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FirstFT: Ukraine’s deadly strike on Russian military barracks

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Good morning and happy new year. Welcome to the inaugural FirstFT of 2023.

Moscow said a Ukrainian air strike on army barracks in the Russian-occupied town of Makiivka killed 63 soldiers, in one of the bloodiest blows to the Kremlin’s ground forces since the start of the war.

The defence ministry said four high-explosive missiles struck the town’s temporary deployment base — a school building that stood near an ammunition dump and weapons cache. Two additional missiles were shot down by Russian air defences, it added, without saying when the attack occurred.

Russian military bloggers suggested casualties were far greater than the official figures, claiming that hundreds of newly mobilised troops had died or were missing. While not taking credit for the strike, the Ukrainian military said in a Telegram post that the Makiivka attack took place on New Year’s Eve, killing 400 Russian soldiers and injuring 300.

The air strike shows the damage western-supplied Himars missiles can inflict on Russian forces, who were forced to retreat in the face of a Ukrainian counter-offensive in the east and south last year. But it also underlines poor tactical judgment from the Russian army commanders, according to analysts.

1. Japan to offer families ¥1mn per child to leave Tokyo As the government attempts to reverse decades of demographic decline, economic migration and the lure of the world’s biggest metropolis, the Japanese government will offer families up to ¥1mn ($7,600) per child if they swap overcrowded Tokyo for municipalities outside the city, according to officials familiar with the plan.

2. Hong Kong home sales drop to lowest level in 15 years Hong Kong home sales have fallen 40 per cent year-on-year to their lowest level since the 2008 global financial crisis, data from the local land registry and projections from real estate agencies have shown. The slump in one of the world’s priciest real estate markets is expected to only bottom out by mid-2023.

3. Recession predicted to hit a third of the world this year A third of the global economy will be hit by recession this year, the head of the IMF has said, as she warned that the world faces a “tougher” year in 2023 than the previous 12 months. The US, EU and China are all slowing simultaneously, said IMF managing director Kristalina Georgieva.

4. Turkish exports hit record high in 2022 Turkey recorded a 13 per cent rise in exports by value, with sales hitting $254bn in 2022, President Recep Tayyip Erdoğan said yesterday. The new record comes as the slump in the value of the lira made businesses’ products more competitive overseas, with the country also benefiting from closer economic ties to Russia.

5. Commodities boom raises fear of big losses for retail investors Retail trading volumes in commodity futures and the largest commodity-focused investment funds surged in 2022. But while commodities have had a much better recent record than that of stocks and bonds, some market participants and analysts have voiced fears about retail traders wading in to a highly volatile market dominated by specialised players.

The day ahead

New US Congress sworn in When the 118th US Congress is sworn in on Tuesday, seven fresh faces will join the ranks of the 100-member Senate. Meet the newcomers, who include a hoodie-wearing stroke survivor, a Trump-backed author and an ex-mixed martial arts fighter.

In memoriam Pelé’s family will hold a burial for the superstar Brazilian footballer after a procession through São Paulo. Across the world at the Vatican, Pope Emeritus Benedict XVI will lie in state at Vatican. (Independent, AP)

What else we’re reading

Business trends, risks and people to watch in 2023 FT reporters around the globe break down what to look for this year in the corporate world in sectors from energy to private capital and technology. Read our analysis to get a jump start on the new year.

Millennials shatter oldest rule in politics People have tended to become more conservative as they grow older. From the “silent generation” born between 1928 and 1945 to “Gen X”, who came along between 1965 and 1980, this pattern has held firm — until now. The change has striking implications for UK Conservatives and US Republicans.

Taiwan’s military reforms fall short, experts say China’s more than two-decade push to build armed forces capable of realising its national ambitions has left Taiwan’s military dangerously outgunned. And the island’s recently announced conscription reform was little more than an emergency measure to end a chronic shortfall in military headcount, military analysts say.

The start-ups seeking a cure for old age The fantasy of living forever has endured for centuries, from finding renewal in a fountain of youth to gaining immortality from a philosopher’s stone. But as many people now spend their last decades in poor health, scientists are on a quest to further increase not just lifespan but also healthspan: the number of healthy years we live.

Stopping China’s growth cannot be a goal for the west Do we want China to fail? That question came up at a recent seminar Gideon Rachman attended for western policymakers and commentators. But the question instead should be: how do we manage the continuing rise of China? Gideon writes.

Take a break from the news

The clue 1-across on the latest cryptic crossword puzzle is: Mist shrouds river in flood (6). See if you can guess the answer.

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Rayna Prime

Rayna Prime

Rayna Prime Editor