☕️ Good morning, friends,

we’ve written here before about Japan’s problem bears. The latest weapon in this fight: AI drones.

They detect the animals even when they’re barely visible and send the location straight to the authorities’ smartphones.

High-tech instead of hunting towers. Very Japan.

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Japan’s rate move. The central bank raised its policy rate to 0.75%, the highest level since 1995. Markets barely reacted, with the Nikkei up around 1%.

Hong Kong stays split. Softer U.S. inflation eased rate pressure and lifted equities. The Hang Seng rose for a third straight session, while tech lagged amid ongoing AI valuation concerns.

Record inflows into China A500 ETFs signal renewed appetite for mainland stocks, which track the 500 most important mainland-listed Chinese companies.

TOP BIT

👟 The Swoosh Is Out of Breath: Stock Plunges 10%

Nike beat analyst expectations, yet the stock still tanked.

While the North American market remains stable, a double-digit sales slump in China is triggering panic on the markets. Local rivals are making life increasingly difficult for the US sportswear giant.

Details

📉 The China shock: Greater China revenues fell 17% to USD 1.42 billion. Most striking: Digital sales collapsed by more than a third, as Chinese consumers turn away from Nike’s own apps.

🧗 Tariffs squeeze margins: Higher US tariffs are weighing on gross margin, which dropped to 40.6%. To reduce exposure, Nike plans to sharply cut production in China by next summer.

🐉 Local champions pull ahead: Anta Sports overtook Nike in revenues three years ago and continues to defend its top spot. Li-Ning is also gaining market share with a stronger price-performance mix.

⚡ Speed beats mythology: Chinese brands bring new products from concept to shelf in three to six months. Nike takes longer. In a market driven by constant trend cycles, that becomes a structural disadvantage.

🧠 Pragmatism beats myth: Chinese millennial shoppers are increasingly trading the “brand premium” for functionality. Instead of Jordan mythology, quality, comfort, and price now matter most.

Who’s tripping Nike up in China?

• Anta is already the market leader in China and, with brands like Fila and Arc’teryx in its portfolio, has even pushed Adidas down to number three globally.

• Li-Ning is national pride in sneaker form. Strong designs and aggressive pricing make the brand especially popular with younger consumers.

• White-label brands score with solid materials and lower prices. They are strong online, data-driven, and extremely fast.

📊 All Details & Data: Yahoo Finance, SCMP, WWD, IBD

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NUMBER OF THE DAY

That’s how many victims of the data breach at Korea’s Coupang have now filed lawsuits against the e-commerce giant.

🧑‍⚖️ Class action takes shape: Plaintiffs are initially seeking ~$68 per person, with plans to raise claims to up to $200. In total, potential compensation could reach around $55M. Plus a separate class action in the US.

🔓 A leak with lasting fallout: Data from roughly 33.7 million users is affected. Authorities are investigating whether and to what extent the leaked information has already been used for voice phishing and smishing.

Watch: Data security is turning into an existential issue. Korea’s Fair Trade Commission is reviewing a possible business suspension. If a shutdown would hurt consumers too much, a hefty fine could be imposed instead.

MARKET BIT

🏦 Japan’s rate pivot: Bank of Japan lifts interest rates to 30-year high

💴 Highest level since 1995: The BOJ hiked interest rates to 0.75 percent on Friday. Further steps are on the table if wages and inflation continue to move in tandem. Real rates remain deeply negative.

💱 Yen stays calm: Despite the hike, the yen weakens as the move was fully priced in and Ueda stayed vague on “what’s next.” More expensive yen funding slows carry trades, while traders wait for clearer timing signals.

📉 Growth on shaky ground: Japan’s GDP shrank 0.6% q/q in Q3, or -2.3% annualized. With annual growth around 1.1%, the outlook remains fragile, forcing the BOJ into a tightrope walk between price stability and growth.

🦅 Fuel for the hawks: Consumer prices have stayed above 2% for 44 straight months, with core inflation around 3%. That strengthens the case for BOJ hardliners to keep tightening despite weak growth.

⏳ Next steps unclear: More rate hikes are possible, but not pre-committed. The BOJ sees the “neutral rate” somewhere around 1–2.5%, making Ueda’s guidance the next key market trigger.

Background

Japan is gradually exiting its ultra-loose policy era shaped by decades of deflation. Inflation is now proving sticky, driven by higher food and import costs and a weak yen, while the BOJ bets on a sustained wage–price cycle.

Higher rates are meant to cool demand and price pressures. But with fragile growth and heavy public debt, every step higher raises the risk of tipping the economy into recession.

👉🏻 Full Story: Nikkei, CNBC, SCMP, Japan Today

WORD OF THE WEEK

🍜 Mukbang 먹방

In Korea, there is a word for the trend of watching someone eat large amounts of food online.

• Mukbang (먹방) combines the Korean words for “eating” (meokneun) and “broadcast” (bangsong) to mean “eating broadcast.

Beyond entertainment, mukbang has become a massive industry, with popular hosts earning significant income through sponsorships, ads, and live-stream donations.

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HIGHLIGHTS

🤖 Japan bets big on home-grown AI: Japan is putting serious money behind its AI ambitions, pledging about US$6 billion over five years to build a domestic foundation model that can compete with the US and China. This new SoftBank-backed company brings together top engineers, secures critical chips and data centres, and prioritises physical AI that combines robotics and intelligence as national priority.

🐕 China doubles down on domestic police dogs: China is pushing police nationwide to favour a home‑grown Kunming dog breed over German Shepherds, Rottweilers and other foreign pups as part of a broader drive for self‑reliance in police dog technology. The locally bred dogs are promoted as more versatile for sniffing out narcotics, explosives, tracking suspects, and performing a wider range of law‑enforcement tasks.

🎥 New Avatar starts slow globally but soars in China: Avatar: Fire and Ash opened to $345million worldwide, falling short of its predecessor’s $435 million debut, and underperforming especially in key markets like the U.S. and Canada. Despite the weaker global start, the film has been hugely popular in China, where enthusiastic audiences drove strong ticket sales, making it one of the top-performing releases in the country.

COUNTRY READS

🇮🇳 China eases visa rules for India, aiming to attract bigger share of India’s US$21.6 billion outbound travel market. More on this.

🇰🇷 Samsung is bringing Google’s Gemini AI into its new smart refrigerator to add AI features for smarter food and home interaction. More on this.

🇯🇵 Japan’s M&A market is heading for a record year, with deal volume nearing US$350 billion. More on this.

BITS TO DO

✅ Wow your friends with adorable snowman truffles.
✅ Devour Hokkaido king crab in Sapporo this January.
✅ Check out Japan’s newest high-tech spoon.
✅ Forget about Santa and see who else shows up on Christmas.
✅ Save on unnecessary fees when shopping internationally and pay directly in multiple currencies.*

_{* A message from our partner. Airwallex meets the highest international security standards, including PCI DSS, SOC1, and SOC2 compliances. More info here.}

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