Key Takeaways
- US business confidence in China has rebounded from record lows, with 95% of US companies now viewing their China operations as critical to global competitiveness.
- Gulf Development and Singtel (Z74) have formed a strategic partnership to build a new submarine cable connecting Thailand and Singapore to meet surging AI-driven data demand.
- Japanese investors made their largest shift toward overseas equities in five months, pouring ¥1.3 trillion ($8.45 billion) into foreign shares while cutting bond holdings.
- Trump’s top advisers have privately warned that the U.S.-Iran war could last through the end of his term in 2029, contradicting the President's public claims of an immediate resolution.
- Japan's 10-year government bond yield hit 3% for the first time in three decades, signaling a structural shift that may reduce Japanese support for U.S. Treasuries.
US-China Commercial Relations Show Resilience
American business sentiment in China is seeing a notable recovery from previous record lows. According to the latest US-China Business Council member survey, a resounding 95% of respondents stated that their China operations are essential for maintaining global competitiveness. While geopolitical tensions and tariffs continue to impact roughly 72% of firms, the narrative has shifted toward adaptation and selective investment rather than a broad decoupling.
Companies are increasingly using lessons learned in the Chinese market to fund and inform their global expansion. Despite the ongoing trade truce, many firms report that U.S. export controls are creating a perception of American suppliers as "unreliable," leading some to seek alternative supply chain routes. Nevertheless, the scale and speed-to-market offered by China remain unparalleled for major U.S. multinationals.
Regional Connectivity: Gulf Development and Singtel Partnership
In a move to bolster Southeast Asia's digital backbone, Gulf Development and Singtel (Z74) have entered a strategic partnership to develop a new submarine cable link between Thailand and Singapore. This project is designed to address the explosive growth in cross-border data traffic, largely driven by the regional AI boom and the expansion of hyperscale data centers.
The partnership follows Singtel's recent "capital recycling" initiative, where it sold a 2.8% stake in Gulf Development for approximately S$1 billion ($773 million). Despite the divestment, Singtel maintains a 4.95% stake in the Thai energy giant and continues to collaborate on major infrastructure projects, including the GSA data center venture.
Japan Security Flows: A Rotation into Equities
Fresh data from the Ministry of Finance reveals a significant shift in Japanese investment patterns for the period ending September 4, 2026. Japanese investors became net buyers of foreign stocks, pouring in ¥1.3 trillion, the highest level since March. Conversely, they reduced their exposure to foreign bonds, selling a net ¥111.9 billion as global yields rose and domestic debt became more attractive.
Foreign investors also showed strong interest in the Japanese market, purchasing ¥690 billion in Japanese stocks. This comes as the Nikkei 225 index climbed above 65,600, supported by a rebound in technology and AI-related shares like SoftBank Group (SFTBY) and Fujikura. The strengthening yen and rising domestic yields are forcing a recalibration of the "carry trade," with investors closely watching the Bank of Japan’s next moves.
Geopolitical Risks: Prolonged Conflict in the Middle East
Internal reports from the White House suggest a growing divide between President Trump’s public optimism and his advisers' private assessments of the Iran conflict. While Trump has publicly stated the war would end "immediately" after the November midterms, top advisers—including Vice President JD Vance and Secretary of State Marco Rubio—have warned that Tehran's resistance could prolong the war through 2029.
This potential for a long-term conflict has kept a structural risk premium on Brent crude oil, which recently touched $120 per barrel. Market analysts suggest that traders are increasingly discounting the President's timeline in favor of a "long-term economic siege" base case. The conflict continues to weigh on global risk sentiment, contributing to inflationary pressures and complicating the path for central bank rate cuts.
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.