Reuters World News - Japan’s PM, Ukraine-Russia, US inflation and Iran’s ceasefire demand

Episode Date: August 14, 2024

Japan's Prime Minister Fumio Kishida says he will step down next month, succumbing to public disaffection over political scandals and rising living costs. Ukraine has pounded Russian regions with missiles and drones as Kyiv says it is advancing deeper into Russian territory. Only a ceasefire deal in Gaza would hold Iran back from direct retaliation against Israel for the assassination of Hamas leader Ismail Haniyeh on its soil, three senior Iranian officials have said.  Find our recommended read here. Sign up for the Reuters Econ World newsletter here. Listen to the Reuters Econ World podcast here. Find the Recommended Read here.   Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit megaphone.fm/adchoices to opt out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, Japan's Prime Minister steps down after scandals and a cost of living crisis. Ukraine says it's advancing deeper in the biggest incursion into Russian territory for decades. Iranian officials say only a ceasefire in Gaza will delay their retaliation against Israel, plus more promising data on inflation as the Fed is a September rate cut. It's Wednesday, August 14th. This is Reuters World News, bringing you every. everything you need to know from the front lines in just 10 minutes every weekday. I'm Tara Oaks in Liverpool.

Japanese Prime Minister Fumio Kashida has said he will step down in September. His announcement ends a three-year term marred by political scandals and rising living costs, triggering a contest to replace him. Sakura Murakami is in Tokyo. Prime Minister Kishida has really been struggling to regain his popularity after it, to plunge first about two years ago, when the ruling liberal democratic parties ties to the religious group, the Unification Church, came to light. And then again, when a slush fund of unrecorded political donations made at LDP fundraising events came to light, these kind of scandals

have really marked his leadership and his time being a prime minister. And also more broadly, during his tenure, people in Japan are seeing their wage increase being outpaced by rising prices. So the scandals have fed into the general discontent with the economy and with the ruling party, and Kishida's attempts to revive his political fate hasn't paid off. Thailand's constitutional court has removed Prime Minister Sretta Thavisen from office for violating the constitution over a cabinet appointment. The court said Sretta had grossly breached rules on ethics. The United Auto Workers Union says it has filed complaints,

with the National Labor Relations Board against Donald Trump and Elon Musk over attempts to threaten and intimidate workers. The UAW seized on Trump's remarks during his two-hour chat with Musk on X, but Trump complimenting the Tesla CEO's ability to cut costs by saying he would not tolerate workers going on strike. Secretary of State Anthony Blinken has criticized Israeli security minister Itamar Bengfair after he visited one of the most sensitive sites in the Middle East and Jews should be allowed to pray there.

The Alaksa Mosque is known to Jews as Temple Mount, but is holy to Muslims as well. Prime Minister Benjamin Netanyahu quickly denied there would be any change to rules prohibiting Jews from praying at the site. A New Zealand food charity has apologized for distributing dozens of pineapple-flavored candies that were found to be laced with potentially lethal amounts of meth.

The Auckland City Mission says three people sought medical treatment after tasting the sweets, which had been donated by an unknown member of the public. Wall Street rebounded strongly yesterday after data showed U.S. producer prices rose less than expected in July. That's keeping the Federal Reserve on track to cut rates in September

and investors in a good mood. But there's plenty of data coming up that the Fed will be watching closely. Dan Burns is our U.S. economics editor. First and foremost, we'll get the big measure of inflation, CPI coming out this morning. That's something that we're watching quite, closely. We'll get retail sales in the next day after that and a run of other labor data as we

move into September that will be very important for the Fed. Probably the biggest event between now and the September meeting, though, will be the big speech we're going to get from Fed Chair Jerome Powell next week at the Jackson Hole Economic Symposium. That will provide a forum for him to really set the stage for their next steps from here. And at this point, what would need to happen for the Fed not to cut rates in September? The data on inflation would have to be so off the charts bad for the Fed, starting with CPI today and other inflation figures to really reverse the momentum toward a rate cut. The claims and counterclaims continue over Ukraine's surprise incursion into Russia.

Russian commanders have said that the front in Kursk has stabilized, but Ukrainian President Volodymy Zelensky said his forces were continuing to advance. The White House has said Ukraine did not provide advance notice of its incursion, and the United States had no involvement in the operation. Although President Joe Biden has said the incursion created a real dilemma for Russian President Vladimir Putin, Rachel Armstrong is our Europe editor. Rachel, a dilemma for Putin, but mainly is this more an embarrassment for him?

There's not been an incursion like this into Russia since the Second World War. And while it's a tiny fraction of Russian territory, it still happened on such a scale that Moscow publicly has to address it head on. Initially last week, we saw public chastisement by the top brass of the officials who should have been protecting that area better. We've now shifted into portraying this as a brutal offensive by the Ukrainians against civilians, how they are smashing up people's houses, public infrastructure, how they are forcing 200,000 people out of their homes. What happens next? How do you see this developing? It's a big question is how do Russia and Ukraine manage their troops?

We've already heard reports that Russia has had to move troops from Kaliningrad. It's had to rush more troops to the borders of neighboring regions to Kyrsk, particularly in Belgarod. There are assessments from US intelligence that Russian soldiers inside Ukraine are being moved back into Russia. So there's an interesting calculus in terms of how Russia plays this defensively. Likewise for Keev, will it be willing to perhaps seed a bit of territory further in Ukraine if it can continue this kind of effort to distract Russia and force other Russian troops to be diverted? Or is Keev playing a straightest strategy and should we give more credence to the official line coming out of Ukraine, which is that it is trying to take out the areas just across the Russian border where Russia is

launching missile strikes into Ukraine from, and it wants no more than that. So there's a huge new strategy assessment that needs to be done. Over to the Middle East now, and the region is still bracing for Iran's promised retaliation against Israel over the killing of Hamas chief Ismail Hania in Tehran last month. But as the world awaits a response, three senior Iranian officials have told Reuters that only a ceasefire deal in Gaza would hold Iran back from direct retaliation. Don Durfey is our U.S. foreign policy editor. Don, what can you tell us about Iran's current stance here?

For a couple of weeks, we've been anticipating that Iran and Hezbollah would retaliate for the killings of the Hamas political leader in Tehran and the top Hezbollah commander in Beirut, but nothing has happened. And it was late July when these killings happened, and so it's been a while. The next round of talks is scheduled for this Thursday. The outlook is not super clear for these. Talks have been dragging on for a while. There are still a number of issues of contention between Israel and Hamas.

It certainly doesn't help that Hamas's chief negotiator is now dead, but the U.S. and regional allies of the U.S. are really determined to keep these talks moving forward. Because without them, they really worry that this conflict could escalate and further spiral out of control. Why is Iran-tie-N-tie-gets response to ceasefire talks like this? Iran would really rather not have to retaliate if it doesn't have to, and they have an interest in sort of maintaining an image of being very strong in the region.

So if you tie this to ceasefire negotiations, potentially, that's something you could say that you got as a result of your restraint, right? It takes the pressure off a little bit. And more broadly, I think Iran would like to see a, ceasefire. And just because the longer this runs on, the more the likelihood is that this expands into a regional war. Before we go, time for our recommended read. And today's is all about labor relations at the world's biggest copper mine. A powerful workers' union behind a strike at BHP's huge Escondida mine is looking to snarl production as it pushes for a bigger share of

profits. There's a link to the story in today's pod description. For more on any of for stories featured today, check out Reuters.com or the Reuters app. We'll be back tomorrow with our daily headline show. And to never miss an episode, subscribe on your favorite podcast player.