Stocks stable after tariff-fuelled selloff but uncertainty boosts gold

Asian equities stabilised Wednesday after a rough start to the week fuelled by Donald Trump’s Greenland-linked tariff threats, though uncertainty rattling through trading floors saw safe-haven precious metals hit fresh record highs.Japanese bond yields also settled back following Tuesday’s surge on the back of a pledge by Prime Minister Sanae Takaichi to cut taxes.The US president injected a fresh dose of volatility into markets Saturday after threatening to hit several European countries — including France, Germany, Britain and Denmark — with up to 25 percent tariffs over their opposition to his takeover of Greenland.The move has sparked a warning of retaliation, with French President Emmanuel Macron raising the possibility of deploying an unused, powerful instrument aimed at deterring economic coercion.And speaking at the Davos gathering in Switzerland, European Union chief Ursula von der Leyen warned Washington that hitting allied nations with punitive tariffs over Greenland would be a “mistake”.In response, US Treasury chief Scott Bessent said Monday that any retaliatory EU tariffs would be “unwise”.Markets have sunk globally this week, and Wall Street’s three main indexes tanked Tuesday as they reopened after a long weekend.But Asia saw a mixed performance in early trade Wednesday.Tokyo, Sydney, Singapore, Taipei and Manila fell, while Hong Kong, Shanghai and Jakarta rose. US futures advanced.However, concerns about the outlook and concerns the crisis could grow saw precious metals — a go-to in times of turmoil — continue to hit new peaks.Gold topped out at $4,836.80 and silver touched $95.89 an ounce.Eyes are now on Trump’s visit to the World Economic Forum at Davos later in the day.”Traders continue to monitor the prospects for an agreement around Trump’s claim on Greenland, alongside the ongoing pricing of risk that Trump subsequently raises tariffs on European imports… and whether Europe responds with impactful tariffs of its own,” wrote Chris Weston at Pepperstone.”The focus from traders now turns to Trump’s scheduled speech in Davos, but prior to that, the reaction and the ensuing price action through the Asian session.”Bond markets also saw some calm following Tuesday’s rally in Japanese yields to record highs after Takaichi called a snap election for February 8 and said she would suspend an eight percent sales tax on food and beverages for two years if she wins a fresh mandate.Her comments saw 40-year yields surge more than a quarter of a percentage point to a record on Tuesday, marking the biggest jump since Trump’s “Liberation Day” tariff bombshell in April.The moves saw US Treasury Secretary Scott Bessent call Japanese Finance Minister Satsuki Katayama following a lift in Treasury yields.But they fell back Wednesday after Katayama called for “everyone in the market to calm down” and highlighted rising tax revenues and the country’s lowest reliance on debt issuance in three decades.However, Katsutoshi Inadome at Sumitomo Mitsui Trust Asset Management warned: “Katayama’s comments will have some impact on the market, but these are not the type of moves that can be stopped with just verbal intervention.”Bonds will likely be bought today, but the upside momentum is likely to gradually fade.”- Key figures at around 0230 GMT -Tokyo – Nikkei 225: DOWN 0.6 percent at 52,693.43 (break)Hong Kong – Hang Seng Index: UP 0.2 percent at 26,536.78Shanghai – Composite: UP 0.4 percent at 4,131.77Euro/dollar: UP at $1.1729 from $1.1719 on TuesdayPound/dollar: UP at $1.3454 from $1.3433Dollar/yen: DOWN at 158.00 yen from 158.21 yenEuro/pound: DOWN at 87.18 pence from 87.23 penceWest Texas Intermediate: DOWN 1.0 percent at $59.75 per barrelBrent North Sea Crude: DOWN 1.2 percent at $64.18 per barrelNew York – Dow: DOWN 1.8 percent at 48,488.59 (close)London – FTSE 100: DOWN 0.7 percent at 10,126.78 (close)

