Tag Archives: EASIA

Honda to start producing new hydrogen fuel cell system co-developed with GM

TOKYO, Feb 2 (Reuters) – Japan’s Honda Motor Co (7267.T) said it will start producing a new hydrogen fuel cell system jointly developed with General Motors Co (GM.N) this year and gradually step up sales this decade, in a bid to expand its hydrogen business.

Honda will target annual sales of around 2,000 units of the new system in the middle of this decade, the company said on Thursday, aiming to boost that to 60,000 units per year in 2030.

The Japanese carmaker is seeking to expand the use of its new system not only for its own fuel cell electric vehicles (FCEVs), but also commercial vehicles such as heavy trucks, as stationary power stations and in construction machinery.

Honda will start production of the hydrogen fuel cell system through its joint venture with GM this year, Honda senior managing executive director Shinji Aoyama told reporters during a company event in Tokyo.

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With the “next-generation” system, the company aims to more than double durability compared with its older fuel cell system and to bring costs down by two-thirds.

“While commercial vehicles are in use all over the world, they’ll likely see electrification just as with passenger cars,” said Tetsuya Hasebe, general manager of Honda’s hydrogen business development division.

That would likely lead to a divergence in trucks using batteries and those running on fuel cells, he added.

Reporting by Daniel Leussink; Editing by Chang-Ran Kim and Jamie Freed

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Philippines grants U.S. greater access to bases amid China concerns

  • Philippines, U.S. agree to add four locations under EDCA
  • Agreement comes amid tensions in South China Sea, over Taiwan
  • EDCA allows U.S. access to Philippine military bases

MANILA, Feb 2 (Reuters) – The Philippines has granted the United States expanded access to its military bases, their defence chiefs said on Thursday, amid mounting concern over China’s increasing assertiveness in the disputed South China Sea and tensions over self-ruled Taiwan.

Washington would be given access to four more locations under the 2014 Enhanced Defense Cooperation Agreement (EDCA), U.S. Defense Secretary Lloyd Austin and Philippines’ Defense Secretary Carlito Galvez said in a joint news conference.

Austin, who was in the Philippines for talks as Washington seeks to extend its security options in the country as part of efforts to deter any move by China against self-ruled Taiwan, described Manila’s decision as a “big deal” as he and his counterpart reaffirmed their commitment to bolstering their countries’ alliance.

“Our alliance makes both of our democracies more secure and helps uphold a free and open Indo-Pacific,” said Austin, whose visit follows U.S. Vice President Kamala Harris’s trip to the Philippines in November, which included a stop at Palawan in the South China Sea.

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“We discussed concrete actions to address destabilising activities in the waters surrounding the Philippines, including the West Philippine Sea, and we remain committed to strengthening our mutual capacities to resist armed attack,” Austin said.

“That’s just part of our efforts to modernize our alliance. And these efforts are especially important as People’s Republic of China continues to advance its illegitimate claims in the West Philippine Sea,” he added.

The additional locations under the EDCA bring to nine the number of military bases the United States would have access to, and Washington had announced it was allocating more than $82 million toward infrastructure investments at the existing sites.

The EDCA allows U.S. access to Philippine military bases for joint training, pre-positioning of equipment and the building of facilities such as runways, fuel storage and military housing, but not a permanent presence.

Austin and Galvez did not say where the new locations would be. The former Philippine military chief had said the United States had requested access to bases on the northern land mass of Luzon, the closest part of the Philippines to Taiwan, and on the island of Palawan, facing the disputed Spratly Islands in the South China Sea.

There was no immediate comment from the Chinese Embassy in Manila.

Outside the military headquarters, dozens of protesters opposed to the United States maintaining a military presence in the country chanted anti-U.S. slogans and called for the EDCA to be scrapped.

Before meeting his counterpart, Austin met with Philippine President Ferdinand Marcos Jr at the presidential palace on Thursday, where he assured the Southeast Asian leader, “we stand ready to help you in any way we can”.

Ties between the United States and the Philippines, a former colony, were soured by predecessor Rodrigo Duterte’s overtures towards China, his famous anti-U.S. rhetoric and threats to downgrade their military ties.

