By Cynthia Kim and Jihoon Lee

SEOUL (Reuters) - South Korea's central bank unexpectedly left its policy interest rate unchanged on Thursday, weighing the impact of its back-to-back cuts last year while supporting the won which weakened to a 15-year low versus the U.S. dollar in recent weeks.

The Bank of Korea held its benchmark interest rate at 3.00% at its monetary policy review, an outcome expected by only seven of 34 economists polled by Reuters. The remaining 27 had expected the bank to cut the rate by 25 basis points.

The decision is the first since impeached President Yoon Suk Yeol's attempt to impose martial law in early December threw Asia's fourth-largest economy into its biggest political crisis in decades. The turmoil prompted the government to cut its 2025 economic growth forecast to 1.8% from 2.2%.

The crash of Jeju Air flight 7C2216, which killed 179 people in the deadliest air disaster on South Korean soil, has also weighed on the economy.

On top of that, the won's slide has been a major concern among policymakers. In the final three months of 2024, the currency weakened 10.6% against the dollar, the biggest quarterly drop since the third quarter of 2008.

Local currency dealers said South Korea has been relying on smoothing operations in the onshore dollar-won market as well as the National Pension Service's currency hedging operations to support the won.

"(Thursday's rate decision) would be due to its (the BOK's) greater focus on economic and financial stability concerns, until political uncertainty eases. Instead of January, we expect the BOK to cut the policy rate again at its February meeting, after it revises its economic outlook." said Park Jeong-Woo, an analyst at Nomura Securities who was one of the seven analysts who correctly predicted the rate decision.

Analysts now see the central bank eying a more gradual pace of interest rate reduction in the year ahead.

Median forecasts in the survey showed one interest rate cut of 25 basis points this quarter and cuts of the same degree in both the second and third quarters taking the rate to 2.25%.

Market focus now switches to Governor Rhee Chang-yong's press conference at 0210 GMT, where the names of any dissenters to the policy decision could be announced. Dissenting votes typically lead to policy changes in subsequent months.

CARACAS (Reuters) - Venezuela inflation was 48% annually in 2024, the lowest in 12 years, Venezuelan President Nicolas Maduro told lawmakers in an annual address to the national assembly and other officials on Wednesday, just days after he was inaugurated for a third term.

Maduro, whose nearly 12 years in office have been marked by deep economic and social crisis and mass migration, was sworn in for a third term on Friday, despite a six-month-long election dispute and international calls for him to stand aside.

The government has employed orthodox methods to try to tamp down inflation, which has reached triple digits in recent years, with some success. Inflation was 189.8% in 2023, according to the central bank. Maduro said this month that the economy grew 9% last year.

By Lisa Baertlein and Ellen Zhang

LOS ANGELES/BEIJING (Reuters) - U.S. imports from China finished the year strong after some companies stockpiled shipments of apparel, toys, furniture and electronics ahead of President-elect Donald Trump's plan to impose new tariffs that could revive a trade war between the world's economic superpowers.

Trump, who has threatened to slap tariffs of 10% to 60% on goods from China, takes office on Jan. 20. During his first term, Trump mainly targeted Chinese parts and components. Economists and trade experts predict his next wave of tariffs could apply to finished goods.

"There has thus been an uptick in the exports of final goods from China to the U.S., as importers aim to front-run possible tariffs on consumer items," said Frederic Neumann, chief Asia economist at HSBC in Hong Kong.

Chinese trade officials on Monday said December exports surged to record levels and cited concerns about escalating trade protectionism in the U.S. and Europe.

The equivalent of 451,000 40-foot containers of goods from China landed at U.S. seaports in December, a year-over-year increase of 14.5%, according to trade data supplier Descartes Systems Group (NASDAQ:DSGX).

That capped a year when U.S. imports of bedding, plastic toys, machinery and other products from China rose 15% from 2023, according to Descartes.

