The Middle East is unstable due to the Israel-Hamas war and mounting tension between Israel and Iran, while the power conflict between the USA and China continues. All these events impact the Asian economic scenario, and the consequences are significant.
Japanese Companies Pushing To Expand Into US Markets
Many countries want to capitalise on this opportunity amid the growing tensions between China and the USA. One such country is Japan, where many companies are creating growth plans to enter the US market.
Many Japanese companies have expressed interest in expanding into the US market and increasing their profits. Some of the companies include beverage company Asahi, car manufacturer Honda, robotics company Yaskawa Electric, and chipmaker Renesas Electronics.
Moreover, the Japanese prime minister, Fumio Kishida, has suggested that the world should decrease their dependency on the Chinese supply chain. He discussed this with the US government on his recent tour to the USA.
The Japanese government wants to expand its automaker, chip, Nippon Steel, and robotics sectors. Japanese car manufacturers have to push really hard because their sales in the Chinese market dropped after home-grown Chinese car manufacturer BYD started gaining traction.
LNG Prices In Asia Surge Amid Tension In The Middle East
The escalating tension in the Middle East and the subsequent retaliation from the Israeli forces on Iran has created a vacuum of uncertainty in the region. This uncertainty has surged the prices of LNG (Liquified Natural Gas) in Asia to their highest since early January. The North Asian spot rate exceeded $11/million btu from $8/million btu in early January, which is a 40% increase in the rates. Moreover, half of the volume from the US LNG export facility gas flow has been cut, creating a shortage of LNG in the region. The tension in the region had recently pushed the oil prices up, too, and now it’s time for LNG.
However, the most significant danger to the LNG supply chain is that Iran has blocked the Strait of Hormuz. This can decrease the global LNG supply by 20% and increase the prices to a whopping $100/million btu, which can be devastating for Asia and Europe.