But Marcos has met with U.S. President Joe Biden twice since his landslide victory in the elections last year and reiterated he cannot see a future for his country without its longtime treaty ally.

“I have always said, it seems to me, the future of the Philippines and for that matter the Asia Pacific will always have to involve the United States,” Marcos told Austin.

Reporting by Karen Lema
Editing by Ed Davies and Gerry Doyle

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North Korea says U.S. drills have pushed situation to ‘extreme red-line’ -KCNA

SEOUL, Feb 2 (Reuters) – North Korea’s Foreign Ministry said on Thursday that drills by the United States and its allies have pushed the situation to an “extreme red-line” and threaten to turn the peninsula into a “huge war arsenal and a more critical war zone.”

The statement, carried by state news agency KCNA, said Pyongyang was not interested in dialogue as long as Washington pursues hostile policies.

“The military and political situation on the Korean peninsula and in the region has reached an extreme red-line due to the reckless military confrontational maneuvers and hostile acts of the U.S. and its vassal forces,” an unnamed ministry spokesperson said in the statement.

In Washington, the White House rejected the North Korean statement and reiterated a willingness to meet with North Korean diplomats “at a time and place convenient for them.”

“We have made clear we have no hostile intent toward the DPRK and seek serious and sustained diplomacy to address the full range of issues of concern to both countries and the region,” said a spokesperson for the White House National Security Council.

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The North Korean statement cited a visit to Seoul this week by U.S. Defense Secretary Lloyd Austin. On Tuesday Austin and his South Korean counterpart vowed to expand military drills and deploy more “strategic assets,” such as aircraft carriers and long-range bombers, to counter North Korea’s weapons development and prevent a war.

“This is a vivid expression of the U.S. dangerous scenario which will result in turning the Korean peninsula into a huge war arsenal and a more critical war zone,” the North Korean statement said.

North Korea will respond to any military moves by the United States, and has strong counteraction strategies, including “the most overwhelming nuclear force” if necessary, the statement added.

More than 28,500 American troops are based in South Korea as a legacy of the 1950-1953 Korean War, which ended in an armistice rather than a peace treaty.

“We reject the notion that our joint exercises with partners in the region serve as any sort of provocation. These are routine exercises fully consistent with past practice,” the White House statement said.

Last year, North Korea conducted a record number of ballistic missile tests, which are banned by United Nations Security Council resolutions. It was also observed reopening its shuttered nuclear weapons test site, raising expectations of a nuclear test for the first time since 2017.

In New York, South Korea’s foreign minister, Park Jin, met with the United Nations Secretary-General Antonio Guterres on Wednesday and called for the U.N.’s continued attention to North Korea’s recent provocations and efforts to implement sanctions on the reclusive regime.

Guterres said any resumption of nuclear testing by North Korea would deal a devastating blow to regional and international security, and reaffirmed support to build lasting peace on the Korean peninsula, according to Park’s office.

Park is on a four-day trip to the United States, which will include a meeting with U.S. Secretary of State Antony Blinken in Washington on Friday.

On Wednesday the United States and South Korea carried out a joint air drill with American B-1B heavy bombers and F-22 stealth fighters, as well as F-35 jets from both countries, according to South Korea’s Defense Ministry.

“The combined air drills this time show the U.S.’ will and capabilities to provide strong and credible extended deterrence against North Korea’s nuclear and missile threats,” the Defense Ministry said in a statement.

Reporting by Josh Smith; Additional reporting by Soo-hyang Choi and Steve Holland; Editing by Jonathan Oatis, Bill Berkrot and Gerry Doyle

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Austin’s Manila visit to bring deal on expanded base access – Philippines official

WASHINGTON/MANILA, Feb 1 (Reuters) – U.S. Defense Secretary Lloyd Austin’s visit to the Philippines this week is expected to bring an announcement of expanded U.S. access to military bases in the country, a senior Philippines official said on Wednesday.

Washington is eager to extend its security options in the Philippines as part of efforts to deter any move by China against self-ruled Taiwan, while Manila wants to bolster defense of its territorial claims in the disputed South China Sea.

Austin arrived in Manila on Tuesday night, and will meet his Philippine counterpart and other officials on Thursday “to build on our strong bilateral relationship, discuss a range of security initiatives, and advance our shared vision of a free and open Pacific,” he said on Twitter.