While some U.S. retailers have rushed in goods to avoid the cost hit from potential new tariffs, teasing out the true effect on overall import gains is difficult because importers keep such data private. Further complicating the analysis, resilient U.S. shoppers have been fueling demand and some importers brought in safety stocks to protect against disruptions from Houthi attacks on shipping near the Suez Canal trade shortcut and a labor dispute at seaports on the U.S. East Coast and Gulf of Mexico.

Trump also has vowed to tariff goods from many other countries, including North American neighbors Mexico and Canada.

As a result, several categories of U.S. imports from all geographic sources posted meaningful gains during the fourth quarter, according to S&P Global Market Intelligence.

Textiles and apparel jumped 20.7%; leisure products, chiefly toys, gained 15.4%; home furnishings increased 13.4%; and household appliances and consumer electronics posted gains of 9.6% and 7.9%, respectively, according to S&P.

Consumer staples categories such as household and personal care as well as food and beverages, rose 14.2% and 12.5%, S&P said.

Investing.com-- Impeached South Korean President Yoon Suk Yeol was arrested by authorities on Wednesday following a botched attempt to impose military law in the country in late-2024, local media reports showed. 

Reports said that investigators had entered Yoon’s Presidential compound in their second attempt this month to carry out an arrest warrant, and had successfully apprehended the impeached president. 

Yoon will now be tried on charges of insurrection, after unsuccessfully attempting to impose martial law in December. The move was widely opposed by citizens and policymakers, sparking nationwide protests and calls for Yoon’s removal.

Deputy Prime Minister Choi Sang-mok assumed the role of acting President after South Korea’s parliament voted to impeach Yoon. 

South Korean markets- which were rattled by the political scandal in December- firmed on the prospect of some stability after Yoon’s arrest. The benchmark KOSPI index added 0.5% on Wednesday, while the won’s USD/KRW pair was flat. 

SEOUL (Reuters) - South Korea's capital markets in December experienced the largest foreign outflows since March 2020 as heightened political uncertainty hit investor sentiment, central bank data showed on Wednesday.

Foreigners last month extended their South Korean stock market selloff to a fourth straight month by selling a net $2.58 billion.

In the bond market, they turned net sellers for the first time in nine months, with a net outflow of $1.28 billion.

The monthly outflow of a combined $3.86 billion was the biggest since March 2020, when global financial markets were hit by the COVID-19 pandemic, according to the Bank of Korea.

Last month, the won weakened 5.2% against the dollar, marking its largest monthly decline in 22 months on heightened political uncertainty after President Yoon Suk Yeol's short-lived martial law on Dec. 3.

Investing.com-- U.S. stock index futures rose slightly on Tuesday evening as caution grew ahead of key consumer inflation data that is likely to factor into the Federal Reserve’s outlook on interest rates. 

Futures were muted after a choppy session on Wall Street, as softer than expected producer inflation data provided only limited relief over a hawkish outlook for interest rates. 

Investors were also cautious before a string of major bank earnings on Wednesday. 

S&P 500 Futures rose 0.1% to 5,886.25 points, while Nasdaq 100 Futures rose 0.1% to 20,949.50 points by 18:38 ET (23:38 GMT). Dow Jones Futures rose 0.1% to 42,792.0 points. 

Among individual movers, Tesla Inc (NASDAQ:TSLA) fell 0.4% after the Securities and Exchange Commission sued CEO Elon Musk for failing to disclose a substantial stake in Twitter during his purchase of the social media firm. 

CPI data awaited for more rate cues 

Focus was now squarely on upcoming consumer price index inflation data, which is expected to provide more insight into the Fed’s plans for interest rates.

The reading is due at 08:30 ET (13:30 GMT), and is widely expected to show inflation remained sticky in December. 

Sticky inflation gives the Fed less impetus to cut interest rates, with the bank having warned as much during its December meeting. 

