Tensions between South Korea and Japan are intensifying after Prime Minister Sinzo Abe administration imposed new restrictions on exports that could hit President Moon Jae-in country’ tech industry - Photo by SMCP

JAKARTA (TheInsiderStories) – Good morning! Tensions between South Korea and Japan are intensifying after Prime Minister Sinzo Abe administration imposed new restrictions on exports that could hit President Moon Jae-in country’ tech industry. The action triggered South Korea to boycott Japanese goods.

The recent tensions between the two countries stem from more than six decades. Dispute that were more triggered by the problems of forced labor during the war were considered to affect investment and loans by Japanese institutions. In the worst case scenario, Japanese lenders can refuse to roll over debt maturity or stop providing new loans.

In the United States (US), the latest economic data showed consumers raised their inflation expectations for the first time in three months. The easing of pressure eased pressure on central banks to cut interest rates significantly to support economic momentum.

The Federal Reserve of Bank of New York survey of consumer expectations showed the outlook for one-year inflation rose 0.2 percentage points to 2.7 percent. Three-year inflation expectations also rose by 2.7 percent. In May, the gauge had reached the lowest level since at least 2017.

From the European region, United Kingdom said, it had contacted Washington to express regret over the leaked secret memo in which its ambassador described US President Donald Trump’ government as “non-functioning” and “inappropriate”.

While from the Middle East, Iran threatened to restart centrifuges that were deactivated and increase enrichment of uranium to 20 percent purity because of the potential for the next big step of the 2015 nuclear agreement left by Washington last year.

The threat also put new pressure on European countries, which insist Iran must continue to comply with the agreement even though the United States is no longer doing it. French’ President Emmanuel Macron sent his top diplomatic advisors to Iran on Tuesday and Wednesday this week to try and help ease tensions.

In Indonesia, coordinating ministry for economic affairs requested that the application of the Minister of Trade Regulation Number 84 Year 2017 concerning Limiting Imports of Tobacco to be delayed. It said, this import restriction is still not needed because there is no availability of domestic substituted raw material.

With virginia tobacco dominating as much as 83 percent of tobacco imports per year, the development of tobacco import substitution should be focused on virginia tobacco compared to oriental and burley tobacco.

President Joko Widodo has signed Government Regulation Number 44 Year 2019 concerning the Addition of the State Capital Equity of of the Indonesian Eximbank on June 25 Rp2.5 trillion (US$176.06 million). The injection funds needed to increase business capacity, strengthen the capital structure of the lender, and also aims to support the national export program through National Export Financing including Special Assignments.

From the corporate side, Japan’ Mitsubishi Motors Corp and Mitsubishi Corp said that they will invest in GOJEK, an Indonesia’ ride-hailing company, to capitalize on its competitive advantage in the transportation business.

For the first time, state-owned energy producer, PT Pertamina exported 4,000 barrels of fluid from Balikpapan refinery, in East Kalimantan to Algeria using 27 gas carrier containers. Total export values more than Rp10 billion.

The product will be used in the process of drilling oil and gas wells at Algeria’ Menzel Ledjmet North Field, which is operated by its unit PT Pertamina Lubricants and the Petrochemical Trading team. The producer has the potential to face challenges similar to those occurring in the Mahakam Block, when it took over the Rokan Block from Chevron Pacific Indonesia in 2021.

Yesterday, the Jakarta Composite Index fell by 21.65 points or 0.34 percent to 6,351.83 at the close of trading. While, Rupiah against the US dollar closed down in spot market to the level of 14,105, or weakened 0.18 percent compared to trading at the end of last week.

US$1: Rp14,200

May you have a profitable day!

Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia