Key Takeaways
- A "massive" trade deal between the U.S. and Japan has been completed, featuring reciprocal 15% tariffs, Japan's commitment to increase U.S. rice imports, and a substantial $550 billion Japanese investment in the U.S.
- The U.S. Financial Industry Regulatory Authority (FINRA) is investigating Morgan Stanley (MS) regarding its client vetting processes for money-laundering risks, specifically focusing on enhanced due diligence and ongoing monitoring from October 2021 to September 2024.
- Alibaba (BABA) has unveiled Qwen3-Coder, an open-source artificial intelligence (AI) model touted as its "most advanced yet" and designed for high-performance software development.
- The U.S. National Nuclear Security Administration (NNSA) was confirmed as a victim of a major cyberattack that exploited flaws in Microsoft's (MSFT) on-premises SharePoint Server, with Chinese hacking groups identified as being behind the attacks.
- President Trump also finalized trade agreements with the Philippines and Indonesia, establishing a 19% tariff rate on their imports to the U.S. while securing significant market access and reduced non-tariff barriers for American exports.
The global economic landscape is undergoing significant shifts following President Trump's announcement of a "massive" trade deal between the United States and Japan. The agreement includes reciprocal 15% tariffs on imports between the two nations. As part of the deal, Japan will uphold a "minimum access" framework for rice imports while increasing its imports of U.S. rice under the new trade terms. Furthermore, Japan is set to invest a substantial $550 billion in the U.S. and form a joint venture for LNG in Alaska. This development has been perceived as a welcome positive surprise for investors, offering optimism amid Japan’s recent political uncertainty. Following the announcement, Japan's Nikkei index surged over 2%, and Japanese automaker shares also saw significant gains. Conversely, JGB Futures dropped, and the Yen briefly spiked 0.3% against the dollar before paring gains. South Korea's Industry Minister stated that Seoul is closely examining the U.S.-Japan agreement.
In the financial sector, Morgan Stanley (MS) is currently under investigation by the U.S. Financial Industry Regulatory Authority (FINRA). The probe aims to determine whether the firm adequately vetted its wealth-management clients for money-laundering risks, with a specific focus on the sufficiency of enhanced due diligence and ongoing monitoring practices from October 2021 to September 2024.
Meanwhile, the technology giant Alibaba (BABA) has made a significant announcement, unveiling Qwen3-Coder, its new open-source AI model. The company describes Qwen3-Coder as its "most advanced AI model yet," specifically built for high-performance software development.
Cybersecurity remains a critical concern, as the U.S. National Nuclear Security Administration (NNSA), the federal agency overseeing the nation’s nuclear weapons arsenal, was confirmed among the victims of a major cyberattack. The attack exploited flaws in Microsoft's (MSFT) on-premises SharePoint Server, with Chinese hacking groups identified as being responsible. Separately, Apple (AAPL) has alerted Iranians to sophisticated iPhone spyware attacks, which researchers estimate cost "millions of dollars".
Beyond the Japan deal, President Trump has also secured other trade victories. He agreed to a 19% tariff rate on Philippine imports, with the Philippines agreeing to open its market to U.S. goods with zero tariffs, including automobiles. Similarly, Indonesia has agreed to drop non-tariff barriers and reduce tariffs on its imports to the U.S. to 19%, while the U.S. will eliminate 99% of tariffs on its exports to Indonesia. Indonesia is also expected to supply critical minerals and sign deals worth tens of billions of dollars for Boeing aircraft, American farm products, and U.S. energy. Trump also indicated that he is advocating for Big Tech in global trade talks. However, Washington China hawks have criticized the U.S. approval of Nvidia's (NVDA) H20 chip sales to China.
In other market news, the 5-Year JGB Yield rose 9 basis points to 1.11%, and the 2-Year JGB Yield climbed 6 basis points to 0.81%. The Taiwan Overnight Interbank Rate opened at 0.805%, remaining unchanged from the previous session. The increasing demand for AI is driving up electricity supply costs in the largest U.S. market to a record high. In Hong Kong, regulatory changes and other measures are fueling growth in IPOs, and Citigroup (C) is exploring stablecoins as regulations evolve in both Hong Kong and the U.S. Geopolitically, protests have erupted in Kiev against Ukrainian President Zelensky over a new law impacting anti-corruption agencies, and Moscow reported that two Russian soldiers needing medical care were returned by Ukraine. A sanctioned German China expert's visit to Beijing signals a potential easing of restrictions. The Australia Westpac Leading Index (M/M) for June registered -0.03%.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.