Orange-red ground has been broken in the jungle of East Borneo, where the Indonesian government has begun construction of its new capital city.
Officials promise a “sustainable forest city” that puts the environment at the heart of development and aims to be carbon-neutral by 2045. But the project has been plagued by criticism from environmentalists and Indigenous communities, who say it degrades the environment, further shrinks the habitat of endangered animals such as orangutans and displaces Indigenous people that rely on the land for their livelihoods.

Indonesia began construction of the new capital in mid 2022, after President Joko Widodo announced that Jakarta — the congested, polluted current capital that is prone to earthquakes and rapidly sinking into the Java Sea — would be retired from capital status.

Plans for the new capital — about twice the size of New York City — are grandeur. Officials tout the creation of a futuristic green city centered on forest, parks and food production that utilizes renewable energy resources, “smart” waste management and green buildings.

“We have to think beyond what is happening today and try to tackle (things) that are futuristic,” said Bambang Susantono, chairman of Nusantara National Capital Authority, speaking about the city’s design and ability to answer future challenges.

Digital renderings shared by the government show a city surrounded by forest, with people walking on tree-lined sidewalks and buildings with plant-covered rooftops surrounded by walking paths, ponds, clean creeks and lush forest.

Building architecture is inspired by modern urban towers combined with traditional Indonesian architecture: the presidential palace in the shape of a garuda — a mythical bird and the national symbol of Indonesia — and other buildings that give a stylistic nod to traditional architecture used by Indigenous groups around the archipelago.

In its current state, the new city is far from the tidy finish presented by its planners, but there is progress. Basuki Hadimuljono, Indonesia’s minister for public works and housing, said in February that the city’s infrastructure is 14 percent completed.

Some 7,000 construction workers are clearing, plowing and building the first phases of the site. Worker dormitories, basic roads and a helipad are already being used. Construction of key buildings — such as the presidential palace — is expected to be completed by August 2024.

Sites visited by The Associated Press in early March showed mounds of freshly turned earth with excavators and cranes around them. At least one site has a sign with a QR code that visitors can scan to see 3D visuals of what the area will look like when finished; others have printed signboards showing what’s to come.

The government has said it’s working to be considerate of the environment. Signs of a more-conscious approach to construction are visible: patches of trees remain fenced-off to protect them from machinery, a plant nursery has already started for the replanting process officials promise and industrial forest surrounds the site.

But with construction set to ramp up this year, environmentalists warn building a metropolis will speed up deforestation in one of the world’s largest and oldest stretches of tropical rainforest. Forests, called the lungs of the world, suck in planet-warming carbon dioxide from the atmosphere and are home to numerous wildlife species. The island has already been compromised by palm oil plantations and coal mines.

Dwi Sawung, an infrastructure specialist at the Indonesian Forum for Living Environment, an environmental nongovernmental organization that has been monitoring the new capital project, said that the government’s plans lack consideration of the region’s unique wildlife like orangutans and sun bears. The new city cuts through an important animal corridor.

“The animals should be relocated first and then build the construction,” he said. “But since they need to hurry up, they just built the area without relocating the animals first.”

Experts have also expressed concerns about how the new capital will be powered. While the government vows the city will rely on a “smart energy” system, groups worry that some of the region’s coal-fired power plants could be used in the short term.

Indonesia has significant energy potential from solar, hydropower, geothermal, wind and other sources, but only some 12 percent of them are tapped, according to the International Renewable Energy Agency. And while user-friendly public transport might keep cars off the city’s roads, there will likely be extensive air travel between the new capital and Jakarta, about 1,300 kilometers (800 miles) away.

Indigenous groups that reside in the region and already lost parts of their land fear that urban sprawl from the new capital could make things even worse.

Officials have vowed to respect Indigenous rights and compensate those losing their homes. Local officials said they would verify all land claims and accept documents of proof of ownership, but much of the area is passed down through families without paperwork and not all tribal areas are formally recognized.

“We do not want to be relocated. We do not want they move our graves of our ancestors, or make changes or remove our historical site,” said Sibukdin, an Indigenous community leader, who like many in the country only uses one name and lives in Sepaku, a ward very close to the construction area.

