TL;DR

U.S.-Japan 15% tariff deal lifts Nikkei; ADB cuts Asia growth; gold, Bitcoin hit records on trade risks.

Highlights

• U.S. and Japan agree to a 15% reciprocal tariff (down from 25%), boosting Nikkei and Japanese automakers1.
• U.S. finalizes 19% tariffs on Indonesian and Philippine exports, with broad U.S. market access in return1112.
• European auto stocks rally 4.2% on hopes for similar U.S.-EU tariff reductions14.
• Asian Development Bank cuts 2025 developing Asia growth forecast to 4.7% on U.S. tariffs and China property weakness3.
• Japan PM Ishiba expected to resign by end of August; Japan’s 40-year bond auction sees weakest demand since 2011213.
• China and U.S. set July 27–30 trade talks in Sweden to address tariffs and market access4.
• gold rises above $3,415/oz and Bitcoin tops $120,000 as haven demand increases amid trade tensions and lower yields89.
• Amazon and McKinsey scale back China AI operations; AWS closes Shanghai AI lab, following IBM and Microsoft moves618.
• Chinese hackers exploit Microsoft SharePoint flaw, breaching U.S. agencies and firms; Microsoft faces renewed security scrutiny5.
• Mexico plans $7–10 billion sovereign bond sale to support Pemex, lifting Pemex bonds7.
• Apple set to win EU approval for App Store fee overhaul; UK regulator proposes “strategic market status” for Apple and Google 1516.
• Vale beats Q2 iron ore output forecast, but sales lag and prices soften; nickel and copper output rise19.

Commentary

Traders are focused on a series of U.S.-driven bilateral trade deals ahead of the August 1 tariff deadline. The U.S.-Japan agreement, with a lower-than-expected 15% tariff, triggered a sharp rally in Japanese equities and automakers, and fueled optimism in European auto stocks that similar tariff relief may be forthcoming114. The U.S. also secured new trade terms with Indonesia and the Philippines, locking in 19% tariffs but gaining substantial market access for U.S. goods1112. These deals are part of a broader U.S. effort to reset trade terms across Asia, but the Asian Development Bank’s growth downgrade signals that persistent tariffs and China’s property market weakness continue to weigh on regional prospects3.

Japanese political uncertainty is back in focus, with PM Ishiba reportedly preparing to resign and the 40-year bond auction drawing the weakest demand in over a decade. This has implications for Japanese government bond yields and may add volatility to JGBs and the yen, especially as fiscal and leadership questions mount213.

Safe-haven flows remain pronounced. gold and Bitcoin are both near record highs, supported by trade friction, lower Treasury yields, and a cautious Fed outlook89. The U.S. 10-year yield has fallen to a two-week low, and traders will be watching next week’s Fed meeting and the upcoming U.S.-China trade talks in Sweden for further direction48.

Tech and cybersecurity risks are increasingly relevant. U.S. tech and consulting firms are reducing China AI exposure, with AWS shuttering its Shanghai lab and McKinsey restricting AI work, reflecting deepening U.S.-China tech decoupling618. Separately, a major Microsoft SharePoint vulnerability exploited by Chinese hackers has heightened scrutiny of software supply chains and may impact sentiment toward U.S. tech names5.

In commodities, Vale ’s iron ore production exceeded forecasts, but weaker sales and prices highlight soft global steel demand19. Mexico’s planned sovereign bond sale to support Pemex has been well received, easing near-term default risk for the state oil company7. Meanwhile, Apple is set to clear a key regulatory hurdle in the EU, but faces new scrutiny in the UK as regulators move to tighten oversight of digital platforms1516.