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The Globalist
Iran threatens retaliation for any US strikes as American troops are evacuated from Middle East bases
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UBS Narrator
Craft matters in small ways like how a coffee is brewed, and in not so small ways like how your money is cared for. Which is why for 160 years, UBS has elevated banking to a craft, tailoring unique strategies that combine human expertise with the latest technologies, all happening across 24 time zones and and 12 key financial hubs. With you at the heart of it all, UBS advice is our craft.
- [00:38]
Emma Nelson
You're listening to the Globalist, first broadcast on 15 January 2026 on Monocor Radio. The Globalist in association with U. Live from London. This is THE Globalist with me, Emma Nelson. A very warm welcome to today's program.
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Inzaman Rashid
Coming up, we have been informed by very important sources on the other side and they've said the killing has stopped and the executions won't take place.
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Emma Nelson
President Trump had threatened strong action should Iran begin carrying out executions. But following assurances from Tehran, are things calming down? We'll bring you the latest. Also ahead in the next 60 minutes.
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Inzaman Rashid
The discussions focus on how to ensure.
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Adrienne Klaser
The long term security in Greenland.
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Inzaman Rashid
And here. Our perspectives continue to differ, I must say.
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Emma Nelson
After talks at the White House, Denmark's foreign minister outlines the still fundamental problem between his country and the US America still wants Greenland. We'll head to Paris as our design editor, Nick Moniz brings us the latest from Maison Objet, plus the headlines from France and a roundup of news from the world of luxury. That's all coming up on the Globe. Live from London. First, a quick look at what else is happening in today's news. President Zelensky says he'll declare a state of emergency in Ukraine's energy sector after relentless Russian air attacks on infrastructure. Venezuela's journalist union says 18 journalists and media workers have been freed in the latest release of political detainees. And Rome is the latest European city to sharply reduce its speed limit as officials try to cut pollution and improve road safety. Stay tuned to Monocle Radio throughout the day for more on these stories. But first, how close are we to military action by the US Against Iran? Last night we began to see the sorts of preparations that could lead us to that conclusion. The American Embassy in Saudi Arabia was warning diplomats and civilians to take precautions. US Military bases across the Gulf were being evacuated. Now the warnings are almost identical to Those issued on June 22 last year, just ahead of the major American strike on Iran. But what is happening now? Tell us more about where we're up to now. I'm joined now by Inzaman Rashid. He's in Dubai. Monocle's Gulf correspondent, a Very good morning to you, Insy.
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Nick Moniz
Good morning, Emma.
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Emma Nelson
So where are we now? Because about what, nine, ten hours ago we were looking at possible, if not imminent military action, but now there seems to be a slight dialing down.
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Inzaman Rashid
Yeah, it's been a pretty tense 24 hours, I'd say, out here in the Middle East. We started off yesterday, as you mentioned, by US And UK Personnel being told to evacuate from some key military bases across the Middle east, including the Al database in, in Doha. That was the site that was attacked by Iran last year. And since then, a number of high profile personnel had left that signaled that a US Strike on Iran was coming. And there was some speculation late last night that potentially after midnight Donald Trump could order strikes into Iran. But overnight, as you mentioned, Donald Trump has spoken and he said that he's holding off striking Iran for now after he received reassurances from the other side that Tehran will stop killing protesters. Human rights agents agencies have put the death toll at around 3,000. Now those numbers have been contested vastly by the Iranian regime, but it's, it's my understanding that those protests have died down and strikes, well, imminent strikes by the United States are probably not going ahead right now. But analysts that I've been speaking to this morning here in the UA and other Gulf countries, they still believe that a US Strike is highly likely. They're just unsure as to when that might happen and what the reasoning that Donald Trump could give for those strikes. I think what will be interesting as well is that if an attack does happen from the US Into Iran, what specifically Iran's retaliation could be?
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Emma Nelson
Indeed. And do we know a firstly, what nature the strike could take or indeed where the United States could be targeting. And secondly, when you mentioned retaliation, where would Iran go?
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Inzaman Rashid
Yeah, it will be interesting to see exactly where the US Targets. Saudi Arabia on one hand are calling for restraint and they are saying that they do not want any civilian deaths as a result of a U.S. airstrike. But of course, it's difficult to say that when Iran themselves, themselves are killing everyday Iranian people who are on the streets and have been protesting since around the 28th of December. And you've got to remember, Emma, what we're seeing in Iran right now is probably the biggest popular uprising against the Islamic Republic since it kicked off back in 1979 and there was a revolution. The protests this time are a lot more intense and they're happening because of this sudden collapse of the country's currency. And we're even seeing traders from the Grand Bazaar winning against the Islamic Republic. So where the US May attack is a huge question, and when is also the bigger question. It does seem right now that Donald Trump has dialed down his rhetoric and may wait a few days to see what actually comes out of Tehran. But on your note of what Iran could do as a response, I think this is really interesting because we saw last year, in order to de escalate the issues of June last year and that 12 day war, there was an attack on the Qatari, the US Military air base in Qatar, in Doha, Al Uday Air base. And that did essentially create de escalation. Now, speaking to some people and analysts here in the Gulf, they suggest that that will be the least likely option. It'll be the best case scenario, but it will be the least likely option that Iran would attack that airbase. Again, the likely option is that they could attack the UAE and Kuwait. They feel that that would create a pretty, a pretty stark message to the US A pretty forceful message as well. So an air base in the UAE or a US Military base in the UAE and Kuwait could be a potential target. The worst case scenario for Iran would be to attack Bahrain. Bahrain's Bahrain, where the air bases for the US In Bahrain is pretty close to tourism areas to civilians. And if there was an Iranian response and an attack on the US Military base in Bahrain, you most probably will get civilian casualties. And that for all sides would just not be a good move. So there would be options for Iran, but they will obviously have to see the level of what a US Attack would be in their own country.