What growth?: Taiwan’s traditional manufacturers miss out on export boom

Taiwan’s economy soared last year on skyrocketing exports of AI hardware and semiconductors, but companies in more traditional manufacturing sectors could only look on with envy as they were clobbered by US tariffs and a strong local currency.The island’s growth has for decades been based on overseas shipments of a range of goods including machinery, metals and chemicals, mostly small and medium-sized manufacturers employing thousands of workers. But the past 12 months saw companies in those sectors dealt a body blow as their goods sold into the United States were loaded with 20 percent levies as part of President Donald Trump’s global trade war, threatening people’s jobs.One area that was exempted, however, was semiconductor chips — a critical sector dominated by Taiwanese tech giant TSMC. That meant economic growth likely ballooned 7.4 percent last year, according to government estimates, which would be the fastest in 15 years.”We don’t really feel that growth,” Chris Wu, the sales director of machine toolmaker Litz Hitech Corp in Taiwan’s manufacturing hub of Taichung, told AFP. “Overall the data looks strong, but for traditional industries, and for our company in particular, exports have declined — we’re down 30 percent.” Trump initially announced a 32 percent tariff on Taiwanese exports, which was later lowered to 20 percent, as part of his sweep of measures against dozens of trade partners last April. A trade deal announced last week cut that again to 15 percent, in line with key manufacturing rivals South Korea and Japan. While it was good news for traditional manufacturers, Wu said it was not a panacea.- ‘Miserable’ – Overseas demand for Litz Hitech’s precision tools and processing machines hasn’t recovered, and a 15 percent tariff is still nearly three times the company’s profit margin.On top of that, Wu said, the Taiwan dollar was stronger than the won, yen and euro, meaning Taiwanese exports are more expensive.”I don’t think there is a single Taiwanese machine toolmaker that can negotiate to absorb (the tariff) in full — maybe two to three percent, but absorbing everything is impossible,” he said.”Our company can’t absorb even one percent.”Taiwan’s information and communication technology (ICT) sector, which includes semiconductor chips, has become by far the biggest driver of the island’s export-dependent economy. Data for last year laid bare the stark difference in fortunes for tech and more traditional industries, with ICT exports soaring, while metals, plastics and metal-cutting machine tools were all lower.  “Last year’s situation was miserable, very miserable,” Jerry Liu, chairman of the Taichung Importers and Exporters Chamber of Commerce, told AFP. Taiwan’s reliance on AI has left some experts worried about the economic impact if the bubble of excitement around the technology were to burst. “That’s dangerous,” said Chen Been-lon, a research fellow and professor in the Institute of Economics at Academia Sinica.”But what can you do? You cannot force people not to invest in semiconductors.”- ‘Gritting my teeth’ – Taiwan hopes its semiconductor industry remains protected from Trump’s tariffs after the trade deal with Washington committed Taiwanese chip and tech businesses to invest up to $500 billion on US soil. However, a potential US Supreme Court ruling against Trump’s power to apply levies could upend the agreement. “If it’s unconstitutional… the current negotiated result may need to be redone,” said Wu Meng-tao, an economist at the Taiwan Institute of Economic Research, raising the risk of tariffs on the ICT sector. Many in Taiwan’s traditional manufacturing sector, including Litz Hitech, have put employees on unpaid leave or reduced their working hours. Wu, the sales director, estimates thousands are affected.Conditions for small and medium-sized manufacturers could get tougher in 2026 if the US Federal Reserve cuts interest rates. The Taiwan dollar, which has pulled back from its highs last year, could come under renewed upward pressure. Liu said he was “gritting my teeth and holding on” — and hoping that the government helped to “stabilise the currency”. But manufacturers also needed to move with the times by adopting AI and offering customers “comprehensive solutions”, said Patrick Chen, chairman of the Taiwan Machine Tools and Accessory Builders’ Association.”Simply selling standalone machines or individual pieces of equipment is a business model of the past.”

Senegal’s ‘historic’ AFCON champs honoured with parade, presidential praiseWed, 21 Jan 2026 01:17:09 GMT

Senegal’s president congratulated the Lions of Teranga Tuesday for their “historic” victory in the Africa Cup of Nations final against Morocco, after tens of thousands of football fans crowded the streets of Dakar for a celebratory homecoming parade.The players and coaches brandished their trophy from an open-top bus for more than seven hours as they …

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US Supreme Court to hear Trump bid to fire Fed governor

