By Rahul Trivedi

BENGALURU (Reuters) - The South Korean economy barely grew last quarter as political chaos weighed on consumer spending, according to a Reuters poll of economists who expect the Bank of Korea to cut interest rates next month following a surprise hold last week.

Asia's fourth-largest economy grappled with uncertainty from President Yoon Suk Yeol's brief Dec. 3 martial law attempt, weakening economic sentiment and sluggish domestic demand which overshadowed the recovery in exports.

After only growing 0.1% in the July-September quarter, South Korea's economy likely expanded a seasonally adjusted 0.2% in Q4, according to the median forecast of 24 economists.

On an annual basis, the economy expanded 1.4% last quarter, according to the median forecast of 25 economists polled Jan. 15-20, barely changed from 1.5% in the previous quarter.

"We expect Q4 GDP data to show lackluster growth. High-frequency indicators point to domestic demand weakness, particularly in December as political events hurt consumer and business confidence," said Krystal Tan, an economist at ANZ.

Exports rose 6.6% in December compared to a year earlier. Semiconductor exports increased 31.5% during the same period.

The Bank of Korea (BOK) unexpectedly held its key rate steady on Jan. 16 to prevent the Korean won - which fell more than 12% last year - from weakening further, as political instability undermined investor confidence. The currency has seen a modest gain since the decision.

Although currency stability took precedence over domestic demand concerns in last week's meeting, BOK Governor Rhee Chang-yong indicated a rate cut was still on the table.

All 25 economists in a Reuters snap poll taken after the BOK's January decision expected it to lower borrowing costs by 25 basis points in February and median forecasts showed a total cut of 75 basis points by end-Q3.

"Even if the USD/KRW climbs back, as long as the current political situation does not worsen and it is driven more by the global dollar strength, the BOK is likely to deliver a rate cut in February," noted Min Joo Kang, senior economist at ING.

"After that, the BOK will keep a close eye on political developments, growth, inflation, and the won to gauge when to cut rates."

The BOK has lowered its 2025 economic growth projection from 1.9% in November to a range of 1.6% to 1.7%, reinforcing the rate cut view.

By Ethan Wang, Yukun Zhang and Ryan Woo

BEIJING (Reuters) - The frugal trend that began in China during the economic disruption of the pandemic and deepened amid the crisis in the property market is intensifying as Gen Z shuns government calls to spend, spend, spend and doubles down on saving.

On China's Instagram-like Xiaohongshu, or RedNote as it is known in the West, many under-30s are swapping notes on how to spend less on office lunches and shop on the cheap.

Influencers are also sharing tips on turning financial discipline into a lifestyle. Posts on how to save money total more than 1.5 million with more than 130 million views.

"I feel that the economy is quite bad, and it seems like it's hard for everyone to make money, so I think it's important to protect my own wallet," said Ava Su, who joined Alibaba (NYSE:BABA) after graduating just over six months ago and earns a relatively comfortable salary.

Su, 26, who sees the internet industry as "unstable", said she had cut back on impulse spending and had a long-term plan to save up 2 million yuan ($273,512) - 100 times her monthly salary.

According to data from Yu'e Bao, a popular online money market fund on the Alipay payment app, users born after 2000 each made an average of 20 deposits a month as of the end of 2024, double the number of May.

The May figure was itself 10 percent higher than the previous year. Yu'e Bao also said the funds each person had in their account that month was nearly 3,000 yuan, 50% more than the same month the previous year.

Some economists warn entrenched saving could hollow out demand just as policymakers are counting on domestic consumption to bolster China's gross domestic product. Sustained pessimism, which has already led to falling consumer prices from cars to bubble milk tea, will also dent the longer-term potential of the world's second-biggest economy.

The situation is a stark contrast to the free-spending attitudes of the so-called "moonlight" generation, a term used to describe those born in the 1980s and 1990s.

They saw only expanding job opportunities, rising incomes, and a quality of life that kept on improving, said Ho-fung Hung, professor in political economy at Johns Hopkins University, and were known for spending their entire salary by the end of every month.

But COVID-19, the economic slowdown and the government's crackdown on tech companies and other parts of the private sector made today's young people feel they needed to prepare for the worst, he added.

"This loss of optimism is a first since the beginning of (China's) market reform in 1978," Hung said.