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Emma Nelson
As it stands at the moment, we have this quite extraordinary state of affairs though insi that Donald Trump appears to have decided against military strikes against Iran because Iran has promised that it is no longer killing its protesters. Trump has given an exclusive interview to Reuters and he has said openly there's a chance that Iran's clerical government could collapse. Does this signify for the first time in a very, very long time that Iran does not have that tone of defiance that it is actually feeling as if could dial down? And the talk of attacks on the UAE and Kuwait and Bahrain are simply speculation that the, that the Iranian regime realizes that, that Trump has the upper hand here?
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Inzaman Rashid
I think it's pretty much all speculation at the minute and most probably a lot of that speculation comes from Donald Trump himself. I think what Iran will be thinking and the advice that they are probably seeking is, is stop the killing of, of Iranian protesters, of everyday Iranians who are just angry because of the economic situation in Iran. I think they know that if that happens and if they dial down their rhetoric of, of saying they're going to execute people and they're going to imprison people who prot to kill essentially innocent people on the streets of Tehran, they know then the US Will quieten down and there won't be a response that Donald Trump initially wanted to do. I think they will not want to be seen giving Donald Trump any upper hand. They will not want him to be seen as if he is in control. And again, it's a war of words for both sides, which he's seen for such a long time now. I think what will be interesting is to see where Donald Trump goes with actually extending an invitation to the Iranian regime to actually sit at a table and to have discussions. I believe, and some of the analysts, particularly in Iran and around the region, believe that that could be something that's not far off an actual conversation between the Iranian regime and Donald Trump. And if that happens, well, it will just a pretty remarkable step in his presidency in what has been a pretty.
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Emma Nelson
Busy first year in Zaman, Rashid Monocle's golf correspondent in Dubai. Thank you so much for joining us on the Globalist. It's what, 7:12am here in London, 5:12am in Nuuk now, the foreign ministers of Denmark and Greenland say there is still a fundamental disagreement with the United States over Greenland. After high level talks in Washington, which they described as frank but constructive, the Danish foreign minister, Lars Rasmussen, said it was absolutely not necessary for the U.S. to seize Greenland. The United States has different thoughts. To tell us more, I'm joined down the line by Inga Thordar, chief external relations officer at the Oceanborn foundation and former senior editor at BBC and cnn. Thank you so much. Inga, good morning to you.
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Inga Thordar
Good morning.
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Emma Nelson
So we had Mr. Rasmussen saying the discussions focus on how to ensure the long term security in Greenland. And here our perspectives continue to differ. What a diplomatic comment.
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Inga Thordar
It certainly was. And I mean, as with, you know, always with these meetings, a lot comes out afterwards. So even if we don't know exactly what was discussed in the meeting itself, you know, there was a lot of information that came afterwards. And I think, you know, because security has been the main line from the transition Trump administration. If you put it in the context of, for example, what the foreign Minister Loki said afterwards, that the US has not asked for increased military presence in Greenland for the last 20 years. Actually the US has pulled out of the Arctic since the early 2000s. So the scope to increase their presence in the region is quite Large because none of the agreements that were made were in the 1950s. I think the 1951 agreement is still in intact. So this sort of conversations about security can easily be had with those allies that have been allies to the US For a very long time in the Arctic region.
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Emma Nelson
Tell us a little bit more about what these specific security requests and requirements are by the United States.
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Inga Thordar
Nothing has really come out about what that is. But they keep talking about the threat from China and Russia. Now the Danish have said, the Danish government has said that there are absolutely no Chinese ships outside Greenland or around Greenland shores and no Chinese investment has been made in Greenland. So you know, as with sometimes with what Trump says, we're not sure where this information is coming from and whether or not how big a threat China and Russia are at the present moment that can't be solved through diplomatic channels and increased presence, military presence by NATO allies. And actually we NATO allies have already said that they will do so. And France, for example, is sending troops. Britain is sending a delegation there in the Nordic countries, the ones that do have an army have also said that they will assist. So if the question here is about security and shoring up defenses, then diplomatic way should be a way to do that, not annexation or buying a whole country.
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Emma Nelson
And the interesting thing is that because the focus so much from the United States part is on, on so called security, the response as you have just been outlining from Europe is similar on that base. I mean, just looking at what's happened in the last 24 hours, troops from Sweden, Norway and what they're saying, several allied countries are there, as you say, 13 troops are arriving today to explore the framework for potential military contributions. That's a quote from Germany. Paris is also saying it's contributing. What this seems to have done is actually prompted Europe to sort of galvanize in a way that we haven't seen for quite a while.
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Inga Thordar
I think that's true. And that has been the, I mean, we can watch what Europe has done recently around Trump's comments. It's reactionary and maybe this is a wake up call for Europe and for NATO as well. I mean, listening to the foreign ministers of the Arctic countries and I can name Iceland here as one of them. You know, there's a feeling that the Arctic has been a little bit ignored by the alliance. I mean, the US pulls out of Iceland in 2006, they've kept the same military presence, as I said, in Greenland for a very long time time. And NATO has not been increasing or shoring up any defenses in that region. And we're also seeing, for example, in Norway now starting to increase presence in outlying islands like Jan Mayen, which sits sort of halfway between or in that sort of triangle between Greenland, Iceland and Norway. They're also wanting to increase that in Svalbard to protect those regions. So, you know, there is also a feeling that this could also be a way to. Jacob. Call that the Arctic region has been ignored for a while and it's time to kind of shore up defences there.
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Emma Nelson
And the defences that are being deployed are on a very, very low scale. It's being described as a sort of a symbolic gesture by all these countries. But what can the United States do next? I mean, is there an absolutely clear chance that the US could mount military action to seize Greenland? If so, what would happen?
