2025-09-09 06:00

Sept 9 (Reuters) - Freeport-McMoRan (FCX.N) , opens new tab said on Tuesday it temporarily halted mining in Indonesia's Grasberg minerals district after a large flow of wet material blocked access to parts of its underground mine, restricting evacuation routes for seven workers. The incident occurred late on Monday at one of five production blocks in the Grasberg Block Cave underground mine in Central Papua, the company said. Sign up here. The location of the seven workers is known and they are believed to be safe, Freeport said, adding that rescue crews are working to clear the area for a safe and swift evacuation. Freeport operates Grasberg, one of the world's largest gold and copper mines, and had been building a smelter in Indonesia. The smelter was damaged by a fire last year and was shut down. https://www.reuters.com/business/energy/freeport-halts-indonesias-grasberg-mining-operations-after-underground-incident-2025-09-09/

2025-09-09 05:54

Politics won't derail BOJ rate hike plan but may affect timing Takaichi, proponent of low rates, seen frontrunner in LDP race Rising inflation may prod Takaichi to water down stimulus calls Fiscal stimulus, yield spike may affect BOJ's QT, rate hike plan TOKYO, Sept 9 (Reuters) - The appointment of a new Japanese prime minister next month could give the central bank more reasons to go slow on its next interest rate hike, especially if the next leader is wary of seeing borrowing costs rise too quickly. While the Bank of Japan's main concern remains domestic inflation and the economic hit from U.S. tariffs, uncertainty around who becomes next leader or what their policies might be adds a layer of risk to deliberations around monetary settings. Sign up here. Prime Minister Shigeru Ishiba announced his decision to resign on Sunday after a string of election defeats including a July upper house poll. The focus has now shifted to who will replace him. Japanese bond yields fell on Tuesday on reports Sanae Takaichi, a proponent of government stimulus and monetary easing, would run in the Liberal Democratic Party's leadership race in October, which could make her the next prime minister. "The resignation of Japan's prime minister Ishiba and the unfolding leadership contest at the ruling LDP will likely deter the Bank of Japan from raising rates in October," analysts at Evercore ISI wrote in a research note, adding they were pushing back their call for the next hike provisionally to January. The departure of Ishiba, seen as a fiscal hawk who gave a nod to gradual BOJ rate hikes, pushed down the yen and bond yields as investors reduced bets of a near-term rate hike. Money markets now show about a 20% chance the BOJ will hike rates by the end of October, down from 46% odds a week ago. The LDP will choose his successor in a vote on October 4, who will then seek parliament approval to become head of government. A new administration may not be formed until mid-October, creating an uneasy political vacuum ahead of the BOJ's policy meeting on Oct. 29-30. While the wider political uncertainty won't derail the BOJ's plan to continue raising rates gradually, it could affect the timing of the next hike, said three sources familiar with its thinking. "The BOJ doesn't need to hike in the midst of turbulence," one of the sources said. "It is in no rush and has a free hand on the timing, as long as it gets another rate hike done possibly by early next year." "The key is whether the hit from U.S. tariffs on Japan's economy would be within expectations, rather than what happens with politics," another source said on the rate-hike timing. FISCAL COMPLICATIONS Who wins the race will also have a significant impact on the pace and timing of BOJ rate hikes, analysts say. Conservative lawmaker Takaichi is one of the frontrunners and previously a strong advocate of "Abenomics"-style mix of fiscal and monetary stimulus of deceased premier Shinzo Abe. She stands out for her criticism of the BOJ's rate hikes. Another contender is Shinjiro Koizumi, a proponent of deregulation whose views on monetary policy are little known. Both were top candidates in the LDP leadership race in September 2024 with Takaichi winning the most votes in the first round, only to be defeated by Ishiba in the run-up. There is uncertainty on whether Takaichi will do as well this time, with some of her political backers having lost their jobs or clout due to a scandal that hit the former Abe faction. Even if she wins, Takaichi may need to water down calls for ultra-low rates with rising inflation, rather than the risk of deflation, now a bigger problem for the public, analysts say. "Support for reflationist-minded lawmakers has shrunk within the LDP. As such, Takaichi will need to restrain her calls for reflationist policies to some extent to win broad support within the party," said BNP Paribas chief Japan economist Ryutaro Kono. Whoever ends up winning the leadership race would ultimately run a minority coalition and need support from opposition parties to pass the budget through parliament. Small opposition parties seen as candidates for forming an alliance are against an early BOJ rate hike, or have called on the central bank to tread carefully in rolling back stimulus. While politics may create hurdles for a near-term rate hike, growing calls from most candidates and opposition parties for bigger spending could require the BOJ to lift rates over the longer-term to tame inflationary pressures. The worst-case scenario for policymakers would be a sustained, sharp rise in bond yields triggered by investors' concern over Japan's loss of fiscal discipline. In such an event, the government may pressure the BOJ to halt its quantitative tightening (QT) plan and step into the market with emergency bond purchases, some analysts say. Such a move would be a major setback in the BOJ's efforts, which began last year, to gradually taper its huge bond buying. All this would give the BOJ reason to sit on the sidelines until the political dust settles. But waiting too long also carries risks. Inflation has held above the BOJ's 2% target for three years, and price pressures have broadened beyond stubbornly high food costs as a tight labour market pushes up wages. "The BOJ must be cautious. But it also understands that waiting too long is not without risk," a third source said. https://www.reuters.com/business/ishibas-departure-gives-boj-pause-thought-rate-hikes-2025-09-09/