Susantono said that Indigenous residents have “a couple of options for them to be included in the process” including compensation, relocation or share ownership of stores that will open.

“We are going to always persuade them and tell them about the future of the city,” he said. “Hopefully they will understand that this is for the sake of everybody.”

But as Indonesia continues to court investors, construction is moving forward, with the government planning to inaugurate the city on Aug. 17 next year to coincide with Indonesia’s Independence Day.

“Nusantara is the city for tomorrow,” said Susantono. “It will become a vibrant city, not just a government city.”
Jobless figure improves slightly, signaling labor market resilience
The Philippines' unemployment rate eased to 3.9% in May, down from 4.1% recorded in April and the same month last year.

According to the Philippine Statistics Authority, this translates to roughly 2.03 million Filipinos out of work, showing sustained recovery in the labor market amid economic challenges.

The government credits its ongoing efforts to attract investment and support key sectors for stabilizing employment levels despite global headwinds.
Move aims to strengthen maritime security cooperation in Indo-Pacific
Japan has agreed to transfer six used navy destroyers to the Philippines as part of a bilateral effort to bolster maritime defense capabilities and ensure freedom of navigation in the Indo-Pacific.

The deal follows ongoing security cooperation between the two countries, which share concerns over growing regional tensions, particularly in the contested South China Sea.

The transfer is expected to enhance the Philippine Navy's capacity for patrol and disaster response missions.
Deal marks shift in ownership of key industrial asset
Commodities giant Glencore is selling its Philippine copper smelter to the Villar family, one of the country's most prominent business dynasties.

The sale includes the PASAR facility in Leyte, which plays a crucial role in the nation's mining and refining industry.

The acquisition aligns with the Villar group's broader diversification strategy while enabling Glencore to streamline its global portfolio.

The transaction is seen as a significant development in the Philippines' resource sector.
Diplomatic tension rises after Beijing imposes travel ban on vocal critic
The Philippines has summoned China's ambassador in Manila to formally protest Beijing's imposition of sanctions against former senator Francis Tolentino.

The move follows China's decision to bar Tolentino from entering the country over his vocal criticisms of Chinese actions in the South China Sea.

Manila's Department of Foreign Affairs said the sanctions undermine diplomatic norms and threaten freedom of expression, calling for dialogue to ease escalating tensions between the two nations.
The investment bank shifts focus to South Korean and Taiwanese tech stocks as Thai brokerage warns of local economic challenges.
Global investment firm Goldman Sachs is adjusting its strategy for Asian equities, advising investors to increase their holdings in technology shares from South Korea and Taiwan, in anticipation of growth in the artificial intelligence (AI) sector.

This shift is juxtaposed with a cautionary outlook from Thai brokerage Kiatnakin Phatra Securities (KKP), which is advising a focus on diversifying investments internationally, citing headwinds in the domestic market.

At the 'FUTURE OF ASIA' seminar in May, Timothy Moe, Goldman Sachs' Chief Asia Pacific Regional Equity Strategist, discussed the current state of the global economy, which is growing but facing a slowdown.

He identified persistent risks, including fiscal uncertainties and geopolitical tensions, and encouraged investors to seek out 'idiosyncratic opportunities' that are less dependent on overall macroeconomic trends.

Moe indicated the potential for a 10% rise in oil prices—possibly driven by conflicts in the Middle East—to decrease global GDP by 0.1% and increase inflation by 0.2%.

In light of these conditions, he suggested that ASEAN-4 markets, commodity stocks, and defensive equities might perform better than the broader Asian market.

On the U.S. front, Goldman Sachs has made slight upward adjustments to its GDP forecasts and reduced the probability of a recession, attributing this positive outlook to easing tax burdens.

Furthermore, concerns about fiscal discipline remain, which could impact the dollar and bond markets.

The bank anticipates that the S&P 500 will yield approximately 4-5% over the next 12 months if a recession is avoided, setting a target of 6,500 points.

In commodity markets, gold has been recommended due to significant uncertainty, ongoing concerns regarding U.S. institutional stability, and robust buying from central banks around the world.