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Inga Thordar
Well, I mean, it would be the first time since NATO was founded that a NATO country attacks another NATO, which is what will be happening, because Greenland, being an autonomous country, is still under the protection of the Kingdom of Denmark, which is a NATO member. So I think that we would be fundamentally shifting world order as we know it right now. Can the US military invade Greenland? Well, I mean, the might of the US army is quite considerable, so I'm sure they could. Now, what the response could be from others is very, very difficult to gauge. And. And I think everyone, not least the Greenlanders, are sincerely hoping that that will not be the case. I mean, listening to. I mean, you could see the pictures from Greenland yesterday. I mean, they were glued to the television and radio to kind of watch what was happening and getting the news as they came in. And they've made it very clear that they don't want to be part of the us. And, I mean, a country that was actually looking for independence from Denmark as well, is now rallying behind being part of Denmark, really, with about 80 of the country saying that they would want to stay within the Danish sort of protection. And, I mean, I think that's sort of also them looking forward towards Europe and NATO as well. So. And I mean, and the kind of rhetoric or the jokes in a way, that are coming out of the US around, you know, dogs sledging being the defenses. Of course, that is not correct. Similarly, the incoming ambassador to Iceland saying that Iceland will be the 52nd state of the US, assuming that Greenland would be the 51st. I mean, I don't think that any of these comments are going down very well in that region.
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Emma Nelson
Inga Thord, our chief external relations officer at the Ocean Born foundation, former senior editor at the BBC and CNN thank you so much for joining us on Monocle Radio.
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Adrienne Klaser
Still to come, a lot of people are turning towards local luxury brands who are interpreting what luxury can be in a different kind of way.
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Emma Nelson
The Financial Times, Adrienne Klaser talks to us about luxury in Paris in 2026. Stay with us. This.
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UBS Narrator
Craft is a matter of perspective, a unique outlook and obsessive attention to detail. With UBS's Chief Investment Office Houseview, we're focused on identifying the latest investment opportunities and market risks to help you achieve your financial goals so you get the big picture broken down into thought provoking insights. Deliver Day daily and curated by over 200 globally connected, locally active analysts. UBS Banking is our craft.
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Emma Nelson
Let's continue now with today's newspapers. Joining me is Julia Jenn, Monocle's writer and researcher. Good morning, Julia. Good morning. How are things?
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Julia Jenn
Pretty good, pretty dark here in London.
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Inga Thordar
Excellent.
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Emma Nelson
Right, let's have a look at what's happening in the newspapers. You want to start with, with Bloomberg?
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Julia Jenn
Yes. In Bloomberg we have this exclusive and it's about Russia's allies complaining that Putin is nowhere to be seen when it matters most. So we're talking about here Venezuela, of course, we have the Syrian dictator Bashar al Assad, Iran, Cuba, sort of where things are kind of blowing up in the world. And Russia is, you know, its supposed military might that's supposed to sort of shore up these regimes is kind of missing in action. So we can see this now in Iran with the threats against the regime, especially, you know, touted by Donald Trump, the US President. And of course, we just saw this in Venezuela. And one of the sort of details that's cited in this report from Bloomberg is the failings of Russian air defense systems. We've seen this in, you know, drone attacks on Russia itself, Russia proper. But the fact that these failings were so publicly broadcast in the US Raid on Venezuela where they managed to capture Maduro is quite embarrassing for Russia. And I think the ramifications for other Russian allies are quite damning here. The article doesn't mention this, but we're talking about, you know, North Korea, Azerbaijan, Armenia. Of course, when we saw the conflict between Armenia and Azerbaijan blow up last year, we saw that, you know, Russia again was missing in action there. And of course we know that this is and the article talks about, you know, this is because they're tied up in Ukraine. But it's interesting, I think the article sort of makes a kind of argument that potentially this is also because they see the US As a more important ally now and don't want to act.
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Emma Nelson
Anger the US either that or the. Or Russia recognizes that getting involved at the moment in anything other than Ukraine is probably too much of a risk. I mean, the interesting thing about this article in Bloomberg is it sort of guides us to look at two fates, two areas of perceived failure with Russia. First and foremost is the practical help. The practical help is just not there. As you mentioned, you know, the technical help, the military backup has not worked. But secondly, the voice from Moscow is reasonably silent. Fair enough, Bashar Al Assad was offered safe harbor by Putin. But apart from that, and this is what Bloomberg talks about, the sort of the symbolism of seeing Nicolas Maduro languishing in a New York jail is a powerful one when it comes to the idea of how Russia symbolically stands with its allies.
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Julia Jenn
Yeah, absolutely. If we look at sort of the global major players and how their soft power and hard power is shifting around the world, it's actually interesting because, because many would say that 2025 was an absolute victory for Russia in terms of soft power, hard power in terms of its propaganda machines at work in other countries, especially on the African continent, how it managed to restore US ties so sort of victoriously, but traditional allies really being left behind. And there's this feeling, I think in this article that's being expressed is that Russia is very much playing their own game here. There's a sort of fight for survival, a fight for kind of a place in this new world order with the US and China as. And Russia is very much, you know, saving its own skin, looking out for itself and only itself.
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Emma Nelson
Let's move on to an article which you see, which you're bringing to us from the Ukrainian Pravda, but also from the Guardian here in the uk, Yulia Timoshenko, the former Prime Minister of Ukraine, she is a figure from the pre conflict days, isn't she? When you first start to think about Ukraine and its politics, she, I think it's 2004, wasn't it? She was part of the Orange uprising and she was also jailed in what, 2011. She was a symbol of hope from within Ukraine. And yet these articles suggest that, dare I say it, it is the fate that befalls many politicians. She's now accused of corruption.
