JAPAN: Far-Right Sanseito Rising In Polls Ahead Of Upper House Elections
The far-right populist Sanseito ('Vote Party', DIY) has risen to a new high in the latest Kyodo News opinion poll, coming in joint-third place on the party list vote with 11% support. This excluded non-voters and undecided, who accounted for 45% of the total. If they were included, DIY's support would come in at 5.8%, above the 3.4% achieved in the 2024 general election. The ultranationalist, anti-immigration, anti-COVID restrictions party has recorded a boost in recent opinion polling after a strong performance in the 22 June Tokyo metropolitan election.
- Kyodo News reports, "Amid growing discontent with economic malaise and record-breaking numbers of inbound tourists, Sanseito supporters complain that foreigners receive better treatment than Japanese and the country's culture is changing rapidly. A movement with roots in social media, supporters blend nationalism with a sense of crisis and frustration over their daily lives."
- The party advocates changing the Japanese Constitution to allow for the establishment of a permanent standing army, while also removing the presence of US forces on Japanese territory. It performs well with younger Japanese voters, capitalising on anger with cost-of-living issues.
- The party aims to win six of the 124 House of Councillors seats available in the upcoming election (it currently holds one).
- If the governing conservative Liberal Democratic Party-Komeito coalition loses its majority in the upper house, it would likely seek alliances with other centre-right parties rather than Sanseito. Nevertheless, rising support for an avowedly nationalist party could see the LDP look to ape its policies to win back support.
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AUSSIE 10-YEAR TECHS: (M5) Bear Cycle Remains Intact For Now
- RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 1: 95.960 - High Apr 7
- PRICE: 95.745 @ 14:57 BST May 30
- SUP 1: 95.415/95.300 - Low May 15 / Low Jan 14
- SUP 2: 95.275 - Low Nov 14 (cont) and a key support
- SUP 3: 94.707 - 1.0% 10-dma envelope
Aussie 10-yr futures rallied well on the RBA rate decision last week, reversing a small part of recent weakness. Recent price action pressured prices through to new pullback lows last week. Next support undercuts at 95.420 (pierced), the Feb 13 low, ahead of 95.275, the Nov 14 low and a key support. Clearance of this level would strengthen a bearish condition. To the upside, a recovery of recent losses would shift attention to resistance at 96.207, a Fibonacci retracement point.
US-JAPAN: Trump To Deliver Remarks On Nippon Steel-US Steel Deal Shortly
US President Donald Trump is shortly due to deliver remarks in Pittsburgh, Pennsylvania, where he is expected to endorse Nippon Steel's takeover of US Steel. LIVESTREAM The announcement comes as the US and Japan remain far apart on a new bilateral trade deal.
- Trump said in a Truth Social message on May 23 that the planned partnership "will create at least 70,000 jobs, and add $14 Billion Dollars to the U.S. Economy," over the next 14 months.
- Semafor writes: “The US government will get a “golden share” in US Steel …, with the power to determine who sits on the board and control over production levels. It’s a dramatic provision that could lay out a roadmap for how deals get done in the Trump administration.”
- Japanese Prime Minister Shigeru Ishiba yesterday “expressed determination today to defend rules-based, free and multilateral trade systems and work on expanding the main Asia-Pacific trade group”, per AP.
- Ishiba said: “High tariffs will not bring economic prosperity. A prosperity built on sacrifices by someone or another country will not make a strong economy.”
- AP notes: “His comment comes as Japan’s chief tariff negotiator Ryosei Akazawa travels to Washington, D.C., for a fourth round of talks aiming to convince the U.S. to drop all recent tariff measures. So far Japan has not been successful in gaining U.S. concessions and is reportedly considering purchases of more U.S. farm products and defense equipment as bargaining chips.”
- Ishiba said after a call with Trump yesterday, “[we now] deeper understanding about each other,” but noted to reporters there has been no change to Japan’s position on the tariffs.
MACRO OUTLOOK: MNI US Macro Weekly: Jury’s Still Out On Q2 Downturn
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While the past week may be remembered for court decisions suspending the majority of the White House’s tariffs, it also brought further data evidence that the US economy did not fall off a cliff at the start of Q2.
- Consumer surveys (UMichigan, Conference Board) showed a downtick in consumer inflation expectations and improved sentiment, reflecting the US-China trade de-escalation on May 12.
- And while updated GDP data showed downwardly revised Q1 domestic demand, April personal consumption slowed but remained positive as underlying income growth remained solid.
- Likewise, though core durable goods orders retreated from Q1, a clear dropoff at the start of Q2 was not in full evidence. Regional Fed surveys signaled that activity stabilized in April-May, albeit at relatively weak levels, and labor market data pointed to incremental rather than sharp weakness.
- The point was underlined by the Atlanta Fed's nowcast for Q2 GDP growth which jumped to 3.84% on Friday from 2.18% in its May 27 update. Even if dramatic upgrade was due to a lower trade deficit in April as tariff front-running reversed, final domestic demand is still expected to be robust overall.
- Of course, things can change quickly: note Friday’s apparent re-escalation in US-China trade tensions and the temporary nature of the judicial tariff freeze (which in any case looks to be circumvented by the Trump administration), as well as the July “reciprocal” tariff negotiation deadline continuing to loom large.
- For the moment though, while uncertainty looks to be a constant, the data aren’t (yet) showing the degree of deterioration that had until recently been feared.
- Next week’s data highlights include key checkpoints for May, including ISM Manufacturing and Services surveys (which look likely to show some recovery versus April) and the US Employment report.
- Nonfarm payrolls growth is expected to moderate in May after a surprisingly robust 177k in April, with consensus currently around the 130k mark. The unemployment rate meanwhile is seen holding at 4.2% for what would be a third consecutive month.
