FirstFT: Houthis hit US-owned cargo ship

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Good morning. Iran-backed Houthis struck a US-owned cargo ship yesterday in the first direct assault on a commercial vessel since American and British forces launched strikes against the Yemeni rebels last week.

The missile attack in the Gulf of Aden will increase concerns about the safety of ships transiting through the Middle East’s waterways even as the US seeks to deter the Houthi militants through military action.

The Houthis have already severely disrupted maritime trade through the Red Sea after carrying out about 30 attacks on commercial vessels since November, and vowed to respond aggressively to the barrage of missiles and bombs the US and UK have launched since Friday.

The Iran-backed group said it would continue targeting ships in response to Israel’s offensive against Hamas, the Palestinian militant movement, in Gaza.

Yesterday’s attack marked the first time a ship has been hit by a missile in the Gulf of Aden rather than the far narrower southern part of the Red Sea. Our reporters have the full story here.

And here’s what else I’m keeping tabs on today:

• Bank of Japan data: Corporate goods price index for December will be released today.

• Indian bank earnings: HDFC Bank, India’s largest private-sector bank, along with Federal Bank and Bank of Maharashtra are set to report earnings.

• European Commission: The group is expected to extend until June 2025 the suspension of tariffs and import quotas on Ukrainian products.

• Iowa caucus: Iowa Republicans will caucus at 7pm local time (8am HKT) to decide on who they want to be their presidential nominee. Donald Trump has a commanding lead in the polls. Follow our live blog for the latest.

Five more top stories

1. The Maldives has given India until mid-March to withdraw its troops from the archipelago nation, as its new pro-China president draws closer to Beijing. The notice follows a five-day visit by Mohamed Muizzu to China on his first state trip since taking office. Muizzu won last year’s election after campaigning on an “India Out” platform, as our south Asia bureau chief John Reed details here.

2. Ukraine said it had shot down a Russian spy plane and badly damaged a second over the Sea of Azov region, dealing a significant blow to Moscow’s air power. The strikes on the two command and control aircraft represents a significant boost to Ukraine’s counteroffensive.

3. A majority of Japan’s prime-listed companies failed to disclose capital efficiency improvement plans requested by the Tokyo stock exchange. The Japan Exchange Group, which controls the Tokyo stock market, yesterday publicly named 660 of the 1,656 companies as having complied with its request as part of the exchange’s name and shame approach.

4. Taiwan has lost one of its few diplomatic allies after Nauru switched recognition to Beijing, a sign of increasing Chinese pressure on the country after it elected Lai Ching-te its new president. Nauru’s change of ties reduced the number of countries that recognise Taiwan as a sovereign independent state to just 12.

5. The compliance officer of a UK foreign exchange brokerage was told by his employer to obtain a visa for an alleged Chinese spy, according to claims set out in an employment tribunal ruling. The UK subsidiary of a Hong Kong-registered group, Goldenway Global Investments, sought a work visa for an individual who was a “Chinese espionage agent”, according to new allegations. Read the full story.

The Big Read

Last October, Boeing chief executive Dave Calhoun said the US plane maker was focusing on improving the quality of its aircraft. The company, he told analysts, had in recent years “added rigour” to its “quality processes”. Calhoun now knows that his reputation is on the line as the Federal Aviation Administration begins an investigation into a dangerous blowout of a section of the fuselage of an Alaska Airlines flight just over a week ago.

We’re also reading . . . 

Chart of the day

A steep increase in petrochemical production in China and the US has led to a global oversupply of industrial chemicals such as polyethylene that are used in plastics. The supply glut has sent the price of new material so low that its recycled alternative has become uneconomical to use.

Take a break from the news

While science struggles fully to explain the phenomenon of Seasonal Affective Disorder (SAD), most of us recognise that a sunny day can provide an emotional boost. Meet the two Royal College of Art graduates who set about recreating a mini sun on the ceiling — albeit one that will set you back £8,000.

Additional contributions from Gordon Smith and Tee Zhuo