FirstFT: US-Japan alliance blasts off

The US and Japan will announce they are extending their security alliance to space in an effort to defend against attacks on satellites amid growing concern over the threat from China, US officials said.

Tokyo and Washington will announce the expanded co-operation in Washington, where US defence secretary Lloyd Austin and US secretary of state Antony Blinken are holding talks with their Japanese counterparts.

The announcement, which comes ahead of Japanese prime minister Fumio Kishida’s summit with US president Joe Biden on Friday, marks the latest effort by Washington and Tokyo to increase co-operation to counter China and prepare for a possible conflict over Taiwan.

It also comes as China is significantly boosting its satellite presence amid growing military activity in space. Since Biden took office as president, the US and Japan have taken a range of actions to send a stronger message to Beijing, including conducting war games and stepping up war planning.

Five more stories in the news

1. Russia demotes ‘General Armageddon’ Russia has replaced Sergei Surovikin after barely three months as head of its Ukraine campaign following battlefield setbacks and failure to turn the war in Moscow’s favour. Surovikin, nicknamed “General Armageddon”, will be replaced by Russia’s highest-ranking military officer, Valery Gerasimov.

2. Lula deploys security forces after Bolsonaro questions election Brazil’s government has deployed additional armed forces across the country to prevent expected far-right demonstrations, hours after former president Jair Bolsonaro posted a video online that questioned the result of the October election. Late on Tuesday night, the administration of Luiz Inácio Lula da Silva said extremist groups were planning nationwide protests to overthrow the new president.

3. US green subsidies draw $2.5bn solar investment from Hanwha The South Korean manufacturer plans to spend $2.5bn to expand production of solar power equipment in the US state of Georgia, a sign that billions of dollars of green subsidies passed by Democrats are sparking new investment in clean energy. The move marks the largest foreign direct investment in US solar manufacturing, according to fDi Markets.

4. Uniqlo owner to raise wages in Japan by 40% as prices climb Fast Retailing, Asia’s largest clothing retailer and owner of the Uniqlo brand, will increase employee wages in Japan by as much as 40 per cent as inflation there rises at its fastest pace in decades.

5. BlackRock plans to cut 500 jobs worldwide The world’s biggest asset manager is planning job cuts equivalent to a reduction of about 2.5 per cent of its total workforce as the nearly $8tn fund management group grapples with fallout from last year’s market sell-off.

The day ahead

Japan trade balance data November trade data will be published this morning.

China and India inflation data China’s December consumer price index and producer price index inflation rate data are due to be released today. India will also report its CPI figures. See how your country compares on rising prices with our inflation tracker.

TSMC earnings Taiwan Semiconductor Manufacturing Company will report fourth-quarter earnings today. The chipmaker recently sought to allay concerns that its massive investment in chip production in the US could weaken Taiwan’s own strategically important industry.

Indo-Pacific Business Forum The US and Japanese governments will host a public-private event to promote trade, investment and economic co-operation in the region. Climate change and building resilient semiconductor supply chains are two topics on the agenda. (Nikkei)

What else we’re reading and listening to

🎧 Listen: Indonesia’s secret to economic success The global economy has been hit hard in the past few years by the Covid-19 pandemic, Russia’s war in Ukraine and high inflation. But Indonesia has managed to succeed in spite of that. So, what’s its secret? The FT’s Mercedes Ruehl explains in this episode of the Behind the Money podcast.

India’s new railway project picks up speed Indian engineers are renowned for designing software, heavy machinery and pharmaceuticals for the world market. The government is now trying to parlay some of this private-sector expertise in local industries, including less efficient sectors such as railways.

What if 2023 is not the reset that investors are pining for? Last month’s US inflation reading marked the slowest rate of inflation in almost a year and meant the pace of consumer price rises had fallen back for two months in a row. So why are investors not dancing in the streets? Instead, party-poopers, perhaps humbled by a cruel 2022, express nagging doubts when you ask how this year will pan out, writes Katie Martin.

EU corruption probe: Spies, cash and luxury hotels Pier Antonio Panzeri has emerged as a central figure in the corruption probe that shocked the Brussels establishment in December. Qatar, prosecutors believe, used Panzeri and his network to improve its image in Brussels ahead of the Fifa World Cup. But the 67-year-old Italian was not new to the game.

Virgin Orbit scrambles to explain failed satellite launch The US-based company has appointed a team to investigate Monday’s failed satellite launch from England’s south-western county of Cornwall. Virgin Orbit said yesterday it was still “too early” to set a date for another attempt after the UK’s hopes of making history — as the first country to put a commercial satellite into space from western Europe — were dashed.

Thanks to readers who took our poll yesterday. Five per cent of respondents said they have regularly flown on a private jet since the beginning of the Covid-19 pandemic.

Take a break from the news

Part of the fun of LVMH Watch Week, writes HTSI’s Nick Foulkes, is seeing where the first major event of the horological year will take place. This year, Singapore takes a bow, reflecting the rising importance of this geographically compact nation as a market for luxury watches.