JOB INSECURITY

The pessimism means many young people are seeking "iron rice bowl" jobs at government departments or state-owned enterprises that they believe offer more job security.

Su said she planned to take the civil service exam at some point in the future.

Unemployment among the roughly 100 million Chinese aged 16-24 has remained elevated in the last two years.

The youth jobless rate hit an all-time high of 21.3% in June 2023, prompting officials to halt the release of the data series and "reassess" how numbers were compiled. The recalibrated youth jobless rate stood at 15.7% in December last year.

Lily Li, a 26-year-old high school English teacher from Shenzhen who started her latest job in September, saves 80% of her monthly salary of over 10,000 yuan ($1,364), dramatically cutting back on non-essentials like clothes or concert tickets.

She had aspired to work in the corporate world, but became a school teacher for the stability. Li said she still planned to look for another job in the next two to three years but was unsure if she would find one.

Unlike the millennial philosophy of enjoying life to the fullest, the existential angst of China's Gen Z has only deepened alongside the country's economic malaise.

In the recent past, they spoke in Chinese of "tang ping", or "lying flat", and lamented a society beset by "involution", which refers to the state of being trapped in a meaningless rat race.

Those buzzwords followed the rise of "sang" culture, which celebrated defeatism, and "Buddhist youth", referring to young people's indifferent attitude to life.

"The 'involution' trend may intensify price competition and fuel disinflation as firms fight for weaker demand," said Gary Ng, senior economist at Natixis in Hong Kong.

"Such a consumption downgrade may hollow mid-price range products and services. China's long-term potential growth will decelerate."

China's 2024 gross domestic product grew 5.0%, data on Friday showed, but GDP growth is expected to ease over the next two years.

($1 = 7.3123 Chinese yuan renminbi)

Investing.com-- Asian stocks were a mixed batch in volatile trade on Tuesday after U.S. President Donald Trump did not impose steep tariffs on China in his first day in office, as feared, although he still raised the possibility of future tariffs. 

Risk-driven assets saw increased volatility as investors still remained largely on edge over Trump’s policies. The U.S. President signed a flurry of executive orders on his first day in office, ranging from decrees on increasing U.S. oil production to postponing a ban on social media app TikTok. 

U.S. stock index futures were mildly positive in Asian trade, but also saw increased volatility as Trump outlined plans to impose tariffs on China, Mexico and Canada. 

Asian stocks were nursing a weak start to 2025, although they gained some ground in recent sessions on hopes that Trump's tariffs would not be as strict as initially feared. Uncertainty over the tariffs remained in play, keeping investors to the sidelines.

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell slightly, while Hong Kong’s Hang Seng index added 0.8%. 

Australia’s ASX 200 rose 0.6%, while Singapore’s Straits Times index fell 0.6%. 

South Korea’s KOSPI fell 0.3%, while futures for India’s Nifty 50 index pointed to a negative open. 

Trump does not sign day-1 tariffs, but considering more duties 

Trump did not impose any trade tariffs on China, Mexico, and Canada- three countries that had been the subject of his ire in recent months- on the first day of his Presidency. 

But Trump signaled that he was re-evaluating U.S. trade, specifically that he would impose 25% tariffs on imports from Canada and Mexico. 

Trump also signed an order calling for an America First trade policy, instructing federal agencies to look into unfair trade practices by other countries while also reviewing current trade agreements. 

Trump’s orders spurred bets that he was still on track to impose higher trade tariffs against major economies, especially China. This came even as Trump held positive dialogue with his Chinese counterpart Xi Jinping last week. 

Increased trade tariffs stand to disrupt global trade, and could also draw retaliatory measures from major economies, sparking a renewed global trade war between the U.S. and other major economies.

But in Asia, China is expected to unlock even more stimulus in the face of a U.S. trade war, which could boost local growth.

Japan shares muted as BOJ looms 

Japan’s Nikkei 225 and TOPIX indexes moved little on Tuesday, with investors turning even more cautious towards the country before a Bank of Japan meeting later in the week.

The BOJ is expected to potentially hike interest rates further this week, especially as policymakers flagged the possibility of such a move in recent comments. 

While higher rates herald more pressure on Japanese markets, they also reflect increased BOJ confidence in the Japanese economy, which could make domestically-exposed sectors appear more attractive. 