On Wednesday morning, Austin visited U.S. troops stationed at a Philippine military camp in the southern city of Zamboanga, according to Roy Galido, commander of the Western Mindanao Command.

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“Our working relationship to them is very strong,” Galido told reporters, adding that U.S. troops help in counter terrorism, and humanitarian and disaster response missions.

U.S. officials have said Washington hopes for an access agreement during Austin’s visit, which began on Tuesday, and that Washington has proposed additional sites under an Enhanced Defense Cooperation Agreement (EDCA) dating back to 2014.

“There’s a push for another four or five of these EDCA sites,” the a senior Philippines official said. “We are going to have definitely an announcement of some sort. I just don’t know how many would be the final outcome of that.”

The official declined to be named because of the sensitivity of the matter.

Manila and Washington have a mutual defense treaty and have been discussing U.S. access to four additional bases on the northern land mass of Luzon, the closest part of the Philippines to Taiwan, as well as another on the island of Palawan, facing the disputed Spratly Islands in the South China Sea.

EDCA allows U.S. access to Philippine bases for joint training, pre-positioning of equipment and building of facilities such as runways, fuel storage and military housing, but not a permanent presence. The U.S. military already has access to five such sites.

The Philippines official said increased U.S. access needed to benefit both countries.

“We don’t want it to be directed to just for the use of the United States purely for their defense capabilities … it has to be mutually beneficial,” he said.

“And obviously, we want to make sure that no country will see … anything that we’re doing … was directed towards any conflict or anything of that sort,” he added.

Manila’s priorities in its agreements with Washington were to boost its defense capabilities and interoperability with U.S. forces and to improve its ability to cope with climate change and natural disasters, the official said.

He said that after cancelling an agreement for the purchase of heavy-lift helicopters from Russia last year, Manila had reached a deal with Washington to upgrade “a couple” of Blackhawk helicopters that could be used for disaster relief.

“The deal with Russia was very attractive because for a certain budget we were able to get something like 16 of these heavy-lift helicopters,” the official said. “Now with the United States, obviously their helicopters are more expensive, so we’re looking at how we can fit in the budget that we’ve had.”

Gregory Poling, a Southeast Asia expert at Washington’s Center for Strategic and International Studies think tank, said access to sites in northern Luzon would help U.S. efforts to deter any Chinese move against Taiwan by putting the waters to the south of the island within range of shore-based missiles.

He said the U.S. and Philippine marines were pursuing similar capabilities with ground-based rockets, with Manila’s particular interest being to protect its South China Sea claims.

The Philippines is among several countries at odds with China in the South China Sea and has been angered by the constant presence of vessels in its exclusive economic zone it says are manned by Chinese militia. China is also Manila’s main trading partner.

Reporting by David Brunnstrom; additional reporting by Idrees Ali in Washington and Neil Jerome Morales and Karen Lema in Manila; Editing by Gerry Doyle

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Western allies differ over jets for Ukraine as Russia claims gains

  • Biden says ‘no’ when asked about F-16s for Ukraine
  • Zelenskiy says Moscow seeks ‘big revenge’
  • Russian administrator claims foothold in Vuhledar
  • Kyiv could recapture ground when Western weapons arrive – group

KYIV, Jan 31 (Reuters) – Ukraine’s defence minister is expected in Paris on Tuesday to meet President Emmanuel Macron amid a debate among Kyiv’s allies over whether to provide fighter jets for its war against Russia, after U.S. President Joe Biden ruled out giving F-16s.

Ukraine planned to push for Western fourth-generation fighters like F-16s after securing supplies of main battle tanks last week, an adviser to Defence Minister Oleksiy Reznikov said on Friday.

Asked at the White House on Monday if the United States would provide F-16s, Biden told reporters: “No.”

But France and Poland appear to be willing to entertain any such request from Ukraine, with Macron telling reporters in The Hague on Monday that “by definition, nothing is excluded” when it comes to military assistance.

In remarks carried on French television before Biden spoke in Washington, Macron stressed any such move would depend on several factors including the need to avoid escalation and assurances that the aircraft would not “touch Russian soil.” He said Reznikov would also meet his French counterpart Sebastien Lecornu in Paris on Tuesday.

