Spending for a rainy day
Japan, South Korea, Myanmar, India, the EU, and Canada.
Hello,
Here are the five things you need to know today:
JAPAN. Tokyo sends market signals for political ends.
SOUTH KOREA. Trump revives tariff threats against Seoul.
MYANMAR. A sham election retrofits the military in civilian clothes.
INDIA. EUROPE. The ‘mother of all deals’ is a boon for autos.
CANADA. Carney should be able to skirt punishment for now.
Geopolitical Dispatch is a daily strategic briefing for business leaders and investors, based on the US Presidential Daily Brief. Covering five top global developments at 5 am Eastern Time, Geopolitical Dispatch gives you visibility of events in context.
JAPAN. Flooding the market
Tokyo sends market signals for political ends.
The yen surged to multi-month highs on rumours of government intervention and a New York Fed rate check — a perceived step towards coordinated action. Sanae Takaichi said the US alliance would collapse if Japan ignored Taiwan.
INTELLIGENCE. Takaichi’s snap election and spending promises have spooked bond markets and created incentives for intervention in the yen. Signs of allied coordination have added fuel to the fire. But for now, traders are speculating. Official statements have deliberately kept all options open. Market data suggests no reserves have been deployed. Joint intervention would be fraught for both sides. But the possibility alone may have the desired pre-poll effect.
FOR BUSINESS. Japan may be able to slow the yen’s slide through management, but will not reverse the impact of US deficits, bond-market nerves, and the search for safe havens. If it acted with US support, however, the impact (and risks) would be far greater. Global uncertainty is ensuring wider currency exchange ranges, more political involvement in markets, and greater correlation between currency moves, bond stress and non-fiat commodity hedges like gold.
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SOUTH KOREA. Limited warranty
Trump revives tariff threats against Seoul.
Donald Trump threatened 25% tariffs after accusing the National Assembly of slow walking a trade deal reached with Lee Jae Myung in July. Pentagon official Elbridge Colby commended Seoul’s military readiness amid submarine talks.
INTELLIGENCE. Though described by Colby as a “model ally”, Trump is angrily