But strength in the yen, amid recent speculation over rate hikes, is expected to pressure export-oriented sectors. 

WASHINGTON (Reuters) - President Donald Trump on Monday revoked a 2021 executive order signed by his predecessor Joe Biden that sought to ensure half of all new vehicles sold in 2030 were electric.

The 50% target, which was not legally binding, won the support of U.S. and foreign automakers. Trump also plans to direct agencies to reconsider rules mandating more stringent emissions rules that would require automakers to sell between 30% to 56% EVs by 2032 in order to comply.

LONDON/NEW YORK (Reuters) -The dollar extended its slide while crude prices curtailed their losses after U.S. President Donald Trump said on Monday he would tariff and tax countries to enrich Americans, overhaul the trade system and declare a national energy emergency.

COMMENTS:

RICK MECKLER, PARTNER, CHERRY LANE INVESTMENTS, NEW VERNON, NEW JERSEY

"The biggest reaction is what appears to be the delay on the tariffs. Of all the proposals that are being put forward, that was the one that was most likely to affect the market more dramatically both for its inflationary-potential and just for whatever retribution that would have been for it."

"When you say you're going to study and try to negotiate it after you said that you will do it on Day 1, I think that's encouraging for the market."

"I also think that the market's view is that a lot of the proposals of the Trump team are aspirational. They may not necessarily implement them or they will implement them slowly. But they did help him get elected. And also some of the proposals need development. The new team is just in place and so the idea of doing it on Day 1 was not realy realistic. So that's why the market is a little relieved on that."

MATT GERTKEN, CHIEF GEOPOLITICAL STRATEGIST, BCA RESEARCH (Research Note)

"We expect significant tariffs early in his administration, whether this week or in the coming three months, since the U.S. labor market is strong and the midterm elections are far away. Weak global manufacturing also gives Trump the advantage.. Later the ability to ratchet up trade pressure will decline and Trump will risk losing the historic opportunity he has to remake US trade relationships."

EUGENE EPSTEIN, HEAD OF TRADING AND STRUCTURED PRODUCTS, NORTH AMERICA, MONEYCORP NE,W JERSEY

"There are so many people surprised in some ways of how things are shaping up even though the playbook that Trump basically runs is exactly the same as the first four years. He uses tariffs as a negotiating tool. It seems like he will impose tariffs regardless. The question is how severe. He has a lot of flexibility though in how he can impose them."

"In terms of the dollar reaction, it certainly weakened a bit today, but utimately, the dollar has strengthened substantially and I think today's action changes the playbook for the forseeable future. Just because he did not sign sweeping tariffs on day one doesn't mean that that's not going to happen. Everybody is on the negotiating table."

"As far as position-taking goes, it's very important to stay calm and cautious. This is just the first day and there really have not been been much answers just yet. Just because he hasn't announced sweeping tariffs the first day, it means absolutely nothing in terms of long-term tariff policies. Trade policies with specific numbers, even for him, will probably have to have some semblance of official negotiations before making a decision."

ZACHARY GRIFFITHS, SENIOR INVESTMENT GRADE STRATEGIST, CREDITSIGHTS, CHARLOTTE, NORTH CAROLINA

"The rally in the dollar and equity futures was due to expectations that Trump will..not be putting direct tariffs on any country today. That seems to be a relief trade."

"But if you look at what Trump said in his speech, it looks like he's quite firm on tariffs. I think there's more to come there."

"In terms of opting to not impose tariffs today and that being a market-positive, I'm a little skeptical of that and I am not sure that holds. If you have a more gradual, but still large tariffs in terms of percentage on a broad swath of countries, and if that is rolled out over time, that could be more challenging from an inflation-perspective for the Fed and could even result in policy being tighter for longer."

JAMIE COX, MANAGING PARTNER, HARRIS FINANCIAL GROUP

"Energy prices are going to come down in big way — consumers will rejoice in the savings and the inflation data in 6-7 months is going to look far better."

NIGEL GREEN, CEO, DEVERE GROUP

"The energy sector will undoubtedly be the most immediate beneficiary of this sweeping policy shift."

"Companies involved in oil and gas exploration, extraction, and infrastructure stand to gain as regulatory barriers are dismantled and investment in domestic production soars. Shares of U.S. energy giants and mid-cap firms are likely poised for significant upward momentum as the markets price in increased output and profitability."