In Poland on Monday, Prime Minister Mateusz Morawiecki also did not rule out a possible supply of F-16s to neighbouring Ukraine, in response to a question from a reporter before Biden spoke.

Morawiecki said in remarks posted on his website that any such transfer would take place “in complete coordination” with NATO countries.

Andriy Yermak, head of the Ukraine president’s office, noted “positive signals” from Poland and said France “does not exclude” such a move in separate posts on his Telegram channel.

NATO Secretary-General Jens Stoltenberg was in Japan on Tuesday where he thanked Tokyo for the “planes and the cargo capabilities” it is providing Ukraine. A day earlier in South Korea he urged Seoul to increase its military support to Ukraine.

Biden’s comment came shortly after Ukrainian President Volodymyr Zelenskiy said Russia had begun exacting its revenge for Ukraine’s resistance to its invasion with relentless attacks in the east, where it appeared to be making incremental gains.

Zelenskiy has warned for weeks that Moscow aims to step up its assault after about two months of virtual stalemate along the front line that stretches across the south and east.

Ukraine won a huge boost last week when Germany and the United States announced plans to provide heavy tanks, ending weeks of diplomatic deadlock on the issue.

While there was no sign of a broader new Russian offensive, the administrator of Russian-controlled parts of Ukraine’s eastern Donetsk province, Denis Pushilin, said Russian troops had secured a foothold in Vuhledar, a coal-mining town whose ruins have been a Ukrainian bastion since the outset of the war.

Pushilin said that despite “huge losses” Ukrainian forces were consolidating positions in industrial facilities.

‘BATTLE FOR EVERY METER’

Pushilin said Ukrainian forces were throwing reinforcements at Bakhmut, Maryinka and Vuhledar, towns running from north to south just west of Donetsk city. The Russian state news agency TASS quoted him as saying Russian forces were making advances there, but “not clear-cut, that is, here there is a battle for literally every meter.”

Ukrainian military analyst Oleh Zhdanov said Ukraine still controlled Maryinka and Vuhledar, where Russian attacks were less intense on Monday.

Pushilin’s adviser, Yan Gagin, said fighters from Russian mercenary force Wagner had taken partial control of a supply road leading to Bakhmut, a city that has been Moscow’s focus for months.

A day earlier, the head of Wagner said his fighters had secured Blahodatne, a village just north of Bakhmut, although Kyiv said it had repelled assaults on Blahodatne.

Reuters could not independently verify the battlefield reports. But the locations of the reported fighting indicated clear, though gradual, Russian gains.

In central Zaporizhzhia region and in southern Kherson region, Russian forces shelled more than 40 settlements, Ukraine’s General Staff said. Targets included the city of Kherson, where there were casualties.

The Russians also launched four rocket attacks on Ochakiv in southern Mykolaiv, the army said, on the day Zelenskiy met the Danish prime minister in Mykolaiv city, to the northeast.

WESTERN DELAYS

Zelenskiy is urging the West to hasten delivery of its promised weapons so Ukraine can go on the offensive, but most of the hundreds of tanks pledged by Western countries are months away from delivery.

British Defence Minister Ben Wallace said the 14 Challenger tanks donated by Britain would be on the front line around April or May, without giving an exact timetable.

Kremlin spokesperson Dmitry Peskov said Western countries supplying arms leads “to NATO countries more and more becoming directly involved in the conflict – but it doesn’t have the potential to change the course of events and will not do so.”

The U.S.-based Institute for the Study of War think-tank said “the West’s failure to provide the necessary materiel” last year was the main reason Kyiv’s advances had halted since November.

The researchers said in a report that Ukraine could still recapture territory once the promised weapons arrive.

The Belarusian defence ministry said on Tuesday that Russia and Belarus had started a week-long session of staff training in preparation for joint drills in Russia in September.

The Russian invasion of Ukraine, which Moscow justifies as necessary to protect itself from its neighbour’s ties with the West, has killed tens of thousands of people and driven millions from their homes.

Reporting by Reuters bureaus; Writing by Doina Chiacu and Stephen Coates; Editing by Cynthia Osterman & Simon Cameron-Moore

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U.S. stops granting export licenses for China’s Huawei – sources

Jan 30 (Reuters) – The Biden administration has stopped approving licenses for U.S. companies to export most items to China’s Huawei, according to three people familiar with the matter.