Markets are positioning for a much slower pace of interest rate cuts in 2025- a trend that could bode poorly for risk-driven assets. Wall Street indexes had slumped through late-2024 on this notion.

PPI data offers limited relief

Producer price index inflation data released on Tuesday read softer than expected for December. But the print provided little relief to markets, given that some measures of inflation, which also factor into PCE price index data, remained high. PCE data is the Fed’s preferred inflation gauge, and is due later in the month. 

On the inflation front, markets were also on edge over incoming President Donald Trump, who will take office from January 20. Fed officials recently expressed concerns that Trump’s plans for hefty trade tariffs will underpin inflation, keeping rates higher in the long term.

A Bloomberg report showed this week that Trump’s team was also considering a more staggered approach to tariffs. 

Wall St nurses weak start to 2025; earnings awaited 

Wall Street indexes marked a chippy session on Tuesday amid persistent weakness in technology stocks. They were also nursing a weak start to the year after tumbling from record highs through December. 

The S&P 500 rose 0.1% to 5,842.86 points on Tuesday, while the NASDAQ Composite fell 0.2% to 19,044.39 points. The Dow Jones Industrial Average rose 0.5% to 42,518.28 points. 

Focus this week is also on a string of key bank earnings. Prints from JPMorgan Chase & Co (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Goldman Sachs Group Inc (NYSE:GS), and Citigroup Inc (NYSE:C) are due on Wednesday. 

WASHINGTON (Reuters) - The U.S. government posted an $87 billion budget deficit in December, reduced partly by a shift of benefit payments into November but capping a record $711 billion deficit for the first three months of the 2025 fiscal year, the U.S. Treasury Department said on Tuesday.

The Treasury, releasing its final budget report before President-elect Donald Trump takes office next week, said that the $711 billion October-December deficit was $201 billion, or 39% higher, than the $510 billion deficit in the same period a year earlier as outlays grew sharply and revenues declined slightly.

For December, the $87 billion deficit was reduced by $51 billion by the calendar benefit shift, and compared to a $129 billion deficit in December 2023. Receipts for the month were up 6% to $454 billion, while outlays as reported were down 3% to $541 billion.

By David Shepardson

WASHINGTON (Reuters) -Traffic in Manhattan's central business district fell by 7.5% last week and 273,000 fewer cars entered the borough's central business district after the first congestion pricing fee in the U.S. took effect on Jan. 5, New York City transit officials said on Monday.

The fee is designed to reduce traffic and raise billions for mass transit, with most of the revenue generated targeted to upgrade the city's subway and bus systems.

"The early data backs up what New Yorkers have been telling us all week – traffic is down, the streets feel safer, and buses are moving faster," said Janno Lieber, head of the Metropolitan Transportation Authority. Overall travel times are 30-40% faster on inbound river crossings into Manhattan, which has the most congested traffic in the United States.

Under the program, passenger vehicles are charged $9 during peak periods in Manhattan south of 60th Street. Trucks and buses pay up to $21.60. The fee is reduced by 75% at night.

The fee went into effect after neighboring New Jersey failed to convince a judge to halt it. The city rushed to implement the charge before President-elect Donald Trump's inauguration on Jan. 20. Trump, who has a Manhattan residence, opposes the fee and said he would seek to block it.

The MTA said less traffic means faster bus speeds, especially in the morning peak period.

Charged via electronic license plate readers, private cars pay once a day regardless of how many trips they make into the central business district. Taxis pay 75 cents per trip and ride-share vehicles reserved by apps like Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) pay $1.50 per trip.

A few other cities around the world already have congestion pricing systems. London, which implemented its system in 2003, now charges 15 pounds ($18.33). Singapore and Sweden also have congestion pricing plans.

The MTA has said the program will eventually result in 80,000 fewer cars a day, about an 11% reduction. Before the fee, the MTA said more than 700,000 vehicles entered the Manhattan central business district daily, slowing traffic to around 7 mph (11 kph) on average, which is 23% slower than in 2010.