Within the Asian equity landscape, Goldman Sachs is prioritizing increased exposure to South Korea, Taiwan, and hardware technology sectors while advising a reduction in weightings in Singapore and Indonesia.

China and Japan continue to be favored as overweight positions.

In terms of strategic focus for the latter half of the year, Goldman Sachs emphasizes stocks that are likely to benefit from a weaker dollar, those offering high shareholder returns, firms with robust earnings quality, and those expected to see upward revisions in earnings estimates, alongside sectors such as aerospace and defense, as well as companies benefiting from supportive Chinese government policies.

Conversely, KKP Securities presents a subdued outlook for the Thai economy.

Chief Economist Dr. Pipat Luengnaruemitchai noted 'headwinds from all sides', attributing a significant slowdown in the vital tourism sector to a marked decline in Chinese visitors.

He highlighted ongoing uncertainties arising from reciprocal trade negotiations and financial deleveraging that are impacting domestic demand.

Dr. Pipat acknowledged the necessity for economic stimulus but pointed out the limitations of fiscal policy, given Thailand's high public debt levels.

Any further stimulus could require adjustments to the debt ceiling and should ideally focus on long-term infrastructure projects.

Concerning monetary policy, Dr. Pipat remarked that the low interest rates currently in place might limit the central bank's options, potentially leading to 'unconventional policies' to manage the ultra-low interest rate environment globally.

KKP forecasts Thailand's policy interest rate could decrease to 1.0%.

Ongoing political uncertainty within Thailand continues to undermine investor confidence, and the weakness of the Thai Baht reflects greater economic fragility.

Dr. Pipat emphasized the need for Thailand to expedite structural reforms in labor, education, innovation, regulation, and national competitiveness to enhance long-term growth potential.

Taweesak Paopanlop, Head of Economic and Investment Analysis at KKP Securities, indicated that global stock markets might experience short-term selling pressures due to import tariffs and protectionist policies.

However, he anticipates a strong recovery by 2026, fueled by anticipated stimulus measures in the U.S. and Europe, especially U.S. tax reductions that are projected to elevate 2026 GDP by 0.5% and earnings per share by over 5%.

KKP continues to advocate for full investment across various asset classes, aligned with individual risk appetites.

They regard the S&P 500 at 5,800 points as a compelling entry point for gradual investment, with a mid-2026 target set at 6,500 points.

The brokerage particularly favors 'quality stocks' and 'defensive stocks' distinguished by strong fundamentals, low risk, and reliable dividend payouts, to sustain portfolio stability amid market fluctuations.
Approval paves way for broader digital financial services.
Singapore-based rewards and payments platform ShopBack has secured a major payment institution license from local regulators, enabling it to expand its suite of digital financial services.

Executives say the license will support greater innovation and strengthen Singapore’s position as a regional fintech hub.
New initiatives aim to strengthen academic and cultural ties.
The United States and Singapore have announced deeper collaboration on education, unveiling new exchange programs and partnerships designed to boost academic ties and cultural understanding.

Officials say the initiative will create expanded opportunities for students, researchers, and educators in both countries.
Offering to fund growth amid booming demand for cloud infrastructure.
Singapore-based NTT DC REIT is set to raise approximately $773 million through an initial public offering, aiming to capitalize on surging demand for data center capacity.

The company plans to expand its regional footprint as cloud computing and AI workloads fuel a race for secure, efficient digital infrastructure.
High-end spending rises as city-state attracts international brands.
Singapore is defying the global luxury slump with a surge in high-end retail spending, driven by its 240,000 millionaires and a robust influx of wealthy tourists.

Industry analysts say global brands are opening more stores in the city-state, making it Southeast Asia’s most stable and lucrative destination for luxury shopping.
Nine financial institutions fined for anti-money laundering failures.
Singapore’s financial regulator has imposed penalties totaling over S$27 million on nine institutions for breaches of anti-money laundering rules linked to gambling operations.

The enforcement action underscores the Monetary Authority of Singapore’s commitment to safeguarding the integrity of the financial system.
New installation to boost adoption of electric vehicles.
Singapore plans to install its fastest electric vehicle charger by the fourth quarter of 2025, a move aimed at accelerating the country’s transition to cleaner transport.