Huawei has faced U.S. export restrictions around items for 5G and other technologies for several years, but officials in the U.S. Department of Commerce have granted licenses for some American firms to sell certain goods and technologies to the company. Qualcomm Inc (QCOM.O) in 2020 received permission to sell 4G smartphone chips to Huawei.

A Commerce Department spokesperson said officials “continually assess our policies and regulations” but do not comment on talks with specific companies. Huawei and Qualcomm declined to comment. Bloomberg and the Financial Times earlier reported the move.

One person familiar with the matter said U.S. officials are creating a new formal policy of denial for shipping items to Huawei that would include items below the 5G level, including 4G items, Wifi 6 and 7, artificial intelligence, and high-performance computing and cloud items.

Another person said the move was expected to reflect the Biden administration’s tightening of policy on Huawei over the past year. Licenses for 4G chips that could not be used for 5g, which might have been approved earlier, were being denied, the person said. Toward the end of the Trump administration and early in the Biden administration, officials had still granted licenses for items specific to 4G applications.

American officials placed Huawei on a trade blacklist in 2019 restricting most U.S. suppliers from shipping goods and technology to the company unless they were granted licenses. Officials continued to tighten the controls to cut off Huawei’s ability to buy or design the semiconductor chips that power most of its products.

But U.S. officials granted licenses that allowed Huawei to receive some products. For example, suppliers to Huawei got licenses worth $61 billion to sell to the telecoms equipment giant from April through November 2021.

In December, Huawei said its overall revenue was about $91.53 billion, down only slightly from 2021 when U.S. sanctions caused its sales to fall by nearly a third.

Reporting by Chavi Mehta in Bengaluru, Stephen Nellis in San Francisco, and Alexandra Alper and Karen Freifeld in Washington; Additional reporting by David Kirton in Shenzhen; Editing by Shailesh Kuber and Stephen Coates

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In diplomatic coup, Taiwan president speaks to Czech president-elect

  • Pavel won Czech presidential election on Saturday
  • Pavel, Taiwan’s Tsai stress their shared values in call
  • China opposes other countries dealing with Taiwan
  • Beijing views Taiwan as renegade province

TAIPEI/PRAGUE, Jan 30 (Reuters) – Taiwan President Tsai Ing-wen held a telephone call with Czech President-elect Petr Pavel on Monday, a highly unusual move given the lack of formal ties between their countries and a diplomatic coup for Taipei that is sure to infuriate China.

The two leaders stressed their countries’ shared values of freedom, democracy and human rights during their 15-minute call, their offices said, and Pavel said he hoped to meet Tsai in the future.

Most countries avoid high-level public interactions with Taiwan and its president, not wishing to provoke China, the world’s second largest economy.

Beijing views Taiwan as being part of “one China” and demands other countries recognise its sovereignty claims, which Taiwan’s democratically-elected government rejects.

In 2016, U.S. President-elect Donald Trump spoke by telephone with Tsai shortly after winning the election, setting off a storm of protest from Beijing.

Tsai said she hoped that under Pavel’s leadership the Czech Republic would continue to cooperate with Taiwan to promote a close partnership, and that she hoped to stay in touch with him.

“Bilateral interaction between Taiwan and the Czech Republic is close and good,” her office summarised Tsai as having said.

Pavel, a former army chief and high NATO official who won the Czech presidential election on Saturday, said on Twitter that the two countries “share the values of freedom, democracy, and human rights”.

‘ONE-CHINA’ PRINCIPLE

Earlier, China’s foreign ministry had said it was “seeking verification with the Czech side” on media reports that the call was to take place.

“The Chinese side is opposed to countries with which it has diplomatic ties engaging in any form of official exchange with the Taiwan authorities. Czech President-elect Pavel during the election period openly said that the ‘one-China’ principle should be respected,” the ministry said.

Pavel will take office in early March, replacing President Milos Zeman, who is known for his pro-Beijing stance.

Zeman spoke with Chinese President Xi Jinping this month and they reaffirmed their “personal friendly” relationship, according to a readout of their call from Zeman’s office.