"Global oil prices, already sensitive to geopolitical developments, could see sharp adjustments." 

GABRIELA SILLER PAGAZA, DIRECTOR FOR ECONOMIC ANALYSIS, GRUPO FINANCIERO BASE

"At the beginning of Trump's speech, the (Mexican peso) exchange rate was at 20.5751...At the end of the speech, it fell to 20.5289 pesos per dollar, which implies an appreciation of 4.6 cents or 0.22%, since there was no announcement of tariffs."

MARC CHANDLER, CHIEF MARKET STRATEGIST, BANNOCKBURN GLOBAL FOREX, NEW YORK

"There is a relief rally in foreign currencies, right now."

"Even though Trump did not specify, it's very clear that when he says that the U.S. is going to be a big auto manufacturer, he's talking about tariffs. So whether he imposes them in Day 1 or Day 5 or Day 10, I'm not sure it makes that much of a difference."

"The idea that he is going to be able to raise $2 trillion in tariffs seems to be an exaggeration. The U.S. imports only $1 trillion of goods, so what does he mean that he will be able raise $2 trillion and over what time period? It doesn't make sense."

Investing.com-- Bitcoin fell on Monday, reversing course after a weekend rally as increased market volatility in the wake of two memecoin launches from President-elect Donald Trump dented sentiment towards crypto markets.

Traders were also on edge before Trump’s inauguration later on Monday, with the President-elect expected to sign a flurry of executive orders outlining policy changes. But just what these changes would entail remained unclear, although Trump has promised more crypto-friendly policies during his term. 

Bitcoin fell 2.5% to $102,481.9 by 00:28 ET (05:28 GMT). 

Trump, Melania memecoin volatility dents crypto appetite 

Crypto markets initially cheered the launch of Trump’s memecoin, $TRUMP, which accelerated sharply since its launch on Friday. The token was seen rallying over 7000% within hours of its launch, gaining a market capital of over $14 billion. 

But the token was then subjected to heavy profit-taking, falling sharply from its weekend peaks. 

Trump also drew flak for launching a new memecoin themed around to-be First Lady Melania Trump, $MELANIA, with crypto traders raising some concerns over the ethical implications of Trump leveraging his political status to turn speculative markets in his favor. 

The launch of $TRUMP, of which the President-elect holds a significant number of tokens, greatly boosted his personal wealth, at least on paper. 

Trump policies in focus as inauguration looms 

Trump is set to take office from 12:00 ET (17:00 GMT) on Monday.

The President-elect has promised to dole out crypto-friendly regulations during his second term, and has vowed to make America the “crypto capital” of the world.

While Trump did nominate several pro-crypto candidates to key regulatory positions, markets were uncertain over what policies he will outline, given that some of his more ambitious promises, such as a Bitcoin Strategic Reserve, could require Congressional approval.

Uncertainty over the impact of Trump’s policies on the broader economy, especially given his hardline stance on immigration and trade, kept risk appetite subdued. 

Crypto price today: altcoins track Bitcoin losses

Broader crypto prices tracked losses in Bitcoin, as they also lost steam from a weekend rally.

World no.2 crypto Ether fell 0.3% to $3,287.29, while XRP fell 3.4% to $3.0939.

Solana, Cardano, and Polygon fell between 5% and 11%, while among meme tokens, Dogecoin lost 7.5%. 

Investing.com-- President-elect Donald Trump is set to implement over 200 executive actions on his first day in office, Fox News Digital reported on Sunday, citing a senior administration official.

The comprehensive measures will address a broad range of policy areas including border security, energy production, federal bureaucracy, and cost-of-living reductions for Americans, the report stated.

Trump will sign multiple omnibus executive orders containing dozens of actions. These include declaring a national border emergency, directing the military and the Department of Homeland Security to secure the southern border, and targeting criminal cartels operating within the U.S. by designating them as foreign terrorist organizations, the Fox report said.

He plans to reinstate policies like “Remain in Mexico” and “Catch and Release” while initiating new phases of border wall construction, it added.

In energy policy, the President-elect will declare a national energy emergency, ending offshore wind leases and repealing Biden-era restrictions on oil, gas, and pipeline projects. The administration aims to fully leverage Alaskan energy resources and withdraw the U.S. from agreements such as the Paris Climate Accord, the report stated.

