Asia shares, yen weather Japan uncertainty as earnings loom
Investors were also hoping for some progress in trade talks ahead of President Donald Trump's August 1 tariff deadline, with U.S. Commerce Secretary Howard Lutnick still confident a deal could be reached with the European Union.
There were reports Trump and Chinese leader Xi Jinping were closer to arranging a meeting, though likely not until October at the earliest.
In Japan, the ruling coalition lost control of the upper house in an election on Sunday, further weakening Prime Minister Shigeru Ishiba's grip on power as a tariff deadline looms.
Ishiba expressed his intention to stay in the position, which along with a market holiday, limited the reaction and the yen was 0.4% firmer at 148.29 to the dollar.
"Ishiba will try to govern with support from some within the opposition, but this likely means a looser fiscal policy and is not good news for bond yields," said Rodrigo Catril, a senior FX strategist at NAB.
"History also suggests that domestic political uncertainty tends to keep the BOJ on the side-lines, so the prospect of rate hikes is now set to be delayed for a little bit longer."
The Bank of Japan still has a bias to raise rates further but markets are pricing little chance of a move until the end of October.
While the Nikkei (.N225), opens new tab was shut, futures traded up at 39,875 and just above the cash close of 39,819.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab was flat, while South Korean stocks (.kS11), opens new tab added 0.4%.
S&P 500 futures and Nasdaq futures both edged up 0.1%, and are already at record highs in anticipation of more solid earnings reports.
A host of companies reporting this week include Alphabet (GOOGL.O), opens new tab and Tesla (TSLA.O), opens new tab, along with IBM (IBM.N), opens new tab.
Investors also expect upbeat news for defence groups RTX (RTX.N), opens new tab, Lockheed Martin (LMT.N), opens new tab and General Dynamics (GD.N), opens new tab. Ramped up government spending across the globe has seen the S&P 500 aerospace and defence sector rise 30% this year.
In bond markets, U.S. Treasury futures held steady having dipped late last week after Federal Reserve Governor Christopher Waller repeated his call for a rate cut this month.
Most of his colleagues, including Chair Jerome Powell, have argued a pause is warranted to judge the true inflationary impact of tariffs and markets imply almost no chance of a move in July. A September cut is put at 61%, rising to 80% for October.
Powell's reticence on rates has drawn the ire of Trump who threatened to fire the Fed chief, before backing down. The spectre of a potential political appointee who would seek to ease policy sharply has investors on edge.
The European Central Bank meets this week and is expected to hold its rates steady at 2.0% following a string of cuts.
"The press conference will likely keep highlighting uncertainty and need to wait for tariff negotiations to conclude before deciding the next step," said analysts at TD Securities in a note. "Similarly, its 'meeting-by-meeting' language would be retained in the release."
The euro was unchanged at $1.1630 in early trading, having dipped 0.5% last week and away from its recent near-four-year top of $1.1830. The dollar index was a fraction lower at 98.40 .
In commodity markets, gold was little changed at $3,348 an ounce with all the recent action in platinum which last week hit its highest since August 2014.
Oil prices were caught between the prospect of increased
supply from OPEC+ and the risk European Union sanctions against Russia for its war in Ukraine could curb its exports.
Brent edged up 0.1% to $69.36 a barrel, while U.S. crude added 0.1% to $67.39 per barrel.