2025-09-09 05:48

MEXICO CITY, Sept 8 (Reuters) - Mexico expects its budget deficit to fall slightly in 2026 to 4.10%, as GDP growth is seen ticking up, the finance ministry said on Monday in the government's budget proposal. The government has been under pressure to narrow the deficit, which it now expects will close 2025 at 4.32%, while maintaining a pledge to boost social programs and shore up the finances of highly indebted state oil firm Pemex. Sign up here. The government also forecast Latin America's second-largest economy to expand between 1.8% and 2.8% - an increase of 1.3 percentage points on both ends of the range. That is rosier than both the IMF's growth forecast, which sees a 1.4% expansion in 2026, and the Bank of Mexico's most recent forecast of 1.1% growth. The ministry also put its inflation forecast for end-2026 at 3.0%, meeting the target set by the Bank of Mexico, which sees inflation converging to target in the third quarter next year. Pemex is slated to receive some 263.5 billion Mexican pesos ($14.14 billion) from the government in 2026 to help the firm meet its debt and loan payments, according to the document. After President Claudia Sheinbaum said last week that her government was considering imposing tariffs on countries such as China that have no trade agreement with Mexico, the budget proposal said the country's 'General Import Tax' would be reviewed for 2026 to encourage national development, without giving any detail. The draft budget also announced new "healthy taxes" to serve as disincentives for unhealthy products, which would boost taxes on products like soft drinks, video games, and nicotine pouches. The budget proposal will now be debated by lawmakers in Congress, where Sheinbaum's party and its allies hold strong majorities in both chambers. ($1 = 18.6348 Mexican pesos) https://www.reuters.com/world/americas/mexico-sees-budget-deficit-lower-2026-growth-ticks-up-2025-09-09/