Authorities say the high-capacity charger will significantly reduce charging times, supporting government targets for wider EV adoption in the coming years.
Health-focused initiative aims to boost access to virtual care.
Google has announced the expansion of its telemedicine advertising service to Singapore and the UK, enabling healthcare providers to better reach patients seeking virtual care.

The move aligns with rising demand for digital health solutions and represents the tech giant’s push into more localized, regulated markets.
Partnership will develop best practices for financial technology.
Singapore and the United Kingdom have formed a new alliance aimed at shaping the responsible use of artificial intelligence in the financial sector.

Officials say the collaboration will focus on developing standards, guidelines, and research to ensure AI tools are deployed safely and effectively across banking and fintech.
Award-nominated project sets benchmark for urban sustainability.
Singapore’s first net-positive energy nature park has been recognized as a finalist in the ULI Global Awards for Excellence 2024.

The innovative project, designed to generate more energy than it consumes, showcases the city-state’s commitment to sustainable urban development and serves as a model for other global cities.
Airlines struggle to manage delays amid regional storms.
Severe weather across Southeast Asia has disrupted flights, leaving thousands of travelers stranded in Singapore, China, and the UAE.

Airlines including Singapore Airlines and Air China have scrambled to accommodate passengers after unexpected storms forced widespread delays and cancellations, complicating peak travel schedules.
Ash cloud reaches 18 kilometers high, forcing widespread cancellations.
Indonesia’s Mount Lewotobi Laki Laki volcano has erupted spectacularly, sending an ash plume 18 kilometers into the sky and grounding flights across the region, including heavy disruptions for Bali-bound tourists.

Authorities have issued health warnings for ashfall, with residents wearing masks as thick grey deposits blanket nearby villages.
Nickel-rich projects drive growth despite ESG scrutiny.
Chinese mining giant Huayou Cobalt has posted record profits fueled by its nickel operations in Indonesia, underlining the Southeast Asian nation’s growing importance as a global supplier of battery metals.

The company says demand remains strong despite environmental and social governance concerns surrounding resource extraction.
Agreements cover oil, gas, and advanced mineral development.
U.S. energy giants including ExxonMobil and Chevron are expected to sign $34 billion worth of deals with Indonesia, covering oil and gas production as well as critical minerals essential for the green energy transition.

Officials describe the agreements as a landmark boost for bilateral economic ties and energy security cooperation.
Move seen as bargaining chip in tariff negotiations.
In an apparent concession aimed at reducing trade tensions, Indonesia has pledged to buy more American wheat as it negotiates with Washington to avoid the full impact of a 32% tariff on its exports.

Officials hope the expanded agricultural imports will help secure a more balanced and mutually beneficial trade arrangement.
New trade measure raises stakes in U.S.-Indonesia economic relations.
Former President Donald Trump has confirmed the imposition of a 32% tariff on all Indonesian exports to the United States, warning Jakarta against retaliation.

The measure forms part of a broader set of trade restrictions targeting multiple countries, sparking concerns over rising costs for key Indonesian industries such as palm oil and electronics.
Agreement aims to stabilize supply as regional shipments decline.
Indonesia and Vietnam have announced a new rice trade agreement designed to secure reliable supplies as exports from the region face sharp declines.

Officials say the pact will help maintain price stability and food security for both countries, while reinforcing trade ties amid broader geopolitical and climate-related challenges.
Travelers stranded as ash cloud threatens aviation safety.
Flights to and from Bali and other Indonesian destinations have been canceled following the violent eruption of Mount Lewotobi Laki Laki, which sent ash clouds soaring into commercial air corridors.

Airlines across Australia and Southeast Asia have grounded routes, stranding hundreds of travelers and forcing carriers to coordinate last-minute contingency plans.
Authorities on alert for further eruptions from Mount Lewotobi.
Indonesian emergency teams have begun evacuating villages threatened by lava flows and heavy ashfall from Mount Lewotobi Laki Laki’s latest eruption.