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The Independent
2 minutes ago
- The Independent
FACT FOCUS: Trump claims cashless bail increases crime, but data is inconclusive
As his administration faces mounting pressure to release Justice Department files related the Jeffrey Epstein sex trafficking case, President Donald Trump is highlighting a different criminal justice issue — cashless bail. He suggested in a Truth Social post this week that eliminating cash bail as a condition of pretrial release from jail has led to rising crime in U.S. cities that have enacted these reforms. However, studies have shown no clear link. Here's a closer look at the facts. TRUMP: 'Crime in American Cities started to significantly rise when they went to CASHLESS BAIL. The WORST criminals are flooding our streets and endangering even our great law enforcement officers. It is a complete disaster, and must be ended, IMMEDIATELY!' THE FACTS: Data has not determined the impact of cashless bail on crime rates. But experts say it is incorrect to claim that there is an adverse connection. 'I don't know of any valid studies corroborating the President's claim and would love to know what the Administration offers in support,' said Kellen Funk, a professor at Columbia Law School who studies pretrial procedure and bail bonding. 'In my professional judgment I'd call the claim demonstrably false and inflammatory.' Jeff Clayton, executive director of the American Bail Coalition, the main lobbying arm of the cash bail industry, also pointed to a lack of evidence. 'Studies are inconclusive in terms of whether bail reforms have had an impact on overall crime numbers,' he said. 'This is due to pretrial crime being a small subset of overall crime. It is also difficult to categorize reforms as being 'cashless' or not, i.e., policies where preventative detention is introduced as an alternative to being held on bail.' Different jurisdictions, different laws In 2023, Illinois became the first state to completely eliminate cash bail when the state Supreme Court upheld the constitutionality of the law abolishing it. The move was part of an expansive criminal justice overhaul adopted in 2021 known as the SAFE-T Act. Under the change, a judge decides whether to release the defendant prior to their trial, weighing factors such as their criminal charges, if they could pose any danger to others and if they are considered a flight risk. Loyola University of Chicago's Center for Criminal Justice published a 2024 report on Illinois' new cashless bail policy, one year after it went into effect. It acknowledges that there is not yet enough data to know what impact the law has had on crime, but that crime in Illinois did not increase after its implementation. Violent and property crime declined in some counties. A number of other jurisdictions, including New Jersey, New Mexico and Washington, D.C., have nearly eliminated cash bail or limited its use. Many include exceptions for high-level crimes. Proponents of eliminating cash bail describe it as a penalty on poverty, suggesting that the wealthy can pay their way out of jail to await trial while those with fewer financial resources have to sit it out behind bars. Critics have argued that bail is a time-honored way to ensure defendants released from jail show up for court proceedings. They warn that violent criminals will be released pending trial, giving them license to commit other crimes. A lack of consensus Studies have shown mixed results regarding the impact of cashless bail on crime. Many focus on the recidivism of individual defendants rather than overall crime rates. A 2024 report published by the Brennan Center for Justice saw 'no statistically significant relationship' between bail reform and crime rates. It looked at crime rate data from 2015 through 2021 for 33 cities across the U.S., 22 of which had instituted some type of bail reform. Researchers used a statistical method to determine if crime rates had diverged in those with reforms and those without. Ames Grawert, the report's co-author and senior counsel in the Brennan Center's Justice Program, said this conclusion "holds true for trends in crime overall or specifically violent crime.' Similarly, a 2023 paper published in the American Economic Journal found no evidence that cash bail helps ensure defendants will show up in court or prevents crime among those who are released while awaiting trial. The paper evaluated the impact of a 2018 policy instituted by the Philadelphia's district attorney that instructed prosecutors not to set bail for certain offenses. A 2019 court decree in Harris County, Texas, requires most people charged with a misdemeanor to be released without bail while awaiting trial. The latest report from the monitoring team responsible for tracking the impact of this decision, released in 2024, notes that the number of people arrested for misdemeanors has declined by more than 15% since 2015. The number of those rearrested within one year has similarly declined, with rearrest rates remaining stable in recent years. Asked what data Trump was using to support his claim, the White House pointed to a 2022 report from the district attorney's office in Yolo County, California, that looked at how a temporary cashless bail system implemented across the state to prevent COVID-19 outbreaks in courts and jails impacted recidivism. It found that out of 595 individuals released between April 2020 and May 2021 under this system, 70.6% were arrested again after they were released. A little more than half were rearrested more than once. A more recent paper, published in February by the IZA Institute of Labor Economics, also explored the effects of California's decision to suspend most bail during the COVID-19 pandemic. It reports that implementation of this policy 'caused notable increases in both the likelihood and number of rearrests within 30 days.' However, a return to cash bail did not impact the number of rearrests for any type of offense. The paper acknowledges that other factors, such as societal disruption from the pandemic, could have contributed to the initial increase. Many contributing factors It is difficult to pinpoint specific explanations for why crime rises and falls. The American Bail Coalition's Clayton noted that other policies that have had a negative impact on crime, implemented concurrently with bail reforms, make it 'difficult to isolate or elevate one or more causes over the others.' Paul Heaton, a law professor at the University of Pennsylvania who studies criminal justice interventions, had a similar outlook. 'Certainly there are some policy levers that people look at — the size of the police force and certain policies around sentencing,' he said. 'But there's a lot of variation in crime that I think even criminologists don't necessarily fully understand.'