The city estimates the congestion charge will bring in $500 million in its first year. New York Governor Kathy Hochul said the money would underpin $15 billion in debt financing for mass transit capital improvements, with 80% of the money to be spent on the subway and bus system, and the other 20% spent on the MTA's two commuter rail systems.

Investing.com-- China’s economic growth is expected to slow to 4.0% in 2025 as it contends with potential US tariff hikes and ongoing property sector challenges, according to a UBS research note.

The tariffs, anticipated to be announced in the first quarter and implemented in stages starting in the third quarter, are projected to reduce China’s GDP growth by over 150 basis points through weaker exports and manufacturing investment, UBS analysts said in a note.

While the property sector remains under pressure, UBS forecasts smaller declines in sales and investments compared to previous years.

Recent policy easing, including mortgage rate cuts and urban renovation initiatives, has shown some effect, particularly in major cities. However, elevated inventory levels and tepid household sentiment continue to weigh on the market, with nationwide stabilization not expected until 2026, analysts wrote.

In response to these challenges, UBS anticipates increased fiscal and monetary policy support. The government is likely to announce measures during the March National People’s Congress meeting, including a higher fiscal deficit target of around 4% of GDP and the issuance of special government bonds.

UBS also expects a policy rate cut of 30–40 basis points in 2025 and further easing in 2026.

Lingering deflationary pressures, with core consumer inflation hovering around 0%, add to the economic concerns. The renminbi is expected to depreciate modestly to 7.6 against the U.S. dollar by the end of 2025 due to tariff impacts and a wide U.S.-China yield spread, according to UBS.

UBS highlights the potential for surprises, including stronger-than-expected U.S. economic growth or a faster property market recovery, which could alter China’s outlook. However, uncertainties surrounding global trade and domestic policy effectiveness remain significant hurdles for sustained growth.

By Leika Kihara

YOKOHAMA (Reuters) -The Bank of Japan will debate whether to raise interest rates next week, as prospects of sustained wage gains heighten and the U.S. policy outlook becomes clearer in President-elect Donald Trump's inaugural address, Deputy Governor Ryozo Himino said.

In a speech to business leaders in the city of Yokohama, Himino said on Tuesday it would "not be normal" for real interest rates to remain negative once Japan had overcome shocks and factors that caused deflation.

Various surveys and reports from the central bank's regional branches had heightened hopes that wage growth would remain strong this year, he said.

Himino also said the U.S. economy was likely to remain strong for the time being, and the "broad direction" of U.S. economic policy would likely become clear in Trump's inaugural address on Jan. 20.

"The board will discuss whether to raise interest rates next week and reach a decision, based on the economic and price projections laid out in our quarterly outlook report," he said.

The remarks come ahead of the BOJ's two-day policy meeting concluding on Jan. 24, when some analysts expect the bank to raise short-term rates from the current 0.25%. The board will also issue fresh quarterly growth and price forecasts that serve as the basis for setting monetary policy.

Himino's views on wages and the U.S. policy outlook have been closely watched by markets, after Governor Kazuo Ueda cited uncertainty over the domestic wage outlook and Trump's policies as reasons to hold off raising rates last month.

In a quarterly report analysing regional economies released last week, the BOJ said wage hikes were spreading to firms of all sizes and sectors, signalling that conditions for a near-term rate hike were continuing to fall into place.

Prospects of sustained wage gains and the increase in import costs due to a weak yen have heightened attention within the BOJ to rising inflationary pressures that may lead to an upgrade in its price forecast this month, sources have told Reuters.

The BOJ ended negative interest rates in March and raised its short-term rate target to 0.25% in July on the view Japan was on track to durably meet the bank's 2% inflation target.

Ueda has signalled readiness to raise rates further if broadening wage hikes underpin consumption and allow companies to keep hiking prices not just for goods but services.