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Julia Jenn
Yeah, absolutely. She's a totally legendary figure, you know, firebrand from Ukrainian politics. If people think of, you know, this woman from Ukrainian politics, it's, I think it's the crown on her head, it's the plats over her head, the double plats. And I actually As a child, in the Orange Revolution, when, when the Orange Revolution was happening, my mu. To plait my hair like that, you know, she was an absolute symbol of hope, as you said. But her fall has been bitter and there is no love lost in this article from the Ukrainian Times, which has been Ukrainian Pravda, which has been very supportive of Timoshenko in the past. Actually the founder of this newspaper was. She vigorously defended his memory when he was assassinated by the Ukrainian. Well, anyway, but he was assassinated in a politically motivated murder back in the early 2000s. So what's happening here is we have this anti corruption agency in Ukraine that has been carrying out so many searches and was responsible for the downfall of Yermak, who was a very controversial presidential adviser last year. And in true Nabu, and that's the name of the anti corruption agency, in true Nabu, dramatic fashion, they have in this article collaborated with Ukraine Pravda in this article to publish kind of recordings and little quotes from what Timoshenko was caught on tape talking about. And basically what she was doing was publishing quotes. Sorry, she was buying votes from MPs in the Ukrainian parliament. What the article sort of brings into question though, and this is really the punchline at the end is about how this majority, this vast majority in the Ukrainian parliament that was traditionally seen, you know, in these war. War era, in this war era now in Ukraine, where, you know, there can't be parliamentary elections, that's not possible under martial law under the current situation. But this majority is trying to be influenced and it's kind of affecting very important votes. So for example, the vote for who will become the energy minister yesterday in Ukrainian parliament, that vote couldn't be passed by Zelenskyy. And so there's this sort of accusation that potentially different political figures within parliament are trying to. And here of course, we saw Timoshenko using actual corruption hard cash and we see her pictured with this hard cash in the. But people are really leaning on their MP colleagues to really bring about some votes, or not bring about votes in parliament.
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Emma Nelson
What does this do for the wider perception of Ukraine, given the fact that it needs help from everybody, from all sides, perpetually, continually and unceasingly as it looks. Yet when you see these absolute poster childs of revolution and uprising in the striving for democracy, falling foul, being perceived as falling foul of the age old problem of corruption, this doesn't do you. This doesn't do Ukraine any good, does it?
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Julia Jenn
Well, I think the Mushlenko is a very specific case. She's always been mired in controversy and actually her sort of downfall really began after this 2009 gas disputes that happened with Russia where Russia actually stopped all gas supplies on 1 January 2009. And she managed to bring it back, but she brought back this gas and she was called the gas Princess. So that really doesn't bode well for her sort of image. And she brought it back in a very controversial agreement that really embittered many Ukrainians towards her. So she's a totally controversial figure. And I think if, you know, listeners are to take away anything from this is the sort of absolute dramatic fashion in which this anti corruption agency brings political figures accused of corruption to heel. You know, they conducted a pre dawn raid. There were these very dramatic images of them pulling up outside her office sort of filing in. The police were called by Timoshankos team but the police could do nothing because there was absolutely, you know, she was handed a formal notice. There was hard evidence that she was pictured with for this scandal.
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Emma Nelson
Finally, excuse me, let's head to Wales where there is a very posh restaurant where if you had a tasting menu, I'm not even going to attempt the name. There's quite a lot of wise and my Welsh isn't what it could be. If you want dinner at this place, it's £468. It is phenomenally wonderful. There's a 30 course tasting menu. It is what, the only, only Michelin starred. Well, the only two Michelin starred restaurant in Wales. Amazing. It's filthy. Apparently, say the inspectors, the kitchen is in need of major improvement and yet the head chef says it's not his fault.
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Julia Jenn
I think it's fantastic. So they've received a one star hygiene review from the Food Standards Agency. But this restaurant in the article it talks about, you know, was named one of the best, in fact the best in the UK in 2022 and 2023. So the chef, Gareth Ward has really, you know, pulled a punch with these food food sort of hygiene inspectors. And at the center of this dispute is his sashimi grade raw fish and his wagyu beef. So he has which ages for 300 days.
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Emma Nelson
I mean that's longer than some marriages.
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Julia Jenn
Absolutely. In a special specially built sultan salt chamber where he's aging it. But I think, I mean I'm fascinated. I would love to go to this restaurant, I'd love to try it, I'd love to see how it all works. And in the article, you know, they explicitly say you can walk into the kitchen, you can see what's going on there, so can't be that bad, kind of.
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Emma Nelson
Well, I don't mind as long as he washes his hands and the surfaces. Julia Ginn, Monocle's writer and researcher, thank you so much. We're off to Wales for an expensive, strange meal. Thank you so much for joining us on THE globalist. A quick look now at some of the other stories we're keeping an eye on today. President Zelensky says he'll declare a state of emergency in Ukraine's energy sector after relentless Russian air attacks on infrastructure exacerbated by an exceptionally cold winter. A special coordination headquarters will be set up with a focus on boosting electricity imports. Venezuela's journalist union says 18 journalists and media workers have been freed in the latest release of political detainees. The interim president, dely Rodriguez, says 406 political detainees have been freed since December. December. And Rome is the latest European city to sharply reduce its speed limits as officials seek to cut pollution and improve road safety. Drivers in large parts of the Italian capital will be restricted to 30 kilometers an hour. This is the Globalist. Stay tuned. 16:30 in Tokyo, 8:30am in Zurich. Now, Japan's stock market hit a record high yesterday amid reports that the prime minister plans to call a general election. Stocks are rising, but the yen is weakening and government bond yields are climbing, putting renewed focus on the broader impact on Japan's economy. While Jesper Cole is economist and expert director at Monex Group in Tokyo. Good afternoon, Jesper.
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Inzaman Rashid
Good afternoon.
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Emma Nelson
So explain to us a little bit more about why we believe that Prime Minister Takechi is going to dissolve the lower house, the Diet, and call a general election. Is it as simple as the fact that her popularity ratings are, what, up in the 70 percentages?