The Independent
2 minutes ago
- The Independent
Takeaways: US military enters gray area with expanded role at Mexico-US border
President Donald Trump has thrust the military into a central role in deterring illegal crossings into the U.S. at its southern border. The strategy is playing out in Arizona's border community of Nogales, where an Army scout used an optical scope this week to find a man atop the border wall and sounded the alarm. As the man lowered himself toward U.S. soil between coils of concertina wire, shouts rang out and a U.S. Border Patrol SUV sped toward the wall — warning enough to send the man scrambling back over it, disappearing into Mexico. Such sightings of illegal entry are growing rarer and the rate of apprehensions at the border has fallen to a 60-year low. 'Deterrence is actually boring,' 24-year old Army Sgt. Ana Harker-Molina said, voicing the tedium felt by some soldiers over the sporadic sightings during two days in which The Associated Press embedded with the military on the border. Still, Harker-Molina, an immigrant who came from Panama at age 12 and is now a U.S. citizen, said she believes the deployment of U.S. troops discourages crossings by their mere presence. Military mission expands U.S. troop deployments at the border have tripled to 7,600 and include every branch of the military — even as the number of attempted illegal crossings plummets and Trump has authorized funding for an additional 3,000 Border Patrol agents, offering $10,000 signing and retention bonuses. The military's expanded mission is guided from a new command center at a remote Army intelligence training base alongside southern Arizona's Huachuca Mountains. A community hall there has been transformed into a bustling war room of battalion commanders and staff with digital maps pinpointing military camps and movements along the nearly 2,000-mile border. Until now border enforcement had been the domain of civilian law enforcement, with the military only intermittently stepping in. But since April, large swaths of border have been designated militarized zones, empowering U.S. troops to apprehend immigrants and others accused of trespassing on Army, Air Force or Navy bases, and authorizing additional criminal charges that can mean prison time. The two-star general leading the new mission says troops work closely with U.S. Border Patrol agents in high-traffic areas for illegal crossings — and can deploy rapidly to remote, unguarded terrain. 'We don't have a (labor) union, there's no limit on how many hours we can work in a day, how many shifts we can man,' said Army Maj. Gen. Scott Naumann. 'We can fly people into incredibly remote areas now that we see the cartels shifting' course. Stopping the 'got-aways' At Nogales, Army scouts patrolled the border Tuesday in full battle gear — helmet, M5 service rifle, bullet-resistant vest — with the right to use deadly force if attacked under standing military rules integrated into the border mission. Underfoot, smugglers for decades routinely attempted to tunnel into stormwater drains to ferry contraband into the U.S. Naumann's command post oversees an armada of 117 armored Stryker vehicles, more than 35 helicopters and a half-dozen long-distance drones that can survey the border day and night with sensors to pinpoint people wandering the desert. Marine Corps engineers are adding concertina wire to slow crossings, as the Trump administration reboots border wall construction. Naumann said the focus is on stopping 'got-aways' who evade authorities to disappear into the U.S. in a race against the clock that can last seconds in urban areas as people vanish into smuggling vehicles, or several days in the dense wetland thickets of the Rio Grande or the vast desert and mountainous wilderness of Arizona. The rate of apprehensions at the border is slowing down, Naumann acknowledges. But, he says, it would be wrong to let up, that crossings may rebound with the end of scorching summer weather. 'We're having some successes, we are trending positively,' he said of the mission with no fixed end-date. Militarized zones are 'a gray area' The Trump administration is using the military broadly to boost its immigration operations, from guarding federal buildings in Los Angeles against protests over ICE detentions, to assisting Immigration and Customs Enforcement in Florida to plans to hold detained immigrants on military bases. Dan Maurer, a law professor at Ohio Northern University and a retired U.S. Army judge advocate officer, says it's all part of a 'muscular' strategy by Trump to show his political base he is serious about a campaign promise to fix immigration. The results are both norm-breaking and unusual, he said. The militarized zones at the border sidestep the Posse Comitatus Act, an 1878 law that prohibits the military from conducting civilian law enforcement on U.S. soil. 'It's in that gray area, it may be a violation — it may not be. The military's always had the authority to arrest people and detain them on military bases,' said Joshua Kastenberg, a professor at the University of New Mexico School of Law and a former Air Force judge.