The Czech Republic, like most countries, has no official diplomatic ties with Taiwan, but the two sides have moved closer as Beijing ratchets up military threats against the island and Taipei seeks new friends in Eastern and Central Europe.

The centre-right Czech government has said it wants to deepen cooperation with democratic countries in the India-Pacific region, including Taiwan, and has also been seeking a “revision” of ties with China.

In 2020, the head of the Czech Senate visited Taiwan and declared himself to be Taiwanese in a speech at Taiwan’s parliament, channelling the late U.S. President John F. Kennedy’s defiance of communism in Berlin in 1963.

Reporting by Robert Muller and Jason Hovet; Additional reporting by Ben Blanchard and Yimou Lee in Taipei; editing by Gareth Jones

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Biden says no F-16s for Ukraine as Russia claims gains

  • Russian administrator claims foothold in Vuhledar
  • Kyiv says Russian gains come at huge cost
  • Think-tank says delay in Western arms halted Ukraine’s advance

KYIV, Ukraine/WASHINGTON Jan 30 (Reuters) – The United States will not provide the F-16 fighter jets that Ukraine has sought in its fight against Russia, President Joe Biden said on Monday, as Russian forces claimed a series of incremental gains in the country’s east.

Ukraine planned to push for Western fourth-generation fighter jets such as the F-16 after securing supplies of main battle tanks last week, an adviser to Ukraine’s defence minister said on Friday. A Ukrainian air force spokesman said it would take its pilots about half a year to train on such fighter jets.

Asked if the United States would provide the jets, Biden told reporters at the White House, “No.”

The brief exchange came shortly after Ukrainian President Volodymyr Zelenskiy said that Russia had begun exacting its revenge for Ukraine’s resistance to its invasion with relentless attacks in the east.

Zelenskiy has warned for weeks that Moscow aims to step up its assault on Ukraine after about two months of virtual stalemate along the front line that stretches across the south and east.

Ukraine won a huge boost last week when Germany and the United States announced plans to provide heavy tanks, ending weeks of diplomatic deadlock on the issue.

“The next big hurdle will now be the fighter jets,” Yuriy Sak, who advises Defence Minister Oleksiy Reznikov, told Reuters on Friday.

While there was no sign of a broader new Russian offensive, the administrator of Russian-controlled parts of Ukraine’s eastern Donetsk province, Denis Pushilin, said Russian troops had secured a foothold in Vuhledar, a coal-mining town whose ruins have been a Ukrainian bastion since the outset of the war.

Pushilin said Ukrainian forces were continuing to throw reinforcements at Bakhmut, Maryinka and Vuhledar, three towns running from north to south just west of Donetsk city. The Russian state news agency TASS quoted him as saying Russian forces were making advances there, but “not clear-cut, that is, here there is a battle for literally every meter.”

Pushilin’s adviser, Yan Gagin, said fighters from Russian mercenary force Wagner had taken partial control of a supply road leading to Bakhmut, a city that has been Moscow’s main focus for months.

A day earlier, the head of Wagner said his fighters had secured Blahodatne, a village just north of Bakhmut.

Kyiv said it had repelled assaults on Blahodatne and Vuhledar, and Reuters could not independently verify the situations there. But the locations of the reported fighting indicated clear, though gradual, Russian gains.

Zelenskiy said Russian attacks in the east were relentless despite heavy casualties on the Russian side, casting the assaults as payback for Ukraine’s success in pushing Russian forces back from the capital, northeast and south earlier in the conflict.

“I think that Russia really wants its big revenge. I think they have (already) started it,” Zelenskiy told reporters in the southern port city of Odesa.

Mykola Salamakha, a Ukrainian colonel and military analyst, told Ukrainian Radio NV that Moscow’s assault in Vuhledar was coming at huge cost.

“The town is on an upland and an extremely strong defensive hub has been created there,” he said. “This is a repetition of the situation in Bakhmut – one wave of Russian troops after another crushed by the Ukrainian armed forces.”

WESTERN DELAYS

The hundreds of modern tanks and armoured vehicles pledged to Ukraine by Western countries in recent weeks for a counteroffensive to recapture territory are months away from delivery.

