaking at a Morgan Stanley investor conference on Tuesday, Musk said cash flow at the company, which he bought last year for $44bn, would break even in the second quarter, adding that it could even be positive in that period.

Twitter’s expenses are expected to be $3 billion a year, down from the $4.5 billion he said the company will pay in 2023.

Read more about Musk’s cost-cutting plans here.

Senators introduce bipartisan bill paving the way for 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 site TikTok.

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Mark Warner, the Democratic chairman of the Intelligence Committee, announced the bill on Tuesday as part of an effort to create a coordinated approach across the government to counter threats from countries including China, Russia and Iran.

The regulatory act requires the Secretary of Commerce to identify threats related to communications and information technology and develop solutions to address them.

Read more about the proposed bill here.

The two-year Treasury yield is at 5% for the first time since 2007

The two-year Treasury yield, moving in line with interest rate expectations, hit 5 percent for the first time since 2007.

The yield hit a peak of 5.01 percent — up 0.13 percentage points on the day — after Federal Reserve Chairman Jay Powell said on Tuesday that the U.S. central bank may be ready to accelerate the pace of interest rate hikes. Warmer-than-expected economic data.

Investors now expect interest rates to rise to 5.6 percent in September, with the possibility of a single cut in December.

Ukraine denies any involvement in the Nordstream pipeline explosions

A gas leak in the Nord Stream 2 pipeline seen in late September 2022
A gas leak at the Nord Stream 2 pipeline as seen in late September 2022 © Danish Defense/AFP via Getty Images

Ukraine has denied involvement in last year’s explosions that damaged the Nordstream gas pipeline linking Russia and Western Europe, after media reports in the US and Germany suggested pro-Ukrainian activists may be behind the attacks.

“Although I enjoy collecting funny conspiracy theories about the Ukrainian government, I have to say: the Baltic Sea accident has nothing to do with Ukraine and there is no information about ‘pro-Ukrainian sabotage groups,'” Mykhailo Podoliak, adviser to President Volodymyr Zelensky. , wrote.

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Podoliak responded to a report by The New York Times saying that US officials were reviewing new intelligence that a “pro-Ukrainian group” had carried out underwater bombings of both the Nordstream 1 and 2 pipelines.

Read more about the accused criminals here.

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