2025-09-09 05:34

Investors await preliminary U.S. jobs data revisions Traders increase bets on jumbo 50-bp Fed rate cut Bank Indonesia said to have intervened to stabilise market SINGAPORE, Sept 9 (Reuters) - The dollar sank to an almost seven-week low on Tuesday as investors braced for U.S. data revisions that could show the jobs market in worse shape than initially thought, shoring up the case for even deeper Federal Reserve interest rate cuts. The dollar index fell to lows of 97.323 in Asia trade, representing the weakest level for the greenback since July 24, ahead of the release of preliminary benchmark revisions , opens new tab for jobs data covering the period from April 2024 to March 2025. Sign up here. Economists anticipate a downward revision of as much as 800,000 jobs, which could signal that the Fed is behind the curve in efforts to achieve maximum employment. "The employment numbers are getting worse and worse at a heavy rate," said Alex Hill, managing director at Electus Financial in Auckland. "That's translating into a weaker U.S. dollar slowly, but we expect that to accelerate." Advisors to the Trump administration are preparing a report laying out the alleged shortcomings of the Bureau of Labor Statistics, which they may publish in coming weeks, The Wall Street Journal , opens new tab reported on Tuesday, citing unnamed sources. Last month U.S. President Donald Trump fired BLS Commissioner Erika McEntarfer, accusing her, without evidence, of faking the employment data. U.S. bond investors say they are seeing cracks emerging in the outlook, warning the market is underpricing long-term fiscal risks and the danger posed by White House pressure on the central bank to cut interest rates. Traders' expectations of more aggressive Fed easing are gradually increasing. Pricing of Fed funds futures on Tuesday implied an 11.6% probability of a jumbo 50 basis point rate cut at the Fed's September meeting, compared with an 11% chance on Monday, according to the CME Group's FedWatch tool, with a cut of at least 25 basis points viewed as a certainty. Gold set a new record high, up as much as 0.5% to $3,656.92. The euro appreciated 0.1% in Asia hours, trading to as much as $1.1778 , the strongest level since July 24. Its appreciation was restrained as France's parliament brought down the government on Monday over plans to tame ballooning national debt, deepening a political crisis that is weakening the euro zone's second-largest economy. The European Central Bank is widely expected to hold rates at its policy meeting on Thursday. Analysts from ING said they expected limited spillover to European financial markets, as "the hurdle for pricing in more European Central Bank easing is high." The yen strengthened against the dollar, reversing weakness from Monday after Prime Minister Shigeru Ishiba resigned. The currency was 0.3% stronger at 147.125 yen and speculation turned to who could succeed him. "There may be growing expectations that macroeconomic policy could tilt toward easing among foreign investors in particular," analysts from Morgan Stanley MUFG Securities wrote in a research note. "Regardless of the political situation, if weak U.S. economic data—including employment data—continue, the bar for the BOJ to raise rates will likely become higher." The Indonesian rupiah weakened 0.8% after the government replaced its finance minister on Monday. Bank Indonesia , opens new tab was seen buying longer-dated government bonds on Tuesday in an attempt to stabilise the market, according to two traders. The Australian dollar fetched $0.6606 , up 0.2% in early trade, while the kiwi traded 0.2% higher at $0.5949 . The offshore yuan traded 0.1% stronger at 7.1193 yuan per dollar , while sterling traded at $1.3576 , up 0.2% so far on the day. https://www.reuters.com/world/middle-east/dollar-hits-7-week-low-jobs-gloom-heightens-fed-cut-chances-2025-09-09/

2025-09-09 05:24

Investors worry fiscal discipline could erode Rupiah sinks over 1%, prompting central bank intervention Indo stocks drop 1.6% led by banking stocks Spotlight will be on new finance minister's policies SINGAPORE, Sept 9 (Reuters) - The abrupt removal of Indonesia's influential finance minister Sri Mulyani Indrawati has stunned markets, as investors fear the hard-fought fiscal credibility could be eroded by the populist and costly spending plans under President Prabowo Subianto. The news of the finance minister's removal sent the rupiah tumbling over 1% on Tuesday, prompting Bank Indonesia to intervene in a bid to stabilize the currency. The rupiah was last 0.9% weaker at 16,440 per U.S. dollar. Jakarta stocks (.JKSE) , opens new tab also sank 1%, with banking stocks the biggest drag. Sign up here. Indonesia's central bank was also active in the bond market, buying longer-dated government bonds in an attempt to stabilise the market, two traders told Reuters. Global investors have viewed Sri Mulyani, one of Indonesia's longest-serving finance ministers in three different stints, as crucial to their bets in Southeast Asia's biggest economy and her previous departures sent markets tumbling. "Mulyani was the safeguard of prudent fiscal policy," said Hasnain Malik, EM equity and geopolitics strategist at Tellimer. "Her departure will stir up fears of widening deficits under an unconstrained and, after the protests, under-pressure Prabowo." The move to replace Sri Mulyani with Purbaya Yudhi Sadewa, an economist who has promised accelerated growth, comes at a delicate time for Indonesia as it grapples with widespread protests and unrest that have raged for two weeks. Calls for a fairer taxation system have erupted as Prabowo faces the biggest challenge of his presidency so far while his flagship free meals programme that seeks to provide meals to over 80 million Indonesians has struggled in its first year. "IDR may have to bear the brunt ... until greater confidence about what the cabinet reshuffle entails for any prospective shifts in budgetary outlays and funding sources," said Aninda Mitra, head of Asia macro strategy at BNY Investment Institute. "Market participants will want certainty about policy settings and a steady hand at the fiscal till." NEW FINANCE MINISTER'S CHALLENGES Sri Mulyani has won plaudits for reforming the taxation system and is widely considered the lynchpin behind improving Indonesia's fiscal performance in the past decade and winning investor approval. That fiscal prudence though has been at odds with Prabowo's spending plans and the challenge now lies with the new finance minister to find room in the budget to accommodate the president's wishes and tackle growing economic worries. "To afford the lunch program, she (Mulyani) had to make the difficult decision of cutting expenditure very aggressively to maintain fiscal sustainability," said Trinh Nguyen, senior economist for emerging Asia at Natixis. Purbaya told reporters the president's target of 8% economic growth was "not impossible" and that he would find ways to quickly boost the economy and push for more involvement of both the private sector and the government. "The issue is how is the new FM going to afford the 1.5% of GDP lunch program and raise spending for sectors such as defence without punching a larger hole in the deficit," Nguyen said. "For investors, that will be a key concern. Beyond the rupiah market, investors were also keeping tabs on Indonesia's international bonds which fell on Monday. The focus is on whether Sri Mulyani's departure could force an exodus of global investors, although their exposure has drastically reduced in the past decade. Foreigners hold less than 14% of outstanding Indonesian government securities, down from around a quarter back in December 2020, with the high-yielding bond market notoriously volatile during Indonesia's previous episodes of skyrocketing inflation. With foreign exchange reserves at $150.7 billion at the end of August, down from the $152 billion a month earlier, suggesting ample firepower for the central bank to defend the currency in the near term. "Bank Indonesia will continue to be present in the market to maintain exchange rate stability and sufficient liquidity of the rupiah," said Erwin Gunawan Hutapea, the central bank's head of monetary management. https://www.reuters.com/world/asia-pacific/indonesian-finance-ministers-removal-unnerves-investors-rupiah-sinks-2025-09-09/