This leaves Kyiv to fight through the winter in what both sides have described as a meat grinder of relentless attritional warfare.

Moscow’s Wagner mercenary force has sent thousands of convicts recruited from Russian prisons into battle around Bakhmut, buying time for Russia’s regular military to reconstitute units with hundreds of thousands of reservists.

Zelenskiy is urging the West to hasten delivery of its promised weapons so Ukraine can go on the offensive.

Kremlin spokesman Dmitry Peskov said Western countries supplying arms leads “to NATO countries more and more becoming directly involved in the conflict – but it doesn’t have the potential to change the course of events and will not do so.”

The U.S.-based Institute for the Study of War think-tank said “the West’s failure to provide the necessary materiel” last year was the main reason Kyiv’s advances had halted since November.

That allowed Russia to apply pressure at Bakhmut and fortify the front against a future Ukrainian counter-attack, its researchers said in a report, though they said Ukraine could still recapture territory once the promised weapons arrive.

Zelenskiy met Danish Prime Minister Mette Frederiksen on Monday in Mykolaiv, a rare visit by a foreign leader close to the front. The city, where Russia’s advance in the south was halted, had been under relentless bombardment until Ukraine pushed the front line back in November.

Russia’s invasion, which it launched on Feb. 24 last year claiming it was necessary to protect itself from its neighbour’s ties with the West, has killed tens of thousands of people and driven millions from their homes.

Additional reporting by Pavel Polityuk, Kevin Liffey, Ronald Popeski and Reuters bureaus; Writing by Peter Graff, Philippa Fletcher and Doina Chiacu; Editing by Gareth Jones, William Maclean and Cynthia Osterman

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Shares and bonds nervy as rate-hike week looms

  • Fed seen hiking 25 bps, ECB and BOE by 50 bps
  • Technology giants lead host of earnings results
  • Shares edge down after robust January rally

LONDON, Jan 30 (Reuters) – Stock markets worldwide halted their January rally on Monday, pausing for breath at the start of an agenda-setting week of central bank rate hikes and data releases that will clarify if progress has been made in the battle against inflation.

Investors expect the Federal Reserve will raise rates by 25 basis points on Wednesday, followed the day after by half-point hikes from the Bank of England and European Central Bank, and any deviation from that script would be a real shock.

Europe’s benchmark STOXX index fell 0.8% on Monday morning, echoing a slight dip in MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), which has surged 11% in January so far as China’s reopening bolsters sentiment.

The U.S. Nasdaq index is likewise on course for its best January since 2001, a rally that will be tested by earnings updates from tech giants this week.

U.S. stocks were set to follow the nervous Monday mood with S&P 500 futures down 1% and Nasdaq futures falling 1.3%, as investors await guidance later in the week on the Federal Reserve’s policy.

Analysts expect a hawkish tone suggesting that more needs to be done to tame inflation. read more

“With U.S. labour markets still tight, core inflation elevated and financial conditions easing, Fed Chair Powell’s tone will be hawkish, stressing that a downshifting to a 25bp hike doesn’t mean a pause is coming,” said Bruce Kasman, chief economist at JPMorgan, who expects another rise in March.

“We also look for him to continue to push back against market pricing of rate cuts later this year.”

There is a lot of pushing to do given futures currently expect rates to peak at 5% in March and to fall back to 4.5% by year end.

Europe offered a brisk reminder that the fight against rising prices is far from over, as bond yields in the region rose sharply on Monday in the wake of stronger-than-expected Spanish inflation data.

The data showing inflation rose 5.8% year-on-year in January, against expectations of 4.7%, pushed up the zone’s benchmark German 10-year government bond yield 7 basis points (bps) to 2.3190%, its highest since Jan. 10.

Italian and Spanish yields also inched up.

The dollar index was flat ahead of the week’s key data, on course for a fourth straight monthly loss of more than 1.5% on growing expectations that the Fed is nearing the end of its rate-hike cycle.

APPLE’S CORE

Yields on 10-year notes have fallen 33 basis points so far this month to 3.50%, essentially due to easing financial conditions even as the Fed talks tough on tightening.

That dovish outlook will also be tested by data on U.S. payrolls, the employment cost index and various ISM surveys.

