Japan revised its second-quarter GDP growth upward to 1.4 percent following strong capital expenditure. Meanwhile, China introduced new energy tax policies and faced steeper property revenue declines, as geopolitical tensions fueled military clashes and energy sector strains across Asia.
01Macro
Japan Upgrades Q2 GDP Growth on Slight Capex Improvement
Upwardly revised growth paired with accelerating real wage expansion removes the economic justification for the central bank to delay policy rate normalization.
channelnewsasia.com reports that Japan's economy expanded at an annualized 1.4 per cent in the second quarter, up from the initial estimate of 1.1 per cent. Business spending fell 0.9 per cent in the quarter, which was a smaller decline than the preliminary 1.2 per cent drop. by Japanese firms on plant and equipment rose 1.6 per cent from a year earlier. Private consumption was flat, while external demand added 0.5 percentage point to growth. -adjusted real wages rose 2.4 per cent in July from a year earlier, marking the largest increase since May 2021. Swap rates indicate a 98 per cent probability that the Bank of Japan will raise its policy rate by 25 to 1.25 per cent at its September meeting.
Japan Q2 Annualized GDP Growth (%)
Annualized GDP growth was revised up by 0.3 percentage points.
Goldman Sachs Warns China's New Home-Presale Rules Could Cut Land Sales 30%
Eliminating advance presale capital removes the primary cash engine developers use to buy land, directly transferring property sector liquidity crunches onto municipal balance sheets.
Goldman Sachs raised its forecast for China land sale declines to 30 percent, up from a previous projection of 20 percent. Economist Lisheng Wang pointed to Beijing's policy shift away from the traditional presale model toward completed-home sales, which restricts the upfront developers use to fund new land purchases. Land sale revenue already fell 30.8 percent year-on-year in the first seven months of 2026, according to Ministry of Finance data. Local governments face severe fiscal pressure from the real estate slump, with Goldman expecting the downturn in land sale receipts to persist through 2027 and potentially drop up to 90 percent from its peak in mid-2021. The transition to completed-home sales requires developers to deliver properties before collecting full purchase prices, starving distressed builders of the cash flows that previously serviced their and sustained land bank .
China Land Sales Revenue Decline Forecast (%)
Goldman raised its land sales decline forecast from 20 percent to 30 percent.
China Halts Approvals for New Battery Storage Plants
Targeting standard lithium-ion cells with consumption taxes while exempting next-generation chemistries uses fiscal policy to force battery manufacturers from oversupplied commodity markets into capital-intensive technology races.
Oilprice.com reports that China has paused approvals for new battery storage factories not yet under construction to review existing and planned capacity. The temporary suspension mirrors government interventions in the electric vehicle and solar sectors, where years of subsidies fueled chronic overcapacity and destructive price wars. Solar equipment manufacturers had increasingly into battery storage to offset crashing margins in their core panel businesses. To further cool the broader manufacturing space, authorities introduced new consumption taxes taking effect in September 2026. These rules levy a 2 percent tax on lithium-ion and other standard battery types, stepping up to 4 percent in September 2027, while exempting new technologies like sodium-ion and solid-state cells through December 2028.
Battery and Photovoltaic Consumption Tax Rates (%)
Standard battery taxes double from 2% in 2026 to 4% in 2027.
Uzbekistan Reduces Nuclear Energy Cooperation With Russia
Sovereign clients diversifying engineering partners away from state monopolies like Rosatom shifts execution risk to multi-vendor consortia while creating integration opportunities for western technology reviewers.
oilprice.com reports that Uzbekistan is scaling back its reliance on Russia's Rosatom for the construction of the country's first nuclear power plant, a $9.5 billion project. President Shavkat Mirziyoyev endorsed a new consortium to oversee the development, planning to bring in foreign engineering firms for independent technological and safety reviews while increasing the share of work handled by local contractors. Uzbekistan aims to raise domestic production in the project from 21 percent to at least 30 percent, push national enterprises to handle 65 percent of construction and installation work, and employ 7,000 local workers. The shift follows disagreements over Russian financing plans and delays that pushed back the initial March construction start. The project is designed to include two 1 gigawatt VVER-1000 reactors and two 55 megawatt RITM-200N models, alongside housing for up to 33,000 workers and their families.
Uzbek Nuclear Plant Domestic Production Share (%)
Uzbekistan targets raising domestic production to 30 percent from 21 percent.
India Increases Rail Coal Deliveries as Power Plant Supplies Drop
Seasonal monsoon rail bottlenecks colliding with heat-driven burn rates force state miners to prioritize utility rakes, squeezing non-power industrial consumers reliant on the same transport network.
Oilprice.com reports that India is ramping up rail coal deliveries to thermal power plants as stockpiles at more than 50 facilities drop below critical levels. The number of plants with inventories under 25 percent of normative requirements rose to 53 as of September 5, up from 45 on August 26, according to Central Electricity Authority data cited by the Ministry of Coal. Hotter temperatures driven by an El Nino pattern have spiked electricity demand while monsoon rains disrupt transport from domestic producing states. Coal India Limited, SCCL, and captive mine operators are increasing rake loading to replenish the depleted reserves. BigMint data indicates power plant inventories declined by 15.5 percent between August 1 and 23 as burn rates outpaced incoming shipments.
Plants with Critical Coal Stocks (Count)
Plants with critical coal stocks rose from 45 to 53 between August and September.
High Crude and LNG Prices Weigh on India's Oil and Gas Sector
When domestic pump prices fail to track landed crude and shipping costs, Indian refiners absorb global supply shocks directly onto their balance sheets through negative marketing margins.
Oilprice.com reports that soaring and prices are pressuring the marketing margins of India's oil and gas sector. Asia's spot LNG price surged last week to its highest level since 2022, rising 61% from a year earlier and 22% over the past three months. The fallout from the Iran war has disrupted global trade flows, leading to reduced oil supplies from the Middle East and higher shipping risks in the Strait of Hormuz. Freight rates on the key route from Ras Tanura to India have jumped by more than 400% since February 28. Consequently, India paid 60% more for crude oil imports in the April-June quarter compared to the previous year, with July imports running 41% higher year-over-year. Gasoline and diesel marketing margins remain negative as refiners face compressed profitability.
LNG Price Growth (%)
Asia spot LNG prices rose 61 percent over the year and 22 percent in three months.
US Military Strikes Iranian Oil Tankers Following Attacks on Navy Warships
Targeting state-owned energy transport assets converts regional naval escalation directly into a physical supply bottleneck, forcing maritime insurers to reprice risk across all Persian Gulf crude transit.
The US military permanently disabled two Iran-linked oil tankers and destroyed a third after the Islamic Revolutionary Guard Corps launched ballistic missiles at two US Navy warships in the region. Central Command chief Admiral Brad Cooper said the retaliatory strike targeted vessels part of a shadow network funding the IRGC, warning that the US would destroy Iran's oil fleet if its warships are targeted. Iranian state media confirmed the attacks, reporting that one tanker was hit near the Kharg Island export hub and others near Jask and in the Gulf of Oman. The strikes followed an exchange of fire that marked a renewed escalation in the six-month conflict, which has disrupted global energy supplies and choked off traffic through the Strait of Hormuz. In response to the US action, Iran's Islamic Revolutionary Guard Corps claimed it targeted three oil tankers using unauthorized routes in the Strait of Hormuz alongside three US-affiliated vessels. Defense Secretary Pete Hegseth reiterated on social media that the US will sink Iranian oil tankers if attacks on Navy ships continue. Meanwhile, the Department separately imposed sanctions on a Turkish investment bank and its subsidiaries for allegedly helping transfer Iranian oil revenues. The escalating conflict has kept retail fuel prices elevated, with the national average gasoline price standing above four dollars per gallon.
Economic resilience in Japan contrasts with severe policy interventions and fiscal pressure in China and India. The key friction is whether escalating Middle East hostilities will drive energy prices high enough to derail regional growth.
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