A handwritten note seen during the Camp David U.S.-Japan-South Korea summit indicated U.S. Treasury officials were considering buying $5 billion to $10 billion worth of Japanese yen. The photo was made public at 11:33 ET, and the dollar fell about 0.8% versus the yen over the next roughly 45 minutes, sliding from 158.9 to 157.6. The disclosure was described as the first U.S. signal of potential unilateral yen intervention since the 2011 G7 coordinated action, stoking expectations for a stronger yen.

Japan Prime Minister Sanae Takaichi said the government will temporarily cut the consumption tax on food and beverages from 8% to 1% for two years starting next April. The move would reduce annual revenue by about ¥5 trillion ($30.6 billion). To keep its pledge of a net-zero overall consumption tax reduction, the government plans a benefits program that would provide ¥600 billion a year to families in need.

A Japanese labor ministry advisory panel recommended raising the nationwide average minimum hourly wage by 4.9% in fiscal 2024 to ¥1,176, the second-largest increase on record. The higher wage floor is expected to be rolled out in stages from October once regional authorities set their own rates. Separately, major unions secured annual pay hikes above 5% for a third straight year. The combination has reinforced market expectations for persistent domestic inflation and a path toward further Bank of Japan rate increases, lending fundamental support to the yen and the Nikkei index.

Germany’s draft budget plans to reduce munitions spending to €9.6 billion in 2027 from €11 billion in 2026, shifting funding toward other defense applications. The change could weigh on Rheinmetall, whose core business is centered on tanks, artillery and ammunition. The company’s shares are down more than 30% this year, reflecting investor concerns about a potential policy-driven pullback and technological substitution.

Japan said medium and heavy rare earth elements accounted for about 54% of the total rare earth content in mud lifted from the deep seabed near Minamitorishima island. Around 50 metric tons of mud were recovered, and the analysis identified elements including yttrium, gadolinium and dysprosium, according to the Cabinet Office’s national platform for innovative ocean development. The effort comes as Japan looks to diversify supplies amid China’s export controls on some heavy rare earths and related magnets introduced in April 2025 and later tightened for Japan. Japan plans a month-long large-scale mining trial starting in February 2027, targeting 350 tons of mud a day, with an industrialization assessment due by March 2028.

The yen fell through ¥163 against the dollar, marking its lowest level since 1986. Markets are focusing on signs that Japanese authorities may be less inclined to intervene, while expectations of fiscal stimulus and a wide Japan-U.S. rate gap—U.S. 3.5–3.75% versus Japan 1%—add to carry-trade pressure. Japan’s $73.6 billion intervention in April and May failed to reverse the slide, and many investors now see ¥165 as the next line for action, though no substantive intervention has appeared.

Australia said it will amend its Modern Slavery Act to introduce criminal liability and civil penalties for companies with annual revenue above AUS$100 million that fail to prevent forced labor and debt bondage in overseas supply chains. The move follows a warning from the U.S. Trade Representative that Australia could face a 12.5% tariff over the issue. About 4,000 Australian companies currently file annual modern slavery statements, and the Australian Federal Police investigated 280 modern slavery and human trafficking reports last year.

Japan’s Liberal Democratic Party has approved Prime Minister Sanae Takaichi’s first set of economic and fiscal policy guidelines, centering on a five-year effort to reshape the country’s defense posture. The blueprint emphasizes reviving the defense industrial base and scaling up mass drone production to support operational resilience in a prolonged conflict. It is framed as a medium- to long-term strategic deployment and does not specify companies, procurement contracts, budget allocations or export controls. As a result, it offers no immediate price-transmission mechanism for traditional financial-market assets.

Nippon Paint has made two recent bids of about $8.6 billion for Akzo Nobel’s decorative paints business, with the latest valuing the unit at €7.5 billion and about 12 times its 2026 EBITDA. Akzo Nobel’s management has not engaged with the approach and has not informed shareholders. The unit accounts for nearly two thirds of Akzo Nobel revenue, largely from Europe, while the company’s planned merger with Axalta remains subject to U.S. FTC approval.