Officials warn that conditions remain unstable, with volcanic tremors continuing to rattle the region, as authorities prioritize resident safety and the delivery of emergency aid supplies.
Jakarta scrambles to defuse economic tensions before new levy deadline.
Indonesia is sending its top trade negotiator to Washington in an urgent bid to avoid the looming 32% U.S. tariff on its exports.

Officials say they hope to present new concessions, including increased American agricultural imports, to secure a more favorable outcome and protect Indonesia’s crucial manufacturing and commodities sectors.
Residents don masks as air quality plummets near eruption zone.
Thick volcanic ash from Indonesia’s Mount Lewotobi eruption has blanketed surrounding villages, forcing thousands of residents to wear masks and shelter indoors.

Authorities have issued urgent health advisories warning of respiratory risks, while emergency teams monitor conditions for potential evacuations if volcanic activity continues.
Move aims to defuse trade tensions and avoid steep American levies.
Thailand has formally submitted a new trade proposal to the United States that offers zero tariffs on a wide range of American goods in exchange for reduced tariffs on Thai exports.

The government hopes the offer will avert the impending 36% levy, preserve critical trade flows, and stabilize the country’s export-dependent economy.
Trade escalation raises fears of severe impact on key industries.
Former President Donald Trump has announced a sweeping 36% tariff on all Thai exports to the United States, warning Thailand against retaliatory measures.

The move is part of a broader strategy targeting multiple trading partners and is expected to hit Thailand’s electronics, automotive, and food industries particularly hard.
Government scrambles to finalize concessions as clock ticks.
Thailand’s finance minister says he remains confident that ongoing negotiations will succeed in reducing the newly announced 36% U.S. tariff before the August 1 deadline.

The government has offered trade concessions and is engaging in intensive diplomacy to preserve vital export markets and avoid disruptions to economic growth.
Government offers new concessions in effort to lower tariff threat.
Thailand has submitted a new trade proposal to the United States offering zero tariffs on many American goods in a bid to avoid the newly announced 36% tariff on its exports.

Officials say they remain hopeful that concessions will lead to a reduced tariff rate before the U.S. deadline, aiming to protect jobs and critical supply chains.
Washington weighs curbs over fears of Chinese technology transfers.
The United States is reportedly preparing to restrict exports of advanced AI chips to Thailand and Malaysia in a move designed to curb China's access to critical technologies.

Industry analysts warn the proposed measures could hamper Thailand's efforts to build its semiconductor sector and reduce reliance on foreign supply chains.
Military partnership highlights shared security commitments in the Indo-Pacific.
The United States and Thailand have begun the 2025 iteration of the Cooperation Afloat Readiness and Training, or CARAT, exercises aimed at enhancing maritime security, interoperability, and regional stability.

The joint drills underscore the longstanding defense partnership between the two countries amid evolving security challenges in the Indo-Pacific.
SVOLT factory celebrates landmark achievement amid growing demand.
Chinese battery maker SVOLT has celebrated the production of its 10,000th electric vehicle battery pack at its factory in Thailand, underscoring the country’s emergence as a regional EV manufacturing hub.

Officials say the milestone reflects surging demand and Thailand’s strategy to position itself at the forefront of clean automotive technology.
Authorities warn of flooding and travel disruptions.
Thailand’s meteorological department has issued warnings of heavy rainfall as tropical storm Danas intensifies the annual monsoon.

Officials advise residents to brace for potential flooding and landslides, with emergency services on alert and travel disruptions expected across affected regions.
Officials aim to protect industry and employment from U.S. levy.
In a bid to avoid the full brunt of a 36% tariff on exports to the United States, Thailand has offered further trade concessions aimed at satisfying American demands for improved market access.

Government officials stress the need to safeguard critical industries and jobs that rely on robust trade ties with Washington.
New laws aim to stem inflows of foreign trash and boost sustainability.
Malaysia has passed tougher laws to curb the import of plastic waste, drawing praise from environmental groups that say the country has long been a dumping ground for foreign trash.

Officials argue the stricter regulations will reduce pollution, support recycling industries, and promote a more sustainable waste management system.
First Asia trip for new Secretary of State comes as trade conflict heats up.
U.S. Secretary of State Marco Rubio is traveling to Malaysia for ASEAN meetings this week, marking his first official visit to Asia.