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Inzaman Rashid
She's riding very, very high in terms of popularity. She is trying to maneuver through a minority government. And yes, she is a big Machiavellian. She wants to seize the opportunity and actually gain an absolute majority so that she can rule like her idol, Margaret Thatcher.
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Emma Nelson
And this is now being reflected in the way that the Nikkei is behaving.
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Inzaman Rashid
You're exactly right. You know, the key issue for the stock market at the end of the day is the continued increase in the corporate metabolism. You find records, amount of mergers and acquisition records, amount of business investment here in Japan. So it's corporations with new CEOs really wanting to create a new Japan. And that's really what's driving the stock market higher. Because as you know, what you want to know is you want to know that there's going to be a brighter future. And that for the first time in 30 years is what corporate leaders want to do.
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Emma Nelson
Tell us a little bit more about this corporate metabolism there. I mean, you mentioned business investment. You also mentioned M and A. That's not often something that creates an awful lot of profit along a long way down the line. But that confidence, in what sectors are we seeing this?
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Inzaman Rashid
It's very interesting that you see it across the board. You're seeing it in the food sector, in the chemical sector. There's talk of even a merger of some of the car companies, Nissan and Honda here in Japan. And as you know, anybody who has looked at Japan, you know Japan has always supported zombie companies. Now those zombie companies are being pushed out. You've got bankruptcies, increases, and you've got the strong companies actually wanting to acquire their competitors to get bigger and better.
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Emma Nelson
So explain to us a little bit more about how this balances out with a weakened yen because they are pulling in different directions.
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Inzaman Rashid
It's interesting, right? You know, you actually find that the yen is depreciating primarily because of actual growing confidence in the United States of America. There's a lot of investment activity. The protectionism of Donald Trump, ironically is forcing Japanese to invest more overseas, particularly in the United States of America. So, you know it is. And you got to remember one thing. For every 10 yen of yen weakness, profits in Japanese companies go up by about 8 percentage points. So it is actually a bit of a virtuous cycle from a profitability perspective.
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Emma Nelson
Goldman Sachs is predicting the economy to grow by 0.8%. Is that enough for Japan this year?
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Inzaman Rashid
Look, Japan does. It's not a high growth economy. Remember, I've got the population declining very nicely every day. The population of Japan falls by about 2,200 people. So it's not a high growth economy. And it's all about corporate restructuring. And as you know, Japanese companies are incredibly rich with almost 1 times GDP of cash on balance sheet. That money being deployed for mergers and acquisition, for business investment and yes, also to pay Mr. And Mrs. Watanabe a little bit more. That's where the future of Japan finally, after 30 years of being frozen, Japan is now becoming unstuck, which is obviously.
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Emma Nelson
Great news for everybody. Tell me a little bit about how long we believe this is going to happen because a current trend of rising stock prices has to end somewhere. Is this a temporary blip or are we looking at a major overhaul of Japan and its prospects?
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Inzaman Rashid
Look, I think that it is a major overhaul in the sense of that you know, you've got these incredibly lazy balance sheet of corporations. You've got an incredibly competitive and, you know, overly competitive industrial structure. And this streamlining is really what drives the aspirations. And the interesting thing is certainly in contrast to the United States of America, where you see the investors is incredibly dominated on just this AI dream, in Japan, very differently, you find that the recovery, the investment, the mergers, it's actually broad based. Whether it is the hairdressers, whether it is insurance companies, whether it is car companies, it is a broad based restructuring. And we have to add that geopolitics is also a huge catalyst is for Japan to get its house in order because it knows that the two big partners, the United States of America and the People's Republic of China, neither of them can be trusted. So Japan is going to have to do it on its own.
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Emma Nelson
And when it comes to this corporate restructuring, I mean you mentioned there the fact that it is, it is moving, it is doing things in contrast to the way that America's AI boom is so, so aggressive. But traditionally, I think that is the word to describe the way that business is done in Japan, the way that corporations are structured, the way that businesses is laid out. It has always been a very traditional way of doing things which for a very long time people have said have held it back. What has now suddenly made it so attractive?
- [37:11]
Inzaman Rashid
So what has made it very attractive is most importantly that even the job giants, even Hitachi Corporation, even Toyota Corporation, they have to fight to retain talent because the labor scarcity is so severe, the war for talent is breaking. This proud traditional management team, lifetime employment and all this stuff that you associated with Japanese corporate culture, which was slow but persistent. Now there's a sense of urgency because everybody, even Hitachi and Toyota, even the blue chip companies have to fight to retain their talents. Let me be specific. Last year was the first year ever that Japanese companies hired more people mid career than at the graduate intake. And you find now that the average graduate of elite university in Japan quits their elite job after four years on average. Unheard of for the parent generation. But the next generation, the new generation of Japanese wants to seize opportunity, does not want to become a boring salaryman.
- [38:26]
Emma Nelson
So what does this now mean for the rest of the world, having looked at Japan in a certain way, now having to look differently?
- [38:32]
Inzaman Rashid
It is interesting because I mean, the rest of the world certainly has a lot of their own little problems, whether it's Europe, whether it's the uk, whether it is India. And I think, you know, the key issue is that the Japanese have very, very strong balance sheets. They are incredibly rich and they do have a lot of intellectual property. And as a result of that, I think you will see Japanese companies merging and acquiring global companies, particularly here in Asia Pacific, with a big focus on India and Indonesia and the Philippines.
- [39:09]
Emma Nelson
Jesper Cole, economist and expert director at Monax Group in Tokyo, thank you so much for joining us. On the globalist.
- [39:18]
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- [39:55]
Emma Nelson
Now. Let's head now to the luxury sector. Heritage brands are set to see continued growth in 2026, but they do face headwinds as competitors enter their primary market. In our Paris studio, Monocle Radio's Anita Riota sat down with Adrienne Klasse, who's the Financial Times Paris luxury correspondent. And she began by asking Adrienne how luxury brands are looking this year at discounting.