2025-09-09 05:12

SINGAPORE, Sept 9 (Reuters) - The use of alternative fuels in shipping will accelerate after 2030 as tighter emissions standards come into effect, in contrast to the stop-start transition for now, shipping executives told the APPEC conference in Singapore on Tuesday. The take-off in this decade is expected to be gradual as shipping companies grapple with factors such as trade volatility and geopolitical uncertainty, but gains are expected in the following 10 years. Sign up here. "Between 2030 and 2040, I think this is where we're going to see the real kind of volume shift to low carbon fuels," said Emma Mazhari, CEO at Maersk Oil Trading (MAERSKb.CO) , opens new tab. Regulations including the European emissions trading scheme and maritime fuel standards are driving the shift, Mazhari said. "We can already see now when we bunker in Europe, there is increased supply of low carbon fuel ... so there's definitely a lot of change coming," she said. Because of the expected shift, Maersk is no longer investing in single-fuel ships. "If we invest in new assets now, they have to be dual-fuel, so that we have the optionality also to make sure that we can recoup the investments on a long-term scale," Mazhari said. Takeshi Hashimoto, CEO of Japan's second-largest shipping company Mitsui O.S.K. Lines (MOL) (9104.T) , opens new tab told the conference that over the next five to 10 years, shipping companies will focus first on reducing emissions through "proven products" like LNG and methanol. MOL is also aggressively exploring the use of wind power to assist ship propulsion systems, he said. Hashimoto added that shipping decarbonisation has been going through a "stop and go" currently, though the development of low-carbon marine fuels like green ammonia, green methanol and biomethane will be an imperative for the industry over the longer term. The shipping industry has been exploring lower-carbon alternative fuels to reduce its reliance on oil as it tries to meet carbon emission reduction targets set out by the U.N.'s International Maritime Organization. An executive from Tata NYK Shipping said regardless of geopolitical volatility, decarbonisation needs to be a priority. "Decarbonisation as a necessity and a strategy for shipowners will be there despite whatever we are hearing from the White House," said Amitabh Panda, managing director at Tata NYK Shipping, a joint venture between India's Tata Steel (TISC.NS) , opens new tab and Japan's NYK Line (9101.T) , opens new tab. But he acknowledged that the shifting geopolitical landscape complicates corporate decision making. "We are not very sure when and how much to invest, so the capital allocation becomes an issue." https://www.reuters.com/sustainability/climate-energy/alternative-marine-fuels-uptake-will-speed-up-after-2030-shipping-executives-say-2025-09-09/