{"id":61916,"date":"2026-05-14T00:38:19","date_gmt":"2026-05-14T04:38:19","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/xi-warns-of-taiwan-conflict-risk-as-boj-signals-further-rate-hikes\/61916\/"},"modified":"2026-05-14T00:38:19","modified_gmt":"2026-05-14T04:38:19","slug":"xi-warns-of-taiwan-conflict-risk-as-boj-signals-further-rate-hikes","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/xi-warns-of-taiwan-conflict-risk-as-boj-signals-further-rate-hikes\/61916\/","title":{"rendered":"Xi Warns of Taiwan Conflict Risk as BOJ Signals Further Rate Hikes"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Chinese President Xi Jinping warned that the Taiwan issue remains the most critical flashpoint in US\u2013China relations, stating that mismanagement could lead to direct conflict between the two nations.<\/strong><\/li>\n<li><strong>Bank of Japan (BOJ) board member Masu signaled a hawkish shift, advocating for interest rates to move further into the &quot;neutral interest rate band&quot; to combat persistent inflation.<\/strong><\/li>\n<li><strong>The yield on the 10-year Japanese government bond (JGB) climbed 3.5 basis points to 2.620% following the BOJ\u2019s aggressive commentary on negative real interest rates.<\/strong><\/li>\n<li><strong>Nvidia (<a href=\"\/stock\/NVDA\">NVDA<\/a>) CEO Jensen Huang, speaking from Beijing, expressed hope for strengthened ties between the US and China, emphasizing the importance of the leaders&#39; positive relationship.<\/strong><\/li>\n<li><strong>Samsung Electronics (<a href=\"\/stock\/SSNLF\">SSNLF<\/a>) faced renewed labor friction as union officials refused further wage talks until the company formalizes and discloses its bonus scheme.<\/strong><\/li>\n<\/ul>\n<h2>Geopolitical Tensions and US-China Relations<\/h2>\n<p><strong>President Xi Jinping<\/strong> emphasized that the <strong>Taiwan issue<\/strong> is the most significant matter in US\u2013China ties, according to reports from <em>Xinhua<\/em>. Speaking to <strong>President Trump<\/strong>, Xi cited the <strong>&quot;Thucydides trap,&quot;<\/strong> warning that the two superpowers are responsible for managing ties to avoid inevitable conflict. He noted that if the Taiwan situation is not handled with care, the relationship could become &quot;dangerous.&quot;<\/p>\n<p>In response, a <strong>Taiwan government spokesperson<\/strong> thanked the <strong>United States<\/strong> for its &quot;long-standing support at all levels.&quot; The spokesperson added that Washington has repeatedly confirmed its &quot;firm and clear support&quot; for the island, despite the escalating rhetoric from Beijing.<\/p>\n<p>Amidst these tensions, <strong>Nvidia (<a href=\"\/stock\/NVDA\">NVDA<\/a>)<\/strong> CEO <strong>Jensen Huang<\/strong> was reported to be in Beijing. Huang expressed optimism that both leaders would strengthen bilateral ties, highlighting the global importance of stability between the two largest economies.<\/p>\n<h2>BOJ Signals End to Deflationary Era<\/h2>\n<p><strong>Bank of Japan (BOJ)<\/strong> board member <strong>Masu<\/strong> delivered a series of hawkish remarks, stating that Japan is no longer in a state of deflation. He argued that <strong>negative real interest rates<\/strong> should be addressed promptly and that policy rates should be increased further toward a neutral level.<\/p>\n<p>Masu warned that <strong>yen depreciation<\/strong>, rising labor costs, and high food prices are forming a new basis for inflation. He specifically noted that an <strong>energy shock<\/strong> triggered by the ongoing <strong>Iran conflict<\/strong> could have economic consequences worse than the <strong>1973 oil crisis<\/strong>, posing severe risks to both growth and price stability.<\/p>\n<p>Market reaction was immediate, with the <strong>10-year Japanese government bond yield<\/strong> rising to <strong>2.620%<\/strong>. Masu indicated that once rates reach the estimated neutral level, further hikes will be data-dependent, focusing on inflation, employment, and broader financial conditions.<\/p>\n<h2>Corporate and Market Developments<\/h2>\n<p><strong>Samsung Electronics (<a href=\"\/stock\/SSNLF\">SSNLF<\/a>)<\/strong> is attempting to reopen wage discussions with its union, but progress has stalled. Union officials stated there is &quot;no basis&quot; for further talks until the company provides full transparency regarding its <strong>bonus scheme<\/strong>. This labor uncertainty comes as the tech giant navigates a complex global semiconductor market.<\/p>\n<p>In equity research, <strong>Aramark (<a href=\"\/stock\/ARMK\">ARMK<\/a>)<\/strong> saw its target price raised by <strong>RBC<\/strong> from <strong>$47 to $55<\/strong>. Conversely, <strong>Piper Sandler<\/strong> reduced its price target for <strong>Amgen Inc (<a href=\"\/stock\/AMGN\">AMGN<\/a>)<\/strong> to <strong>$427<\/strong> from <strong>$432<\/strong>, reflecting a slightly more cautious outlook on the biotech firm.<\/p>\n<p>In the financial sector, <strong>Bank of England (BOE)<\/strong> Deputy Governor <strong>Sarah Breeden<\/strong> reportedly told the <em>Financial Times<\/em> that early <strong>stablecoin proposals<\/strong> may have been &quot;too cautious.&quot; The central bank is now actively exploring alternative options for digital asset regulation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Chinese President Xi Jinping warned that the Taiwan issue remains the most critical flashpoint in US\u2013China relations, stating 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