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NATO will set up a liaison office in Tokyo in 2024 and use it as a hub for cooperation with South Korea, Australia, New Zealand and Japan, the Nikkei reported on Tuesday.

The Japanese ambassador to the United States said in May that the U.S.-led military alliance was planning a Tokyo office, the first in Asia, to facilitate consultations in the region - a plan that French President Emmanuel Macron objected to.

The report added that NATO will deepen collaboration with its four major partners in the Pacific, preparing bilateral cooperation documents with each, which will be used as a base for collaboration on issues such as cybersecurity and space.

Japanese Prime Minister Fumio Kishida said last month his nation has no plans to join NATO as a member or semi-member state, and there were media reports at the time that Kishida was arranging to attend a NATO summit in Lithuania in July.

South Korea's presidential office said they had no comment when asked about the report. (Reuters)

The New Zealand central bank’s aggressive hiking of the cash rate likely pushed the country into a technical recession in the first quarter, a Reuters poll found, giving traction to the idea the cash rate may have peaked.

Gross domestic product (GDP) is expected to be down 0.1% in the March quarter, below the Reserve Bank of New Zealand's (RBNZ) forecast of 0.3% growth, according to a Reuters poll of 13 economists.

This would mean the country moved into a technical recession - two consecutive quarters of negative growth - after the economy contracted by 0.6% in the fourth quarter.

New Zealand's central bank last month signalled it was done tightening after raising rates by 25 basis points to the highest in more than 14-years at 5.5%, ending its most aggressive hiking cycle since 1999.

Yet a handful of economists think the boost to the economy from historically high migration and the return of tourism might force the central bank to do more. The markets still give a 50% chance that there will be a further 25 basis point hike by October.

“Most forecasters, ourselves included and RBNZ and Treasury up until the budget, were all forecasting a recession to start about now. The fact that it started nine months ago, just shows us that we're on a much weaker footing than what we thought,” said Kiwibank chief economist Jarrod Kerr.

He said he expects the next cash rate move to be a cut.

The economy in the first quarter was hurt by Cyclone Gabrielle and the Auckland flash floods, which caused as much as NZ$14 billion ($8.6 billion) in damage. They reduced farm production, hurt tourism and slowed consumer spending.

However, the data has been volatile of late and a number of economists expect growth to be weak or flat rather than negative.

“Whether or not it's weak but weakly positive or weak but weakly negative it is still weak and in terms of the momentum of the economy that’ll be what’s important for the Reserve Bank,” said principal economist at Infometrics Brad Olsen. (Reuters)

Japanese Prime Minister Fumio Kishida is set to unveil on Tuesday a package of measures aimed at reversing the dwindling birthrate, by increasing payouts to families with children.

The announcement of his flagship policy comes amid market speculation that Kishida will dissolve parliament this week and call a snap election, a move that could heighten calls from within his ruling party for big spending.

Although an election for parliament's powerful lower house is not due until late 2025, Kishida, who swept to power in October 2021, is keen to boost his grip on power in the party ahead of a leadership race next September, analysts say.

The package, which Kishida is likely to explain at a press conference, may help his party appeal to the public with promises of payouts.

Kishida has said he hopes to double child care spending, now about 4.7 trillion yen ($33.7 billion), by the early 2030s.

Under the plan, the government is likely to earmark about 3.5 trillion yen annually for the next three years for child care allowances and support for those taking child care leave.

The government will also urge companies to allow employees to choose more flexible working styles such as taking three days off a week, according to a draft of the package obtained by Reuters.

Analysts, however, doubt whether the package will do much to stem a chronic decline in the birthrate and Japan's rapidly ageing population.

"While the steps could help families with children, the real problem that must be dealt with is how to support low-income households unable to get married," said Toru Suehiro, chief economist at Daiwa Securities.

There is uncertainty on how the government will fund the measures, with Kishida ruling out the chance of a near-term tax hike, stoking fears of a worsening of Japan's already tattered finances.

The government will work out the details of securing stable sources of funding by year end, officials have said.

Japan's birthrate has been on a steady decline despite a series of government initiatives to reverse the trend, dropping to a record low of 1.26 last year from 1.57 in 1990, government data shows. (Reuters)

China is willing to begin talks on a free trade agreement with Honduras "as soon as possible", Chinese President Xi Jinping said on Monday, during the first visit by the Central American country's president since forming diplomatic ties in March.

Honduras' President Xiomara Castro is on a six-day official visit to China. She launched diplomatic relations with Beijing after cutting ties with Taiwan. The country is also seeking support from China to mitigate its debt burden.

"You have resolutely fulfilled your election promise of establishing diplomatic relations with China, made a historic decision, and demonstrated your firm political will," Xi told Castro during talks in Beijing.

China will actively promote Honduran products to enter the Chinese market, Xi was quoted as saying by state broadcaster CCTV.

Chinese customs said on Monday it had approved the import of Whiteleg shrimp from Honduras.

China also encourages Chinese enterprises to participate in Honduras' projects in areas including energy, infrastructure and telecommunications, CCTV cited a joint declaration as saying.

The Honduran side is willing to provide policy support and facilitation, CCTV reported.

The Chinese leader also emphasised that both sides should deepen political mutual trust, and uphold the "One-China" principle.

"One-China principle is the primary premise and political foundation for the establishment of loyal diplomatic relations and the development of bilateral relations," Xi said.

When Honduras ended its decades-long relationship with Taiwan, the island's foreign minister accused it of demanding exorbitant sums before being lured away by Beijing.

China claims democratically ruled Taiwan as its own territory with no right to state-to-state ties, a position Taipei strongly rejects. China demands that countries with which it has ties recognise its position.

The Honduran foreign ministry said at the time it recognised the People's Republic of China as the only legitimate government that represents all of China and that Taiwan was an "inseparable part of Chinese territory".

The United States is watching with concern as China expands its footprint in its backyard by taking away Taiwan's Central American allies, and has repeatedly warned countries not to believe China's promises of aid.

Xi said that China supports Honduras' "independent choice of development path in line with its national conditions", and opposes any external interference in the Central American country's internal affairs. (Reuters)