US President Donald Trump threatened Japan with tariffs of up to 35% as he ramped up tensions for a third straight day, fueling fears of worst-case scenario among investors and raising doubts over Tokyo’s tactics in trade talks.

Japan should be forced to “pay 30%, 35% or whatever the number is that we determine, because we also have a very big trade deficit with Japan,” Trump said, again flagging the possibility that across-the-board tariffs could go much higher than the 24% initially penciled in for July 9. “I’m not sure we’re going to make a deal. I doubt it with Japan, they’re very tough. You have to understand, they’re very spoiled.” 

Investors and analysts warned against taking Trump’s comments at face value and suggested that some kind of deal will eventually get done. But they also warned that Prime Minister Shigeru Ishiba’s government may need to change tack from a friendly and firm stance that is now leading the two sides to brinkmanship.

“The ball is in Japan’s court now, and if Tokyo hesitates, it’s all over,” said Chihiro Ota, senior strategist at SMBC Nikko Securities. —Balázs Penz

What You Need to Know Today

The suspension of Thai Prime Minister Paetongtarn Shinawatra is raising fresh doubts about the country’s economy and the future of a dynasty that has loomed over the Southeast Asian nation for decades. The developments couldn’t come at a worse time for Thailand: Once feted as an “Asian Tiger” economy, the country is mired in slow growth relative to its peers, with households burdened by debt, a budget bill pending and the imminent threat of Trump’s tariffs. Investors remain wary about the country’s prospects and market outlook as the latest upheaval adds to risk-off sentiment in the world’s worst-performing benchmark this year.

Paetongtarn in Bangkok on Tuesday. Photographer: Valeria Mongelli/Bloomberg

China faces growing calls from policy advisers and economists to explore using stablecoins for cross-border payments, as the US moves to entrench the dollar’s dominance through the still-emerging technology. While China hasn’t formally embraced stablecoins — digital tokens pegged to traditional currencies — and maintains a sweeping ban on crypto activities, recent remarks from senior central bank officials have given fresh momentum to discussions about their potential role in global payments.

The Trump administration is halting the transfer of artillery rounds and air defenses to Ukraine, depriving the country of much-needed weapons as it endures stepped-up missile and drone attacks from Russia. The White House confirmed a Politico report on the stoppage, which said the move came after a review of US munitions stockpiles and amid concerns they had fallen too low. Among the weapons that are being paused are 155mm artillery shells, Stinger shoulder-fired missiles, Patriots and Hellfire missiles, PBS Newshour’s Nick Schifrin reported. 

Hong Kong’s de facto central bank ramped up purchases of the local currency as it sought to defend a peg that has been strained by volatility in the greenback. The Hong Kong Monetary Authority bought HK$20.02 billion ($2.6 billion) of it after indicative pricing suggested the local dollar touched the weak end of its permitted trading range in late New York trading. That’s more than double the HK$9.42 billion it purchased last week.

Clouds over Hong Kong. Photographer: Paul Yeung/Bloomberg

SoftBank’s $6.5 billion acquisition of semiconductor designer Ampere Computing is facing a potentially lengthy probe by the US government. The Federal Trade Commission, one of two regulators charged with reviewing deals, has opened an in-depth investigation of the takeover, known formally as a second request for information about the transaction, according to people familiar with the matter. Only a small portion of deals face such follow-up requests. In some instances, investigations can last for a year or more and are a precursor to a lawsuit to block the deal.

The third season of the blockbuster Netflix series Squid Game racked up record viewership in its first three days, reinforcing the Korean survival drama’s status as a global cultural phenomenon. The final season of the dystopian thriller logged more than 60 million views in its first three days and ranked No. 1 across all 93 countries with top 10 rankings, according to Netflix. That compares with the debut of the previous season, which drew 68 million views in the first four days.

Lee Jung-jae in Squid Game 3. Source: Netflix

Global investors poured almost $3 billion into Korean equities in May and June, propelling the country’s benchmark index up about 28% in the first half of the year, trailing only Slovenia’s blue-chip index, a gauge of Zambian equities and a basket of 20 Polish stocks. It’s a dramatic turnaround for a place that’s undergone huge political and economic turmoil: a declaration of martial law, a presidential impeachment and removal from office, and Trump’s 10% tariffs that threaten export juggernauts such as Hyundai, LG and Samsung.

What You’ll Need to Know Tomorrow

For Your Commute

Four years after making a series of fateful trades that upended his life, tarnished his reputation and left him working alone in a smoky cafe in Tokyo, Takushi Sawada decided to tell the world his side of the story.

Nomura had fired the former managing director in September 2024 after regulators determined that he engaged in spoofing three years earlier, placing large orders in the futures market for Japanese government bonds only to quickly cancel them. The brokerage had admitted to market manipulation and paid a ¥21.8 million ($150,000) fine. The company also lost its special entitlements as a primary dealer at government debt auctions for about a month last year. 

Writing under a pseudonym on the Japanese blogging site Note and without ever mentioning Nomura by name, Sawada outlined his position, namely that he hadn’t done anything wrong.

Illustration: Carolina Moscoso

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