Reading on EU inflation could be important for whether the ECB signals a half-point rate rise for March, or opens the door to a slowdown in the pace of tightening. read more

As for Wall Street’s recent rally, much will depend on earnings from Apple Inc (AAPL.O), Amazon.com (AMZN.O), Alphabet Inc (GOOGL.O) and Meta Platforms (META.O), among many others.

“Apple will give a glimpse into the overall demand story for consumers globally and a snapshot of the China supply chain issues starting to slowly abate,” wrote analysts at Wedbush.

“Based on our recent Asia supply chain checks we believe iPhone 14 Pro demand is holding up firmer than expected,” they added. “Apple will likely cut some costs around the edges, but we do not expect mass layoffs.”

Market pricing of early Fed easing has been a burden for the dollar, which has lost 1.6% so far this month to stand at 101.85 against a basket of major currencies.

The euro is up 1.5% for January at $1.0878 and just off a nine-month top. The dollar has even lost 1.3% on the yen to 129.27 despite the Bank of Japan’s dogged defence of its ultra-easy policies.

The drop in the dollar and yields has been a boon for gold, which is up 5.8% for the month so far at $1,930 an ounce .

The precious metal was flat on Monday ahead of the slew of key central bank moves and data releases.

China’s rapid reopening is seen as a windfall for commodities in general, supporting everything from copper to iron ore to oil prices.

Oil steadied on Monday after earlier losses, with prices bolstered by rising Middle East tension over a drone attack in Iran and hopes of higher Chinese demand.

Brent crude rose 10 cents, or 0.12%, to $86.76 a barrel by 1200 GMT while U.S. West Texas Intermediate crude added 4 cents, or 0.05%, to $79.72.

Reporting Lawrence White and Wayne Cole; Editing by Christopher Cushing, Arun Koyyur and Christina Fincher

Our Standards: The Thomson Reuters Trust Principles.

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Odds ‘very high’ of U.S. military conflict with China, top Republican says

WASHINGTON, Jan 29 (Reuters) – A top Republican in the U.S. Congress on Sunday said the odds of conflict with China over Taiwan “are very high,” after a U.S. general caused consternation with a memo that warned that the United States would fight China in the next two years.

In a memo dated Feb. 1 but released on Friday, General Mike Minihan, who heads the Air Mobility Command, wrote to the leadership of its roughly 110,000 members, saying, “My gut tells me we will fight in 2025.”

“I hope he is wrong. … I think he is right though,” Mike McCaul, the new chairman of the Foreign Affairs Committee in the U.S. House of Representatives, told Fox News Sunday.

The general’s views do not represent the Pentagon but show concern at the highest levels of the U.S. military over a possible attempt by China to exert control over Taiwan, which China claims as a wayward province.

Both the United States and Taiwan will hold presidential elections in 2024, potentially creating an opportunity for China to take military action, Minihan wrote.

McCaul said that if China failed to take control of Taiwan bloodlessly then “they are going to look at a military invasion in my judgment. We have to be prepared for this.”

He accused the Democratic administration of President Joe Biden of projecting weakness after the bungled pullout from Afghanistan that could make war with China more likely.

“The odds are very high that we could see a conflict with China and Taiwan and the Indo Pacific,” McCaul said.

The White House declined to comment on McCaul’s remarks.

DEMOCRAT DISAGREES

Representative Adam Smith, the top Democrat on the House Armed Services Committee, said he disagreed with Minihan’s assessment.

Smith told Fox News Sunday that war with China is “not only not inevitable, it is highly unlikely. We have a very dangerous situation in China. But I think generals need to be very cautious about saying we’re going to war, it’s inevitable.”

Smith said the United States needs to be in a position to deter China from military action against Taiwan, “but I’m fully confident we can avoid that conflict if we take the right approach.”

U.S. Defense Secretary Lloyd Austin earlier this month said he seriously doubted that ramped-up Chinese military activities near the Taiwan Strait were a sign of an imminent invasion of the island by Beijing.

A Pentagon official on Saturday said the general’s comments were “not representative of the department’s view on China.”

Reporting By Ross Colvin; Additional reporting by David Lawder; Editing by Nick Zieminski and Mark Porter

Our Standards: The Thomson Reuters Trust Principles.

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