TL;DR

US-Japan sign $550B trade deal with 15% tariffs; Nikkei, automakers rally; US-China talks set.

Highlights

• Trump announces $550B Japan investment deal with 15% reciprocal tariffs, expanded US access to Japanese autos and agriculture 1.
• Nikkei 225 jumps 3.5% as Japanese automakers surge on relief from lower-than-expected US tariffs 12.
• Trump says Japan will join $44B Alaska LNG export project; details and binding commitments pending 5.
• US and China to hold trade talks in Sweden July 27–30, aiming to address tariffs and market access 2.
• Amazon closes Shanghai AI lab amid US-China tensions, following similar R&D pullbacks by IBM and Microsoft 4.
• Japan’s Prime Minister Ishiba expected to resign by end of August after election losses and inflation pressures 10.
• Russia and Ukraine resume peace talks in Istanbul after seven weeks; US threatens secondary sanctions if no deal in 50 days 3.
• Over 100 aid groups warn of worsening famine in Gaza, call for cease-fire and humanitarian access 7.
• UK Supreme Court overturns Libor-rigging convictions, raising questions about other rate-manipulation cases 6.
• Thermo Fisher beats Q2 estimates with 3% revenue growth; stock up ~2% pre-market, guidance update expected 9.
• Binance Coin hits record $805, regains top-five crypto status; broader crypto market stable 8.
• India resumes tourist visas for Chinese nationals after five-year freeze, signaling improved relations 11.

Commentary

US-Japan trade developments are the main driver for risk sentiment this morning. The $550B investment package and 15% reciprocal tariffs are less severe than earlier threats, providing relief for Japanese exporters and supporting US equity futures 112. Japanese automakers saw outsized gains in Tokyo, and US-listed ADRs and sectors tied to autos and agriculture may see follow-through 12. However, the lack of detail on the investment structure and Japan’s pending confirmation are notable caveats 1.

The announcement of Japan’s potential participation in the Alaska LNG project could revive a long-stalled US energy infrastructure initiative, but the absence of binding commitments means traders should remain cautious about pricing in near-term upside for related US energy names 5. Political uncertainty in Japan is also in focus, as Prime Minister Ishiba’s expected resignation adds a layer of unpredictability to Japanese policy and the yen, though the trade deal is currently dominating sentiment 10.

US-China relations remain a key watch. Scheduled trade talks in Sweden suggest an opening for de-escalation, but continued tech decoupling is evident as Amazon shutters its Shanghai AI lab, following similar moves by IBM and Microsoft 24. This highlights ongoing risks for US tech firms with China exposure and may weigh on sentiment in the sector 4.

Geopolitical risks persist with Russia-Ukraine talks resuming but little expectation for breakthroughs, and the US warning of secondary sanctions on Russia adds headline risk for commodities and European markets 3. The humanitarian crisis in Gaza continues to escalate, with limited immediate market impact but potential for broader regional instability 7.

On the corporate front, Thermo Fisher ’s Q2 beat supports healthcare sentiment 9. In crypto, Binance Coin ’s record high is notable, but broader digital assets are stable 8. India’s reopening to Chinese tourists is a positive signal for Asian travel, but not a direct US market driver 11.