Russia continues to iincrease the number of troops it has massed on the Ukrainian border, Nato’s secretary-general warned on Wednesday, even though Moscow insisted that it was withdrawing forces.

Jens Stoltenberg said the western security alliance was “prepared for the worst” as tension persisted over Ukraine, despite continuing diplomatic efforts to avert conflict even after Vladimir Putin, Russia’s president, announced a partial troop withdrawal on Tuesday.

“We have not seen any de-escalation,” Stoltenberg said on arriving at a two-day summit of Nato defence ministers in Brussels.

“We see they have increased the number of troops and more troops are on their way . . We are prepared for the worst.” His assessment was denied by Moscow on a day when hopes for diplomacy were clouded by conflicting claims over the status of the Russian forces deployed within striking distance of Ukraine’s border.

• Russia sanctions: The chair of the world’s most powerful financial watchdog called on western leaders to “think twice” before imposing sanctions on Russia, warning that some penalties risked undermining global financial stability.

• European security: France’s foreign minister, has called for a revamp of Europe’s security frameworkwarning that it has become “nearly obsolete” and risks allowing Russia to become a permanent threat on the continent.

Thanks for reading FirstFT Asia. Have feedback on today’s newsletter? Share your thoughts with us at [email protected] — Emily

Five more stories in the news

1. Fed prepared to tighten policy further if inflation persists Federal Reserve officials are set to raise interest rates next month and would be willing to tighten monetary policy more quickly than they currently anticipate if inflation does not come under control, according to the minutes of their latest meeting.

• More US markets news: US government debt has been hit with the most serious bout of volatility Since March 2020, making it more difficult for investors to transact in the world’s most important bond market.

2. Apple shareholders urged to vote against CEO pay package Institutional Shareholder Services, a top shareholder advisory group, has recommended that Apple investors vote against Tim Cook’s $99mn pay and bonuses packageforcing one of Silicon Valley’s most prominent campaigners on equality to defend his remuneration at the world’s most valuable company.

What do you think? Tell us in our latest poll.

3. Goldman bankers achieved ‘hero status’ for 1MDB work Goldman Sachs bankers who worked on a series of lucrative bond deals at the centre of the 1MDB scandal achieved “hero status” at the bank, according to testimony from Tim Leissner, a former executive who has pleaded guilty in connection with the case.

4. Ericsson says it may have paid Isis Shares in Ericsson fell sharply after Börje Ekholm, chief executive of the Swedish telecoms equipment maker, conceded it could have made payments to terror organisation Isis in Iraq. An internal investigation from 2019 found serious breaches of compliance rules in Iraq including payments for transport routes to evade local customs.

5. Chinese state pumps money into metaverse stakes As China competes to become the global centre of the new digital crazeits newly formed Metaverse Industry Committee announced yesterday that 17 companies had been included in the organisation to “promote the healthy, orderly and sustainable development of the metaverse”.

Coronavirus digest

• Xi Jinping has told Hong Kong to “take all necessary steps” to contain the city’s biggest coronavirus wave, sparking fears of more stringent measures as patients are left lying on beds outside hospitals in the Asian financial hub.

• England’s children aged five to 11 are to be offered a Covid-19 vaccine beginning in April.

• Heineken’s chief executive warned that “off the charts” cost inflation will push up the price of a pint and said the risk of outright shortages was growing.

• The European Medicines Agency is unlikely to grant conditional marketing authorisation to Merck’s Covid-19 antiviral pill molnupiravir this month as it grapples with “problematic” data.

• Opinion: We must face the looming threat of prolonged and messy but necessary debt restructuring, writes Martin Wolf.

The day ahead

ASEAN Foreign Ministers Retreat Officials will meet in Phnom Penh after a planned January retreat was postponed. Myanmar’s military government will not participate in the meeting after the bloc ruled that the country would only be permitted to send a “non-political” representative. (The Diplomat)

Hungarian PM hosts Brazilian President Viktor Orban will host Jair Bolsonaro one day after the Brazilian leader met Russian president Vladimir Putin — against the wishes of the US and other western allies amid the Ukraine crisis. (France 24)

Russia holds meeting on Ukraine at UN As the current head of the UN Security Council, Russian officials will hold a meeting on Ukraine at the UN headquarters in New York.

What else we’re reading

South Korea’s push for developed nation status On three occasions since 2008, the country has applied and been rejected for recognition by the index-maker MSCI as a developed market. The story has now become a key issue in presidential polls — but developed nation status may not give South Korea the win it hopes, writes Leo Lewis.

China falls short in Olympian effort to cut pollution While China has met its national air quality standard, its pollution levels still exceed World Health Organization guidelines, the Air Quality Life Index notes. When compared with Los Angeles, the most polluted city in the US, Beijing is still three times more polluted.

Are companies walking their diversity talk? On this episode of the Working It podcastIsabel Berwick talks to Taylor Nicole Rogers, the FT’s US labour and equality correspondent to get a snapshot of where corporate America stands on diversity, equity and inclusion. Taylor also talks about her own workplace experience as a black woman.

Unilever’s tea business tests PE’s conscience Workers on a Kenyan tea estate are still seeking medical compensation from the consumer goods group after seven people were killed and 56 women raped in a 2007 attack fuelled by ethnic tensions. Now, CVC’s $4.5bn deal to buy brands such as PG Tips means it will also be responsible for plantations in Africa.

Citi’s Jane Fraser ditches big league dreams Citigroup has conceded its ambition of becoming a top-three Wall Street investment bank in order to focus on businesses that offer growth opportunities while being less capital intensive. But making the case for the strategy will put its chief executive’s communication skills to the test.

Art

At Kettle’s Yard in Cambridge, the city that became a home for Ai Weiwei in 2018 following his self-imposed exile from China, the dissident artist has filled the galleries with an assortment of Chinese antiquities alongside his own artworks that either ape or playfully vandalise ancient masterpieces, as well as outright fakes, for his exhibition The Liberty of Doubt. The story they tell us has a lot to say about how we approach art.