The sweeping reforms will include federal hiring freezes, merit-based staffing, and eliminating Diversity, Equity, and Inclusion (DEI) programs across the government. Trump also intends to suspend security clearances for officials tied to controversial actions before the 2020 election, according to the report.

Trump’s extensive actions will mark an unprecedented beginning to a U.S. presidency, reaffirming his campaign promise of restoring American greatness, the Fox report said.

SEOUL (Reuters) - South Korea pledged on Monday a record amount of financing support for exporters to mitigate any negative impact from changes in U.S. trade policies as Donald Trump was poised to be sworn in for his second presidency.

The government plans to provide 360 trillion won ($247.74 billion) worth of policy financing to exporting companies through state-run banks and institutions this year, according to a statement released by the finance ministry.

"There are concerns that external uncertainty will be heightened under the incoming U.S. administration and adversely affect exports," the ministry said.

The ministry said it would also boost insurance support to guard against foreign exchange volatility to 1.4 trillion won this year, from 1.2 trillion won last year, and spending on government projects, such as trade fairs and delegations, to 2.9 trillion won from 2.1 trillion won.

Sectors particularly under threat of new U.S. policies are semiconductors and rechargeable batteries, the ministry said, whereas defence, nuclear energy and shipbuilding sectors are seen as more promising because of room for cooperation with the United States.

U.S. President-elect Trump, who takes office later on Monday, has pledged to impose stiff tariffs on major trading partners, such as Mexico, Canada and China, which are also expected to affect South Korean companies running factories in those countries.

Economists say there are worries that the Trump administration will introduce trade policies against South Korea too, after Asia's fourth-largest economy earned a record-high surplus of $55.7 billion in trade with the U.S. in 2024, up 25.4% from 2023.

The Korea International Trade Association, South Korea's biggest group of exporting companies, projects export growth to slow to 1.8% this year. Last year, South Korea's exports rose 8.1% to a record high of $683.7 billion, as sales to the U.S. rose 10.4%.

($1 = 1,453.1500 won)

By Leika Kihara

TOKYO (Reuters) - The Bank of Japan is expected to raise interest rates on Friday barring any market shocks when U.S. President-elect Donald Trump takes office, a move that would lift short-term borrowing costs to levels unseen since the 2008 global financial crisis.

A tightening in policy would underscore the central bank's resolve to steadily push up interest rates, now at 0.25%, to near 1% - a level analysts see as neither cooling nor overheating Japan's economy.

At the two-day meeting ending on Friday, the BOJ is likely to raise its short-term policy rate to 0.5% unless Trump's inaugural speech and executive orders upend financial markets, sources have told Reuters.

In a quarterly outlook report, the board is also expected to raise its price forecasts on growing prospects that broadening wage gains will keep Japan on track to sustainably hit the bank's 2% inflation target.

A hike by the BOJ would be the first since July last year when the move, coupled with weak U.S. jobs data, shocked traders and triggered a rout in global markets in early August.

Keen to avoid a recurrence, the BOJ has carefully prepared markets with clear signals by Governor Kazuo Ueda and his deputy last week that a rate hike was on the cards. The remarks caused the yen to rebound as markets priced in a roughly 80% chance of a rate increase on Friday.

There were also hints of near-term action last month. While the BOJ held off raising rates at the Dec. 18-19 meeting, hawkish board member Naoki Tamura proposed pushing up rates. Some of his colleagues also saw conditions fall into place for an imminent rate hike, minutes of the meeting showed.

With a policy tightening this week seen as a near certainty, market attention is shifting to Ueda's post-meeting briefing for clues on the timing and pace of subsequent increases.

As inflation has exceeded the BOJ's 2% target for nearly three years and the weak yen has kept import costs elevated, Ueda is likely to stress policymakers' resolve to continue raising interest rates.

But there is good reason to tread cautiously. While the International Monetary Fund raised its forecast for global growth in 2025, Trump's policies risk destabilising markets and stoking uncertainty about the outlook for Japan's export-reliant economy.

Domestic political uncertainty could heighten, too, as Prime Minister Shigeru Ishiba's minority coalition may struggle to pass budget through parliament and win an upper house election scheduled in July.