- [40:19]
Adrienne Klaser
Well, in order to talk about discounting, I think we need to go back and look at what's happened in the evolution of pricing, largely since 2019. So 2019 is when the luxury industry, like completely explodes. It's been growing very steadily for a long time. There's a dip during the pandemic and then surprisingly during the pandemic, it accelerated. Accelerates even faster because people are sat at home and they are buying luxury items online with sort of, you know, extra money and checks from the government. Then 2023 happens. China's economy starts dipping quite significantly. There's a real consumer confidence problem there. And that's been like the engine of growth up until that point. And things start to change quite substantially. I think unravel is too strong a word because this is an industry that's had sort of like huge success, but things moderate more and it's a harder landing than a lot of people were expecting. So major luxury brands essentially just jacked up their prices quite extensively during the boom years and that worked very well for them. And I remember when I started this job three years ago, I was talking to high level executives in the industry who were saying price elasticity on top luxury brands is endless. And what they mean by that is our brands are so desirable that we can just keep increasing prices and there's no sort of ceiling on that because people want our products so badly. That they're willing to pay pretty much whatever we ask for. That now, in a more difficult moment, you still need to move product and you've got a lot of inventory hanging around. Things are a bit slower, things are more difficult. So you're starting to see a lot more discounting for luxury brands. That's really difficult for the really top brands because they say, we don't discount, right? You go into Louis Vuitton, they say, we never go on sale. And essentially they don't. But for a lot of other brands within luxury, a lot more of their sales are being made at discounters at outlets. And so that's a big change. And that's kind of a big change that these brands do not want because they want control of pricing, they want to sell it full price, and they don't want consumers to see their product as something that they can get for a cut rate somewhere else.
- [42:20]
Anita Riota
A bright spot we often see for luxury brands, especially those based here in Europe, is how strong their performance in markets like China and the US has been in the last few years especially. You've just published a piece that actually now they might face maybe unexpected challengers to that market share. Can you tell us a bit more about that?
- [42:43]
Adrienne Klaser
Sure. So the US has always been, for a very long time, has always been luxury's biggest market. It's just, it's massive, it's quite mature, still growing at a decent percentage. China was the growth engine during the boom years. As of 2023, though, the Chinese market essentially craters. I mean, we're talking, you know, falling by, you know, 10, 20, 20%. China has been problematic for the past few years for a lot of luxury brands that became very dependent on it. And during that period, at the same time, you have the rise of local brands that are doing luxury in a different way. And this is not entirely new, but I think the power of a lot of those brands is increasing. And also as a reflection of sort of the high price increases that sort of European and Western luxury brands have have charged as well as a desire for something different, less like monocultural and more reflective of local tastes. A lot of people are turning towards local luxury brands who are interpreting what luxury can be in a different kind of way. So you have some really interesting rising luxury brands in China. One of the ones that I looked at, I was in Beijing sort of in December, was Lao Pu Gold, which is a jewelry product. And, you know, jewelry has been made in China for, you know, for forever. They have a thriving gold industry. But this is really playing In a luxury space, you go into the store and it doesn't feel like a mid level jeweler. It feels like going into a very rarefied space. The objects are beautiful, but it's very much tailored to that local market. You know, it symbols that, you know, objects, tea sets, that kind of thing that really sort of speak to something a little bit different. Different. And you're also seeing similar things in the US where sort of, you know, a lot of consumers, again reflecting price rises, but also possibly reflecting a more sort of conservative, inward looking cultural moment in America, are turning back to American brands that sort of like foster this image of Americana. So I'm thinking of like Ralph Lauren, which has been on an absolute tear, or even Coach, which was not doing very well for a very long time. It was very cool, sort of early millennial time, had a huge dip and then it's reemerged in the past sort of three, four years as like the bag choice for Gen Z, which, you know, who would have thought now they're aiming to grow to 10 billion. So. So that's creating a bit of competition. Again, it's at a lower price point than a lot of the big luxury brands, but it's attracting a lot of consumers who are interested in something a bit different.
- [45:08]
Anita Riota
So in your reporting, which clearly has taken you to various markets, taking you to brands that are positioned at various, various price points, you know, I think what's dominated the conversation around luxury a little bit is how much some brands are struggling. But you do see continued growth, you do see sustained momentum in all of your reporting. What are some strategies or decisions that you have found to lead these houses to be successful in either maintaining their growth or seeing a real burst?
- [45:39]
Adrienne Klaser
I would say probably the biggest success story in luxury is, which might seem like an obvious thing to say, but you know, Hermes is, it's timeless. It's seen as like the pinnacle of luxury. They very tightly control, you know, how many bags they make of their most in demand things. I'm thinking of like Kelly and Birkin bags. You can't walk into a store and get them. You have to be on a wait list for, you know, who knows how long, you know, do a little dance, you know, pray to various gods in order to get your hands on one. And, and they have pushed prices up much more slowly. They've just been very consistent and true to what they do, which is very high quality, focused on, you know, certain kinds of products. And that has meant that throughout this quite tumultuous period, for a good chunk of the rest of the industry. They have just had a very smooth trajectory.
- [46:30]
Emma Nelson
And that was the Financial Times. Adrienne Clauser there talking to Anita Riota in our studio at Bru Bachemont in Paris. You're listening to the Globalist on Monocle Radio. We're going to stay in Paris, indeed in France, for the rest of today's programme. And we're going to focus now on the design industry year as it kicks into gear this week in the French capital, Paris. Decorph started yesterday. It focuses on textiles and wallpapers, exhibitions, product launches all over the city. It's complementing one of the industry's largest trade shows, Maisons Aubrey, which kicks off today. That's in the Nord Widepants exhibition. Trying to keep across all this is Monocle's design editor, Nick Monice. Nick, good morning. Or should I say, bonjour? Where are you? How are you?
