North Korea drops trash-filled balloons into South Korea

Good morning. In today’s newsletter we’re covering:

• Thailand’s former PM faces royal insult charges

• The looming verdict in Hong Kong’s landmark security trial

• An orange shortage reshaping the OJ industry

Our top story, however, is a strange one.

South Korea has accused North Korea of sending more than 150 balloons carrying “filth and garbage” over the countries’ shared border, as Pyongyang retaliated against a long-standing leafleting campaign by pro-democracy activists in the South.

The South Korean armed forces alerted citizens that “suspicious objects” presumed to be from North Korea were “identified in the front-line areas” late on Tuesday night.

Seoul also released images of large white balloons carrying bags, as well as of rubbish from one of the balloons strewn over a highway in a western district of the South Korean capital. According to unverified media reports in South Korea, some of the bags contained animal faeces.

FT Seoul correspondent Christian Davies has more on the bizarre balloon barrage.

Here’s what else I’m keeping tabs on today:

• Economic data: The US and Taiwan release revised first-quarter GDP figures, while the EU publishes April unemployment data.

• New Zealand: Finance minister Nicola Willis announces the 2024 Budget.

• UK: Parliament will be dissolved ahead of the July 4 general election. Here are the four crucial battlegrounds where parties will vie for victory ahead of the vote.

Five more top stories

1. Thai authorities say they plan to indict Thaksin Shinawatra for allegedly insulting the country’s monarchy. The charges highlight the long-standing political rivalries within Thailand’s ruling alliance, which is comprised of Thaksin’s Pheu Thai party and his former opponents in the conservative military-royalist establishment.

2. PwC China has been shunned by more high-profile clients in the country as the accounting firm braces for penalties related to its audit of distressed property developer Evergrande. Top retail lender China Merchants Bank and state-owned construction group China Railway are the latest to ditch the Big Four firm, opting for its rival Deloitte.

3. Exclusive: Europe has only a fraction of the air defence capabilities needed to protect its eastern flank, according to Nato’s own internal calculations. Russia’s war against Ukraine has underscored the importance of air defence, but the alliance’s own assessments reveal the scale of the continent’s vulnerabilities.

4. The Singapore Airlines flight that encountered severe turbulence last week dropped 178ft in under five seconds with passengers experiencing rapid changes in g-force, according to a preliminary investigation. The report found that these abrupt changes “likely caused the injuries to the crew and passengers”.

5. A global bond sell-off yesterday prompted stocks to retreat as lukewarm sales of US Treasuries weakened investor sentiment and investors worried anew about the impact of interest rates remaining higher for longer. Tepid demand for an auction of $44bn in new seven-year Treasury notes marked the third weak US government bond sale in two days.

News in-depth

A Hong Kong court is set to deliver a long-awaited verdict this week in the territory’s biggest national security trial to date, as Beijing wields sweeping legislation to remove 47 of the city’s most prominent political opposition figures from public life. If convicted, the defendants who have not pleaded guilty could face life imprisonment. While Beijing hopes Hong Kong returns to “business as usual” after the trial, some believe the city’s reputation will continue to be overshadowed by its national security push.

We’re also reading . . . 

• European far right: Rightwing populist parties are making inroads with young Europeans in a trend that will loom large over next week’s European parliament elections.

• Taiwan parliament’s power grab: The opposition-dominated legislature’s move to broaden its authority stokes partisan divisions, which could be exploited by China, our editorial board writes.

• Private equity: Employee share schemes could help a sector being squeezed by higher interest rates and a sluggish listings market, writes Brooke Masters.

Chart of the day

Orange juice prices have soared to record highs, driven by bad weather and disease in Brazil, the world’s largest exporter. The orange shortage has prompted a search for alternatives, including in Japan, where one retail giant has turned to the country’s domestic supply of mandarins.

Take a break from the news

Nicolas Berggruen, once known as “the homeless billionaire”, is putting down roots in Venice. With his purchase of the Palazzo Malipiero last year, the German-American investor and philanthropist is emerging as a modern-day Medici, writes James Reginato. It’s all part of his plan to change the world with big ideas.

Additional contributions from Tee Zhuo and Gordon Smith