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Japan auto show returns, as industry faces EV turning point

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Tokyo’s auto show is back for the first time in four years and newly rebranded for the electric vehicle era, in a marketing overhaul that may be more reflective of industry aspirations than Japanese automakers’ lagging battery-powered lineup.

The Japan Mobility Show, which opens on Thursday, comes at a critical moment for the domestic industry. Toyota (7203.T), the world’s top-selling automaker, this year announced a strategic pivot to battery EVs, including plans to commercialize advanced batteries and adopt die-casting technology pioneered by Tesla (TSLA.O).

Toyota’s shift has helped silence criticism that it was too slow to embrace battery EVs. But the outlook is gloomier for some of its smaller rivals like Subaru (7270.T), Mazda (7261.T), and Mitsubishi Motors (7211.T) that may face a more daunting challenge in rolling out EVs, analysts say.

Meanwhile, China’s top automaker BYD (1211.HK) will be the first Chinese car maker to exhibit models at the show, and one of just three foreign auto manufacturers to do so, along with German brands Mercedes (MBGn.DE) and BMW.

And unlike many of the Japanese companies, who will be displaying concept cars, the foreign automakers will all show battery EVs that are already in production or are going to be in production.

There seems to be a “growing gap” between Japan’s stronger automakers, such as Toyota and Honda (7267.T) that are producing record profits, and weaker players, said Koji Endo, head of equity research at SBI Securities.

Japan’s auto industry is also facing pressure from high input costs and slumping sales in China, where Japanese brands such as Nissan (7201.T) and Mitsubishi, which reportedly has decided to end production there, have been hit harder than other non-Chinese makers.

Toyota will display various battery-powered concept models at the show, including a sport utility vehicle, mid-size pickup truck, and a sports car.

The world’s biggest automaker by sales has long advocated for a multi-pronged approach to reduce carbon emissions that includes other electrified and alternative energy options besides battery EVs.

The company will show new models of its Century and Crown series, which it has previously unveiled as plug-in hybrid and hybrid vehicles.

Nissan plans to display the battery-powered Ariya, Leaf, and Sakura models, in addition to new battery EV concept models such as a luxury minivan.

SHRINKING HOME MARKET

The biennial show was not held in 2021 because of the pandemic. This year, it will feature a range of mobility technologies including autonomous vehicles, motorbikes, trucks, and so-called “flying cars.”

Yet despite the bid to appeal to a wider audience, Japanese automakers are grappling with growing pressure from a rapidly aging and declining population that has fewer young people to buy cars, pressuring auto sales.

New registrations for passenger cars last year hit their lowest annual level on record, according to data from the Japan Automobile Manufacturers Association that goes back to 1993.

Registrations declined 6.2% in 2022 from the previous year to 3.4 million vehicles.

Nearly a third of Japan’s population of 124 million was aged 65 or older as of May 1, according to government data.

Last year was the third consecutive year that new car sales stayed below 4 million, though they were also hit by fallout from a post-pandemic chip shortage that disrupted auto production and supply.

In contrast to the darkening outlook in Japan, data from the ASEAN Automotive Federation shows that the auto market in Southeast Asia has been growing.

Passenger vehicle sales in seven Southeast Asian countries jumped 24% year-on-year to 2.2 million in 2022, the data showed, though Japanese automakers are battling against Chinese EV upstarts to maintain share in key markets like Thailand.

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Aussie job market defies expectations with stable 4.1% unemployment rate

Australia’s unemployment held at 4.1% in May amid job loss; full-time roles surged, underemployment fell, and female participation rose to 60.9%, keeping RBA cautious despite rate cut speculation.

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Australia’s unemployment held at 4.1% in May amid job loss; full-time roles surged, underemployment fell, and female participation rose to 60.9%, keeping RBA cautious despite rate cut speculation.


Australia’s unemployment rate held firm at 4.1% in May, despite a small drop of 2,500 jobs—falling short of forecasts.

But dig deeper: full-time jobs jumped by nearly 39,000, underemployment hit post-COVID lows, and female participation reached a record 60.9%.

With labour market resilience still strong, the Reserve Bank is unlikely to be swayed—though markets see an 80% chance of a July rate cut.

The RBA remains in a balancing act, cooling inflation, without choking growth.

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Central banks struggle with economic uncertainty and rates

Central banks face challenges amid economic uncertainty, impacting policy decisions and investor confidence worldwide.

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Central banks face challenges amid economic uncertainty, impacting policy decisions and investor confidence worldwide.

In Short:
Central banks are grappling with economic uncertainty, prompting various interest rate cuts globally to stimulate growth. Many central banks, including those in Norway, Sweden, and Japan, are adjusting rates in response to inflation and trade concerns, while others like the Federal Reserve and the Bank of England are considering future cuts.

Central banks are facing significant uncertainty concerning economic growth and inflation, making their policy decisions increasingly challenging as they approach the end of their rate-cutting cycles.

This uncertainty is also impacting investors. Recently, Norway’s central bank surprised markets with an interest rate cut, while the U.S. Federal Reserve cautioned against relying heavily on its policy projections.

The Swiss National Bank responded to decreasing inflation and economic unpredictability by reducing its benchmark rate to 0% but may consider further cuts. The Bank of Canada has maintained its rate at 2.75%, suggesting a potential future cut in light of tariffs affecting the economy.

Sweden’s central bank cut its key rate as well, aiming to stimulate growth amid weak price pressures.

In New Zealand, expectations are for rates to remain steady after a recent reduction to protect its economy from global trade uncertainties. The European Central Bank has also cut rates, considering further adjustments to meet inflation goals.

The Federal Reserve is keeping rates steady, although further cuts are anticipated due to low inflation. In Britain, the Bank of England held rates but may continue cuts in response to weak labour indicators.

The Reserve Bank of Australia is prepared for rate cuts due to weak growth data and trade tensions, while Norway’s central bank has been cautious with its recent decision. The Bank of Japan remains the only bank in a tightening phase, balancing escalating tensions and tariff concerns with its monetary policies.

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Fed signals slower cuts amid rising risks

U.S. Federal Reserve revises economic forecasts downward, expecting growth slowdown and higher unemployment, but still plans rate cuts in 2024 and 2025.

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U.S. Federal Reserve revises economic forecasts downward, expecting growth slowdown and higher unemployment, but still plans rate cuts in 2024 and 2025.


At its latest meeting, the U.S. Federal Reserve revised its economic forecasts downward, with growth trimmed, inflation nudged up, and unemployment expectations now higher.

Despite this gloomier outlook, the Fed still sees two rate cuts in 2025, but just one in 2024 and one in 2026, a major dial-back from earlier projections.

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