The economic damage caused by past ill-fated rate hikes also haunt BOJ policymakers. The BOJ ended quantitative easing in 2006 and pushed short-term rates to 0.5% in 2007, moves that triggered a storm of political criticism as delaying an end to deflation.

The BOJ cut rates from 0.5% to 0.3% in October 2008, then to 0.1% in December of that year, as the global financial crisis pushed Japan into recession. Since then, various unconventional steps have kept borrowing costs stuck near zero.

"Japan had a permanently low growth rate, inflation rate and lower level of interest rates. So policymakers, investors and the business community still ask - have we really broken free from that?," said Jeffrey Young, chief executive officer of DeepMacro.

"The BOJ is going to have to explain very carefully that they're raising rates to move away from the extraordinary policy that they adopted."

Investing.com -- Global investors will finally get to see the market impact of President-elect Donald Trump's return to the White House. Trump's inauguration on Monday as the 47th U.S. president is expected to trigger a series of executive orders on issues ranging from taxes to tariffs, just as fourth-quarter earnings season gets underway in earnest.  Here's your look at what's happening in markets for the week ahead.

1. Trump inauguration

Investors are closely watching as Trump prepares to begin his second term in office on Monday after the incoming president indicated he plans to sign a flurry of executive orders on his first day.

U.S. markets will be closed on Monday for Martin Luther King Jr. Day, so any market fallout may not be fully felt until Tuesday.

Tariff-related moves will be in particular focus, as leaks, counter-leaks, and denials since the election have roiled markets.

Ahead of the inauguration, long-dated U.S. bond yields have risen amid expectations that Trump's proposed tariffs could spark a revival in inflation.

2. Earnings

Investors hoping for another strong year in equity markets powered by U.S. corporate profits will get a clearer outlook this week, with a string of companies set to report fourth quarter earnings.

Key earnings reports will come from streaming giant Netflix (NASDAQ:NFLX), healthcare leader Johnson & Johnson (NYSE:JNJ), consumer goods powerhouse Procter & Gamble (NYSE:PG), and credit card issuer American Express (NYSE:AXP).

Earnings season kicked off last week with big banks reporting higher profits, fuelled by a surge in deal-making and strong equity market performance boosting trading revenues.

Overall, analysts expect S&P 500 companies to report a 10.4% year-over-year increase in fourth-quarter earnings, according to LSEG IBES data from January 15, cited by Reuters.

3. Davos

Global government and business leaders will attend an annual gathering of the World Economic Forum in Davos, Switzerland, starting on Monday.

A WEF survey released ahead of the gathering last week showed that armed conflict is the most severe risk to the global economy in 2025, followed by extreme weather.

Trump is set to address the meeting by video link on Wednesday. Ukraine's President Volodymyr Zelenskiy is also due to attend and will give a speech on Monday, according to the WEF organisers.

Among other global leaders due to attend the Davos meeting are European Central Bank President Christine Lagarde, European Commission President Ursula von der Leyen, UK Chancellor Rachel Reeves and China's Vice Premier Ding Xuexiang.

4. BOJ hike?

The Bank of Japan is to hold its first policy meeting of the year on Thursday and Friday.

In the run up to the meeting BOJ policymakers appeared to be priming markets for a possible rate hike, with both Governor Kazuo Ueda and his deputy Ryozo Himino saying the decision on whether to raise borrowing costs would be up for debate.

BOJ officials will have a few days to weigh up how Trump’s policies could ripple through financial markets before their decision.

A rate hike would narrow the gap between US and Japanese rates, which would bolster the yen. The yen has been hovering close to the 160 level against the dollar, prompting the BOJ to intervene in foreign exchange markets to support the currency.

5. Oil prices

Brent crude futures gained 1.3% last week while U.S. West Texas Intermediate crude futures climbed 1.7% for the week, as the latest round of US sanctions on Russia’s energy trade added to fears over potential supply disruptions.

Oil has risen by 10% so far this month, amid worries about the impact of more Western sanctions on Russian crude.

Energy traders are also weighing up the potential implications of Trump's return to the White House on Monday. Trump's pick for Treasury secretary said he was ready to impose tougher sanctions on Russian oil.

Meanwhile a blast of Arctic air has covered much of the US, sending temperatures plummeting. It is forecast to continue until mid-week, looking set to drive up heating oil demand.