- [47:19]
Nick Moniz
I'm gonna be honest, I'm still in my hotel room. I had planned.
- [47:22]
Emma Nelson
I'm disappointed, Nick.
- [47:23]
Nick Moniz
No, I plan to be on my way to Maison Objet. Well, I will jet straight after our conversation here. Sort of classic. Well, whenever we talk, it's always about like, how big was your night? And I'll be honest, pretty big.
- [47:38]
Emma Nelson
All right, I'll bite. How big was your night?
- [47:41]
Nick Moniz
Well, it's just like it's, it's the first design event of the year. There are so many cocktails. It's like cocktail parties and cocktails. I mean, they kind of go hand in hand, don't they, Emma? So sort of crawling into bed at about 1:30, which actually isn't that late, but, you know, when you've still got a, you know, maybe write an opinion piece and talk to you on the radio in the morning, it's maybe a little bit. Maybe a little bit too late, maybe. I would have liked to have wrapped up at maybe about midnight, 12:30.
- [48:09]
Emma Nelson
Okay. That extra half hour makes all the difference, doesn't it? It's the equivalent of 10 hours sleep. Right. So when, when you were all getting together, clearly a good night was had. How is the design world in Paris this year? I mean, you're all getting together splendidly. Getting along?
- [48:23]
Nick Moniz
Yeah. Oh, no, absolutely. I mean, it's, it's. Paris is, is kind of an interesting moment. Cause they, they, they have two events each year. So they have the January edition essentially, of what is their design week, and then the September edition. And like I said, there's this, there's kind of a back to school energy right now. You know, a lot a Lot of French brands obviously showing their works out at the trade hall today. But then for Maison Objet, but then across the city, I mean I was swinging past Italian furniture showrooms. This is sort of their moment to really start thinking about Salona del Mobile, which is the big Milan based trade fair. It's really kind of a launching of ships moment, which is quite nice and huge international turnout. There are so many Americans here. It is, it's kind of blown my mind more than any year seemingly. I mean, I felt like, I mean not to go back to Covid, but obviously like they, they kind of completely dropped off the radar in Europe for a few years and now they are truly back in force. It was like American accents left, right and center yesterday.
- [49:26]
Emma Nelson
So when you do have this, this, this healthy rivalry between Milan and Paris both trying to woo these American hearts, what does Paris do to try and sort of show her, show her more attractive side. What, what does Paris have over Milan?
- [49:39]
Nick Moniz
I, I think Paris does the, I guess for, for one of a better expression like the in the city component a lot better I think than Milan. It's, it's a lot, it's a lot more organized because again you've got the, the trade fair and the trade hall moment. Maison Objet in Paris, Salone del Mobile in Milan. Milan. But in Milan, in the city, in the, in the galleries, in the showrooms, in the exhibition space, it's kind of a little bit of a free for all. Whereas Paris has actually got around to getting organized and linking up all the various different venues. You can find them all in one place. They're branded as Maison Oberge in the city. There's also Paris Deco off, which is really well organized as well. You know, it's something as simple as these are. There's a singular website you can kind of go to for, for both. And it doesn't sound like, like much, but there's a singular website you can go to and you can kind of find everything that's going on versus Milan, which is not as well organized, was a little bit trickier to, to, to navigate and negotiate. So there's certainly that taking place and then it happens in Milan as well. But I see a lot of French brands, you know, they're flying out their American clients. They're, they're, you know, the Pierre Frey representative in New York has taken 10 of its top clients over here. Two pairs. Paris to go to the Pierre Frey headquarters to touch all their lovely textiles and talk about how they want to furnish their homes or their upcoming Projects.
- [50:58]
Emma Nelson
So that's the logistics side. It looks like Paris is winning. But in terms of the design and the style and, and the differentiation, where is Paris getting the edge this year?
- [51:09]
Nick Moniz
I think there's, there's the craft side of it and there's, there's that kind of amazing obviously heritage of the, the atelier. There's, there's links to the expertise of, in the, in the fashion sector, which certainly bleeds across into the design sector. I mean everywhere you kind of go, every showroom you drop into, everyone's quite proud of like, you know, this is made in France, you know, or I'm working, working with an artisan just outside of Paris. Sandra Benamou was one of my favorite showcases to drop past yesterday. She's at Gallery Dina Verney who is Males, the artist Males muse was. That was Dina, not Sandra, sorry Dana, Dina, who the gallery is named after. But Sandra's basically come in and, and worked with all the, all the artworks that the gallery had to, to, to I guess play with. So you know, there's, there's Picasso, ceramics, there's sculptures by me all as I said, but they're alongside these amazing made in France pieces. So you can kind of have. There's a real point of pride in the fact that everything is typically, everything that's being presented is typically made locally and then it's being paired with world class artworks and the like.
- [52:20]
Emma Nelson
Finally and briefly we mentioned Paris Dekoff which is focusing on textiles, which is not necessarily always like the big headline, but this is something that Paris and Pari Deko off is working very hard on, isn't it?
- [52:32]
Nick Moniz
Yeah, absolutely. So I mean this is really kind of the Paris decoff. Very smart taking place at the same time as Maison Be, which is obviously all the furniture, but Deco off, sort of the only moment like this where yeah, you're showing textiles that. I'm going to be honest, it's not the most sexy topic. You know, you, you compare a panel of sample textile versus a beautiful chair and you're probably going to gravitate towards the chair. But what they have done is, it's, it's, it's the sheer force of, of numbers. You know that Sacco, which is a Swedish brand, this, this is where they launch all their, all their textiles and I, I kind of find myself almost getting sucked in and like starting to think about, you know, rethinking maybe my sofa at home. How would I want that upholstered as I'm kind of going through these, these spaces in these showrooms. Or, you know, curtains. I'm looking at some very sad curtains.
- [53:23]
Claudia Jacob
Actually.