The US Supreme Court hears arguments on Wednesday over President Donald Trump’s attempt to fire a Federal Reserve governor, a case which could have far-reaching consequences for the independence of the central bank.Trump sought in August to dismiss Fed governor Lisa Cook, a key official serving on the Fed’s interest rate-setting committee, accusing her of mortgage fraud. She denies the charges.The conservative-dominated Supreme Court barred Trump from immediately removing Cook, allowing her to remain in her post until it could hear the case contesting her dismissal.In a sign of the significance of the case and public support for Cook, Fed Chair Jerome Powell plans to personally attend Wednesday’s Supreme Court hearing, a source familiar with the matter told AFP.Powell’s expected appearance comes as the Trump administration intensifies its pressure campaign targeting the central bank, including the opening of a criminal investigation into the Fed chief.Earlier this month, Powell revealed that US prosecutors had launched an inquiry into him over an ongoing renovation of the Fed’s headquarters.Powell has dismissed the investigation as a politically motivated attempt to influence the central bank’s interest rate setting, and the heads of major central banks have thrown their support behind him.Trump’s bid to fire Cook, the first Black woman to serve on the central bank’s board of governors, and the probe into Powell are a dramatic escalation of the president’s efforts to control the Fed.Trump has repeatedly criticized the Fed for spurning his demands to slash interest rates more aggressively.By ousting Cook, the Republican president could potentially add another voice to the Fed’s board to try and shift interest rates in his favored direction.The case’s outcome could also determine if legal protections for the Fed — against political pressure — hold up, or if the president can take aim at members of the Fed’s leadership.Former Fed chiefs have recently warned that undermining central bank independence risks “highly negative consequences for inflation” and the functioning of economies.- ‘No cause exists’ -The Supreme Court has overwhelmingly sided with Trump since he returned to office, allowing mass firing of federal workers, the withholding of funds appropriated by Congress and racial profiling in his sweeping immigration crackdown.The court recently allowed Trump to fire members of other independent government boards, but created a carveout for the Fed in its ruling.Federal law says that Fed officials can only be removed for “cause,” which could be interpreted to mean malfeasance or dereliction of duty.”President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” Cook previously said in a statement.In his announcement that Cook would be removed, Trump pointed to a criminal referral from the Federal Housing Finance Agency’s director — a staunch ally of Trump — to the attorney general.The referral, Trump said, provided “sufficient reason” to believe that Cook might have made “false statements” on one or more mortgage agreements, allegedly claiming two primary residences, one in Michigan and another in Georgia.Cook has not been charged with a crime and the alleged false statements occurred before she was in her current position.Cook took office as a Fed governor in 2022 and was reappointed to the board in 2023.

UN report declares global state of ‘water bankruptcy’Wed, 21 Jan 2026 01:15:40 GMT

The world is entering an era of “global water bankruptcy” with rivers, lakes and aquifers depleting faster than nature can replenish them, a United Nations research institute said on Tuesday.It argues that decades of overuse, pollution, environmental destruction and climate pressure had pushed many water systems so beyond the point of recovery that a new …

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UN report declares global state of ‘water bankruptcy’

The world is entering an era of “global water bankruptcy” with rivers, lakes and aquifers depleting faster than nature can replenish them, a United Nations research institute said on Tuesday.It argues that decades of overuse, pollution, environmental destruction and climate pressure had pushed many water systems so beyond the point of recovery that a new classification was required.”Water stress and water crisis are no longer sufficient descriptions of the world’s new water realities,” read a new report by the UN University Institute for Water, Environment and Health (UNU-INWEH).These terms were “framed as alerts about a future that could still be avoided” when the world had already moved into a “new phase”, it said.The report proposes the alternative term “water bankruptcy” — a state in which long-term water use exceeds resupply and damages nature so severely that previous levels cannot realistically be restored.This was reflected in the shrinking of the world’s large lakes, the report said, and the growing number of major rivers failing to reach the sea for parts of the year. The world has lost enormous proportions of wetlands, with roughly 410 million hectares — nearly the size of the European Union — disappearing over the past five decades.Groundwater depletion is another sign of this bankruptcy.Around 70 percent of major aquifers used for drinking water and irrigation show long-term declines with rising “day zero” crises — when demand exceeds supply — the “urban face” of this new reality.Climate change was compounding the problem, spurring the loss of more than 30 percent of the world’s glacier mass since 1970 and the seasonal meltwater relied upon by hundreds of millions of people.- ‘Be honest’ -The consequences were visible on every inhabited continent, but not every country individually was water bankrupt, UNU-INWEH director and report author Kaveh Madani told AFP.Madani said the phenomenon was a “warning” that a policy rethink was essential.Instead of approaching water scarcity as something temporary, governments must “be honest” and “file for bankruptcy today rather than delaying this decision”, he said.”Let’s adopt this framework. Let’s understand this. Let us recognise this bitter reality today before we cause more irreversible damages,” Madani added.The report draws on existing data and statistics and does not provide an exhaustive record of all water problems, but attempts instead to redefine the situation.It is based on a peer-reviewed report, soon to be published in the journal Water Resources Management, that will formally propose a definition of “water bankruptcy”.The report “captures a hard truth: the world’s water crisis has crossed a point of no return”, Tim Wainwright, chief executive of the WaterAid charity, wrote in a statement.Some scientists not involved in the report welcomed the spotlight on water but warned that the global picture varied considerably and a blanket declaration might overlook progress being made at a local level.