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Taiwan is working to increase energy inventories in a move to boost the island's resilience in the event of a crisis, a deputy economy minister said, as China stepped up military pressure to try to force Taiwan to accept Chinese rule.

China's blockade drills around Taiwan in August after a visit to Taipei by U.S. House Speaker Nancy Pelosi have heightened concerns on the island about the prospect of an attack by its giant neighbour, which has not ruled out using force to bring democratically governed Taiwan under its control.

Tseng Wen-Sheng, one of Taiwan's deputy economy ministers, told Reuters in an interview the government is ramping up its natural gas and coal inventories, part of President Tsai Ing-wen's push to strengthen the island's "resilience" in an emergency amid growing global geopolitical and economic uncertainties.

"When it does happen, we need to be able to undertake pressure to a certain degree," Tseng said, answering questions on the prospect of a Chinese blockade or attack on trade-reliant Taiwan, which imports 98% of its energy.

By building new storage facilities across Taiwan, he said, the ministry is planning to raise natural gas inventories to more than 20 days by 2030, up from the current level of 11 days.

Tseng said coal inventories would be increased in the coming years while those for crude would continue at a level of more than 100 days. He declined to give details as making such information public "does no good to Taiwan."

China claims Taiwan as its own territory and has ramped up military and political pressure against the island over the past two years. Taipei strongly rejects Beijing's sovereignty claims and vows to defend its freedom and democracy.

Taiwan authorities have been looking at Russia's invasion of Ukraine and the country's resistance in the event China ever makes good on its threat to attack the island, including studying war tactics and using satellites to communicate with the outside world. (Reuters)

The Bank of Japan is expected to raise its inflation forecasts on Friday but keep ultra-low interest rates steady in a show of resolve to support the fragile economy, even at the cost of accelerating an unwelcome fall in the yen to fresh 32-year lows.

Authorities have struggled to tame the yen's relentless declines as investors focus on the BOJ's ultra-low interest rates that make it an outlier among a global wave of central banks tightening policy to combat soaring inflation.

Given rising commodity prices and the boost to import costs from the yen's slump, Japan's core consumer inflation rate hit an eight-year high of 3% in September and is seen staying above the BOJ's 2% target for the rest of this year, analysts say.

But with inflation modest compared with western nations and Japan's economic recovery still fragile, the BOJ is set to leave intact its minus 0.1% target for short-term interest rates and the target for the 10-year bond yield at around 0% at its two-day policy meeting that ends on Friday.

"It's hard to expect the BOJ to take monetary action to stem the yen's fall as currency policy falls under the jurisdiction of the finance ministry," said Mari Iwashita, chief market economist at Daiwa Securities.

Some market participants speculate the BOJ could tweak its dovish policy guidance amid growing public discontent over the weak-yen effect of its ultra-loose monetary policy.

"With the Fed determined to combat inflation, a minor policy tweak by the BOJ will do little to narrow the gap between U.S. and Japanese monetary policy," said Iwashita.

In fresh quarterly projections due on Friday, the BOJ is expected to slightly revise up its consumer inflation forecasts for the year ending in March 2023 and the following year, said five sources familiar with the bank's thinking.

The upgraded forecast will still show core consumer inflation sliding below the BOJ's 2% target next fiscal year as the impact of one-off factors, such as past rises in fuel costs, dissipate, the sources said.

The board will likely cut its growth forecasts for the current and following fiscal years, as global recession fears cloud the outlook for the export-reliant economy, they said.

Investors' attention will be focused on Governor Haruhiko Kuroda's post-meeting briefing for his views on the economic fallout from the yen's sharp declines, and clues on the timing of an eventual exit from the ultra-loose policy.

In July, the BOJ forecast core consumer inflation to hit 2.3% in fiscal year 2022 before slowing to 1.4% the following year. It projects the economy to expand 2.4% in the current fiscal year and rise 2% in fiscal 2023. (reuters)

Japanese Economy Minister Daishiro Yamagiwa plans to step down on growing calls from the opposition to resign due to his insufficient explanations about his ties to the controversial Unification Church, public broadcaster NHK said on Monday.

His resignation would be a blow to Prime Minister Fumio Kishida as revelations about connections between nearly half of the lawmakers at the ruling Liberal Democratic Party (LDP) and the church came under the spotlight following the July assassination of former Prime Minister Shinzo Abe. (Reuters)

An Ethiopian government delegation and rival Tigray forces were due to meet in South Africa for the first formal peace talks since war broke out two years ago.

The talks will take place as Ethiopian forces and their allies make significant battlefield gains in the northern Tigray region, where they have captured several large towns in the past week.

The war is rooted in a power struggle between the federal government and Tigray authorities, who led the country's ruling coalition until Abiy Ahmed became prime minister in 2018.

The conflict has killed thousands, displaced millions and left hundreds of thousands on the brink of famine.

Ethiopia's government said in a statement its delegation had left for South Africa to participate in the talks, which are being mediated by the African Union.

"The Government of Ethiopia views the talks as an opportunity to peacefully resolve the conflict and consolidate the improvement of the situation on the ground," it said.

Kindeya Gebrehiwot, a spokesman for the Tigray forces, said the Tigrayan delegation had already arrived.

He said on Twitter the focus of the talks would be on immediate cessation of hostilities, unfettered humanitarian access, and the withdrawal of Eritrean forces, who have fought alongside Ethiopian federal troops during the conflict.

The Tigray delegation is being led by one of its top generals, Tsadkan Gebretensae, and spokesman Getachew Reda, an official familiar with the talks told Reuters.

The delegation arrived on Sunday on a U.S. military aircraft, accompanied by the U.S. special envoy to the Horn of Africa, the official said.

Both sides had committed to the talks in South Africa earlier this month, but they were delayed for logistical reasons. (Reuters)