Times
2 minutes ago
- Times
Starmer rejects call to follow Macron in recognising Palestinian state
Sir Keir Starmer has rejected a call by more than 130 Labour MPs to follow Emmanuel Macron and formally recognise a Palestinian state amid concerns that the issue would overshadow President Trump's visit to the UK. The French president announced on Thursday that he would formally recognise a Palestinian state at the UN General Assembly in September, increasing pressure on Starmer. Cabinet ministers have privately been urging the prime minister to do the same and on Friday more than a third of his backbenchers signed a letter calling on him to follow suit. The issue threatens to dominate Trump's four-day visit to the UK, which formally begins on Saturday. Marco Rubio, the US Secretary of State, said that Macron's decision was 'reckless' and 'only serves Hamas propaganda and sets back peace'. 'It is a slap in the face to the victims of October 7,' he added. Speaking on Friday before flying to Scotland for a five-day visit, Trump said that Macron's announcement 'doesn't matter'. 'He's a very good guy. I like him, but that statement doesn't carry weight,' he said, adding: 'Here's the good news: What he says doesn't matter. It's not going to change anything.' Starmer's reluctance is likely to deepen divisions within the cabinet, with one member of the government immediately branding the response 'deeply inadequate'. A senior government source said that there were concerns that recognising a Palestinian state while Trump was visiting could derail discussions over a US-UK trade deal. Starmer is meeting Trump at his Turnberry golf course on Monday. In a statement released after talks with Macron, Friedrich Merz, the German chancellor, and Giorgia Meloni, the Italian prime minister, Starmer made clear that he would not bring forward an announcement. Starmer said that while he was 'unequivocal' about recognising a Palestinian state, he would only do so at a time of 'maximum utility to improve the lives of those who are suffering'. It means that the UK will not recognise a Palestinian state until there is a ceasefire with the return of the October 7 hostages, and humanitarian aid is restored to Gaza. Starmer said: 'Alongside our closest allies, I am working on a pathway to peace in the region, focused on the practical solutions that will make a real difference to the lives of those that are suffering in this war. 'That pathway will set out the concrete steps needed to turn the ceasefire, so desperately needed, into a lasting peace. 'Recognition of a Palestinian state has to be one of those steps. I am unequivocal about that. But it must be part of a wider plan which ultimately results in a two-state solution and lasting security for Palestinians and Israelis. This is the way to ensure it is a tool of maximum utility to improve the lives of those who are suffering — which, of course, will always be our ultimate goal.' He said that the scenes in Gaza were 'appalling' and 'unrelenting'. 'The continued captivity of hostages, the starvation and denial of humanitarian aid to the Palestinian people, the increasing violence from extremist settler groups, and Israel's disproportionate military escalation in Gaza are all indefensible,' he said. A total of 136 Labour MPs — equivalent to a third of Starmer's parliamentary party — have signed a cross-party letter calling for Britain to stand up to its 'historic responsibility' and recognise a Palestinian state. The letter was signed by 221 MPs in total. It said: 'Whilst we appreciate the UK does not have it in its power to bring about a free and independent Palestine, UK recognition would have a significant impact due to our historic connections and our membership on the UN Security Council, so we urge you to take this step. 'British recognition of Palestine would be particularly powerful given its role as the author of the Balfour Declaration and the former Mandatory Power in Palestine. Since 1980 we have backed a two-state solution. Such a recognition would give that position substance as well as living up to a historic responsibility we have to the people under that mandate.' • Why Israel can't brush off France's recognition of a Palestine state The letter was organised by Sarah Champion, a Labour MP and chair of the international development select committee. It was signed by 19 select committee chairs in total including the Labour MPs Emily Thornberry, Tan Dhesi, Debbie Abrahams and Florence Eshalomi. Jess Morden, the chair of the Parliamentary Labour Party, was also a signatory. Israel condemned Macron's decision. Binyamin Netanyahu said the announcement 'rewards terror' and warned that a Palestinian state would be a 'launch pad to annihilate Israel'. The Knesset, Israel's parliament, voted to annex the West Bank — a move which would make a Palestinian state impossible. Itamar Ben-Gvir, national security minister and the most outspoken far-right minister in Netanyahu's cabinet, said: 'Complete halt of 'humanitarian' aid. Total occupation of the Strip. Total destruction of Hamas. Encouragement of migration. Settlement. 'This is not the alternative path — this is the royal road to securing the release of the hostages and achieving victory in the war.' • Israel and US pull out of Gaza ceasefire talks with 'selfish' Hamas Sir Jeremy Greenstock, a former British ambassador to the UN, was one of 50 diplomats who signed a letter calling for Starmer to unilaterally recognise a Palestinian state. He said it would go beyond 'rhetoric' and encourage countries in the Middle East to follow suit.
