- On Friday, U.S. President Donald Trump spoke with Japanese Prime Minister Sanae Takaichi on Air Force One during his return trip, providing a detailed briefing on his recently concluded visit to China. The market is highly vigilant about the impact of easing U.S.-China relations on the East Asian security premium.
- The delegation accompanying Trump on his visit to China included 17 U.S. business executives with assets totaling over 168 trillion yen, a figure that significantly surpasses Japan's national budget of approximately 122 trillion yen for the 2026 fiscal year, highlighting the substantial influence of American tech giants and Wall Street in the U.S.-China dynamics.
- The yen (JPY) exchange rate and the ten-year government bond yield have remained stable in the short term, but concerns in Japanese academia about "Kissinger-style Over-the-head Diplomacy" are intensifying, with the market beginning to factor in the potential revaluation of Japan's geopolitical strategic value.
Sanae Takaichi Reaffirms Alliance Stability Japanese Prime Minister Sanae Takaichi stated to the media after the call that both sides had a deep exchange of views on economic security and the Indo-Pacific situation, and confirmed plans for a face-to-face meeting at the G7 summit next month. Cabinet Secretary Minoru Kihara emphasized that the Japanese government is comprehensively gathering information on U.S.-China interactions to assess their marginal impact on the semiconductor supply chain and access to rare earth resources. Although Sanae Takaichi is known for her hawkish stance, the timing of this call is seen externally as a "post-event briefing," raising concerns about Japan's diplomatic passivity.
Strategic Pressure Reflected in Asset Scale Disparity Analysis by Asahi TV pointed out that the U.S. delegation's asset scale of 168 trillion yen is not only a display of economic power but also a core bargaining chip for Trump at the negotiation table. Kohei Saito, an associate professor at the University of Tokyo, believes that such a scale of economic linkage indicates that the core U.S. industries cannot substantially decouple from the Chinese market, and even if the Japanese government mobilizes Toyota (7203:JP) and Sony (6758:JP), it would be difficult to balance at the same level. If the U.S. and China reach certain exclusive agreements on trade conditions, Japan's export competitiveness may face reevaluation.
Repricing of Geopolitical Marginal Risks Tetsuo Kotani, a professor at Meikai University, issued a warning that if Washington places the stability of U.S.-China relations above regional alliance interests, Japan may face the risk of reduced U.S. support when handling future Japan-China bilateral disputes. This "marginalization" risk could prompt Japan to further increase its autonomous defense spending in subsequent budgets for the 2026 fiscal year, thereby exerting sustained upward pressure on long-term interest rates.
