Oil breaks US$100, Wall Street retreats and bond yields rise, inflation is becoming the market’s biggest risk again Global markets are starting Thursday in a more defensive position. Brent crude has broken above US$100 a barrel , U.S. Treasury yields are pushing higher, and Wall Street fell for a third straight session as investors reassess whether central banks may need to keep tightening rather than easing. For Malaysian investors, the key chain today is increasingly clear: Oil → inflation → interest rates → bond yields → USD/MYR → Bursa valuations. 30-second market snapshot Market / Asset Latest 🇺🇸 S&P 500 7,636.36, -0.48% 🇺🇸 Dow Jones 52,380.66, -0.77% 🇺🇸 Nasdaq 26,253.34, -0.64% 🇲🇾 FBM KLCI 1,714.34, virtually flat 💵 USD/MYR ~4.06 🇺🇸 U.S. 10Y Treasury ~4.84% 🇺🇸 U.S. 2Y Treasury ~4.42% 🥇 Gold ~US$4,396/oz 🛢️ Brent crude US$101.21/bbl 🛢️ WTI crude US$96.05/bbl ₿ Bitcoin ~US$79,300 🇯🇵 Nikkei ~64,760, -0.6% this morning Brent jumped about 3.4% Wednesda...
Japan is preparing to reopen trade negotiations with the United States under President-elect Donald Trump, with a focus on eliminating tariffs on automobiles and auto parts, according to Japanese Foreign Minister Takeshi Iwaya.
Key Points:
- Tariff Negotiations in Focus: Iwaya confirmed in parliament that the U.S.-Japan Trade Agreement from Trump’s first term included provisions to revisit auto tariff eliminations. These items were listed in an annex for future negotiations.
- Economic Stakes: The U.S. was Japan's largest export destination in 2023, with cars and auto parts accounting for one-third of Japan’s total shipments to the U.S., according to Japan’s Finance Ministry.
- Protectionist Concerns: Trump has proposed additional tariffs of 10%-20% on all imported goods, including those from Japan. This has raised concerns in Tokyo about the potential impact on its export-driven economy.
Strategic Preparations:
- Government Strategy: "We must carefully gather and analyze information on the new administration’s trade policy to prepare our approach," said Iwaya.
- Leadership Engagement: Prime Minister Shigeru Ishiba is working to establish dialogue with Trump. Ishiba had attempted to meet Trump following his election victory but was informed that such meetings would only take place after the January 20 inauguration.
Historical Context:
- Abe’s Legacy: Analysts highlight the importance of the close relationship between Trump and the late Prime Minister Shinzo Abe in maintaining stable trade and diplomatic ties during Trump’s first term. The current administration aims to replicate that dynamic to protect Japan's economic interests.
As the U.S. transitions to a new administration, Japan’s efforts to address potential trade challenges underscore the importance of its economic relationship with the United States, particularly for its vital auto industry.
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