- [53:23]
Nick Moniz
They're quite nice curtains in my hotel room. But you know, what, what, what can I do with my curtains at home to, to completely change my space? And maybe that's the, the key to all of this and why it matters. It's the fact that, that, you know, textiles are the singular thing that we can very, that we can use to very quickly change the feel of a space, whether it's reupholstering a chair or simply a new kind of bedspread. So there's, there's a, there's a real significance to it in the immediacy of the impact that it can have.
- [53:50]
Emma Nelson
Nick Manis, get those curtains open, get a coffee in you and head out into Paris for us. Thank you so much for, for joining us on the line from the French capital as Monocle's design editor. There you're listening to, to the Globalist. And a wider look at French news. Now. Claudia Jacob is a writer for Monocle and she joins us with all the big headlines. Good morning, Claudia, how are you?
- [54:12]
Claudia Jacob
Good morning, everyone.
- [54:13]
Emma Nelson
Good, good to see you. Right, we want to start with the renovation of the area around the Tour Montparnasse in Paris. Now I used to work in the Tour Montparnasse. It was rather uninspiring and it has, it occupies that rather strange role of being one of the few high rise buildings in an otherwise tightly controlled cityscape. Renzo Piano wants to get his hands on it.
- [54:36]
Claudia Jacob
That's right. It was built in the 1970s and I mean, if you mention the Tour de Montparmesse to Parisians, they'll sort of roll their eyes at you and say it's the biggest architectural mistake that Paris ever made. It's sort of this urban block that was, I think, envisioned as a symbol of like post war growth and economic boom, but instead it's actually just come to symbolize the antithesis of economic. Everything that Paris Parisian architecture is about.
- [54:57]
Emma Nelson
Hits a big brown mess.
- [54:58]
Claudia Jacob
Yeah, it's hideous. And so the job of fixing it has gone to Renzo Piano, which, I mean, poor guy, he's 88, you know, like, when's he going to have some time to himself? But he is best known for designing the Centre Pompidour, which of course is currently under construction. So he needs to make himself busy with another project. And so, yeah, they're kicking off this renovation in March. This colossal project to transform the city's tallest skyscraper into a sort of modern, revamped or Horseman style complex. It's a. It's a tall order.
- [55:29]
Emma Nelson
Are they going to touch the tower itself?
- [55:30]
Claudia Jacob
They are. They're going to revamp it. They're going to change it into, you know, they add sports centers, they want to add an urban farm, I'm told, shady green areas. I mean, it's very much in keeping with what an hidalgo has really been known for throughout her tenure, which is sort of, you know, favouring cyclists and pedestrians and very much penalizing cars.
- [55:47]
Emma Nelson
Piano is very good at shapes. Strange, powerful shapes. We have the Shard here in the United Kingdom in London, and also we have the Cube up at Paddington. So do we know what shape the tour Montparnasse will take?
- [55:58]
Claudia Jacob
We don't know really what it's going to look like. But I think what they're trying to get back to is, you know, Montparnasse in the 20th century was sort of where the artistic elite started to gather. You know, they moved from Montmartre to Montparnasse. It was considered slightly more affordable. And you have literary cafes like La Rotonde and La Coupole, which are sort of the proof of that. But this sense of like bohemianism and where sort of intellectual elite and artists were gather has really been lost, I would say, from. From that area. And it does feel like it's in dire need of a bit of. A bit of a change.
- [56:25]
Emma Nelson
It needs love. Right, okay, let's move again to another area of the Paris is famous for, which is luxury and luxury jewelry as well. The Cartier foundation, which is amazing, is one of those. It's a sort of at the spearhead of a real drive within the Paris luxury sector to mark itself out not. Not just as a place where there is heritage, but that heritage is being transmitted beautifully to the next generation.
- [56:51]
Claudia Jacob
That's right. I mean, you know, we heard from, you know, Nick just then about the design fair he's at the moment. I mean, 90 million euros worth of artworks were sold in the first four hours of art Basel in Paris in October. I mean, we don't have sort of exactly comparable figures for something like Frieze London, but it didn't create anywhere near the kinds of profits that we're seeing in Paris. You mentioned the Cartier foundation near the Louvre. You know, it joins a whole host of private art collections which sit at that intersection between luxury art and culture. You know, like the Fondation Louis Vuitton, the Bourse de Commerce, which is owned by the luxury conglomerate kering, and Chanel's Le 19M et cetera you know, France in the last 20 years has doubled its share in the global art market and it's not showing any signs of slowing down. And I think it has been able to really capitalise on Brexit, on galleries, deciding to sort of change the centre of gravity of where private art sits. And they're using Paris as their base increasingly.
- [57:48]
Emma Nelson
Finally, we have but 40 seconds to talk about bistros, one of Paris's great things where you can actually sit down and get a reasonably good meal at top speed. And it's so good. Macron wants to turn the bistro into a UNESCO World Heritage.
- [58:03]
Claudia Jacob
He calls them the guardians of time. I mean, they span sort of centuries and generations of people. But I think the fact that France now is seeking to protect them through UNESCO is actually also an admission of their decline. You know, around 40,000 remain today from about 500,000 a century ago. And, you know, things like delivery apps and fast food chains really mean that they're under threat and need protecting. But I think there's something very sort of comforting about the French bistrot.
- [58:29]
Emma Nelson
There is Claudia Jacob, writer for Monocle. Thank you so much for joining me in the studio. And that's all the time we have for today's programme. The warmest of thanks to all my guests and to the producers too, Anita Riota and Hassan Anderson. Our research was Anneliese Maynard and our studio manager was Elliot Greenfield. After the headlines, there's more music on the way. Debriefings live at midday here in London. And the Globalist is back at the same time tomorrow. Hope you can join me for that if you can. But for now, from me, Emma Nelson, Goodbye. Thank you very much for listening.
- [59:08]
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