The trip comes as new American tariffs on Malaysian exports fuel diplomatic tensions, with both sides expected to address trade frictions and regional security challenges during high-level talks.
Trade ministry says it remains committed to a fair deal with Washington.
Malaysia’s trade ministry has pledged to continue engagement with the United States despite the announcement of 25% tariffs on Malaysian goods.

Officials say they remain committed to finding a balanced solution that preserves vital trade flows while addressing American concerns over market access and supply chain security.
Airline group commits to major fleet expansion despite tariff headwinds.
Malaysia Aviation Group has confirmed a major order for 20 additional Airbus A330neo jets, signaling long-term confidence in aviation growth despite looming trade tensions.

The move reflects the airline’s strategy to modernize its fleet, expand regional routes, and compete more effectively in Asia’s fast-recovering travel market.
Economists see potential cut as trade tensions cloud growth outlook.
Malaysia’s central bank is weighing its first interest rate cut in five years as economists warn that new U.S. tariffs could dampen exports and slow growth.

Analysts say policymakers face a delicate balancing act to support domestic demand while guarding against inflation risks and financial market volatility.
Strong second-quarter growth highlights country’s tech ambitions.
Malaysia’s digital sector attracted more than $6.19 billion in new investment in the second quarter of 2025, a 125% increase from the previous quarter.

Officials say the surge underscores the country’s ambitions to position itself as a Southeast Asian technology hub while diversifying its economy and creating high-skilled jobs.
Officials aim to prevent damage to trade ties after sudden tariff announcement.
Malaysia’s government has requested urgent trade talks with the United States after Washington announced a 25% tariff on Malaysian goods.

Trade officials say they are committed to a fair, balanced deal and hope to avert lasting damage to economic ties that support billions in annual commerce between the two countries.
Report says U.S. weighing new limits on sales to Malaysia and Thailand.
Reports indicate the United States is preparing to restrict exports of advanced AI chips to Malaysia and Thailand as part of broader efforts to curb China’s tech ambitions.

Industry leaders warn the move could hurt Malaysia’s growing semiconductor sector, which plays a critical role in global electronics supply chains.
Trade move targets 14 countries, intensifying global economic tensions.
Former President Donald Trump has imposed new 25% tariffs on all Malaysian exports to the United States as part of a sweeping trade crackdown affecting 14 countries.

The administration argues the move will protect American industry, but critics warn it risks inflaming diplomatic relations and disrupting global supply chains.
New trade measures target 14 countries with steep penalties on select imports.
Former President Donald Trump has announced sweeping new tariffs, including a 40% duty on imports from Myanmar and Laos, as part of a broader plan hitting 14 countries with punitive rates.

The move is intended to counter what Trump describes as unfair trade practices, but critics warn it could strain diplomatic ties and raise consumer prices.
Move seen as response to international criticism over recruitment practices.
Myanmar’s military junta has released 93 child soldiers following sustained international pressure and condemnation from the United Nations.

Human rights groups have welcomed the move but continue to call for stronger protections and accountability to end the long-standing practice of recruiting minors into armed conflict.
Refugees cross into India’s northeast amid clashes between junta and ethnic forces.
Intensifying clashes in Myanmar’s Chin State have forced thousands of civilians to flee across the border into India’s northeast, straining resources in border states like Mizoram.

Officials report ongoing efforts to shelter and support the displaced as humanitarian agencies warn of growing needs amid continued violence.
Disaster survivors still struggle with damaged infrastructure and aid gaps.
One hundred days after a powerful earthquake struck Myanmar, thousands of survivors remain in precarious conditions with limited access to adequate housing, healthcare, and clean water.

Aid organizations report that rebuilding efforts have been hampered by funding shortfalls and ongoing political instability, leaving many communities vulnerable.
Fighting in Kachin state threatens critical mining operations vital to global tech supply chains.
Escalating clashes between Myanmar’s military and Kachin Independence Army rebels threaten China’s crucial supply of heavy rare earths, raising alarm in global technology markets.

The conflict has disrupted mining operations in northern Myanmar, forcing Chinese buyers to weigh alternative sourcing as geopolitical risks mount.
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