GLOBAL ENERGY: First Message from Iran's New Supreme Leader Within Minutes

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Speaking in the Armenian capital Yerevan, US Vice President JD Vance says that it is "very early in the Greenland talks". Vance says it is "just very simple, Greenland is very important to the national security of the US. I do think that some of our allies have underinvested in Arctic security." 

• Adds "...if we're going to invest in Arctic security, if we're going to basically pay a lot of money and be on the hook for protecting this massive land mass, I think it's only reasonable for the United States to get some benefit out of that, and that's going to be the focus of negotiations here over the next few months."
• Vance's comments come days after initial diplomatic discussions between Greenlandic, Danish and US officials. Greenlandic Foreign Minister Vivian Motzfeldt said on 7 Feb that “We are not where we want to be yet,” adding “There is going to be a long track, so where we’re going to land at the end, it’s too early to say.” Danish Foreign Minister Lars Lokke Rasmussen echoed this, saying while talks have progressed, “We are not out of the crisis, and we do not have a solution yet”.
• The initial prospect of the US unilaterally annexing Greenland, which appeared as a potential option on the table in January, has seemingly receded. Nevertheless, the strong opposition in Nuuk, Copenhagen, and other European capitals to any formal ceding of land to the US remains a flashpoint that President Trump could re-ignite at any time. 

• Japanese assets have firmed on Tuesday, bolstered by comments from Finance Minister Katayama, who appears to have successfully calmed the markets on the timing and financing of the sales tax cut. Katayama said that PM Sanae Takaichi has made it clear that the tax cut is strictly limited to two years, will not rely on debt issuance and will apply only to food and beverages.
• Stabilisation across the JGB curve has facilitated an extension of the Japanese yen rebound, with the USDJPY pullback from yesterday’s post-election high briefly reaching 1.72% at today’s 155.05 low. Price action increasingly blurs the technical picture, as spot is cleanly below through the 50-day EMA which may bolster the short-term bearish outlook. The 100-day MA intersects at 154.52.
• While the broader dollar weakness may have played its part in exacerbating the USDJPY price action, analysts have noted that the next meaningful leg lower might require a BOJ tightening impulse. We pointed out last week that JP Morgan read the latest BOJ minutes as hawkish, and that with some political stability post-election they believed the BOJ could hike in March, which could also lead to some shift in local flow dynamics.
• A BOJ rate hike in March remains feasible as real interest rates remain low and the risk of falling behind the curve persists, former BOJ chief economist Toshitaka Sekine told MNI on Friday. Furthermore, PM Takaichi has been taking market concerns over inflation and fiscal sustainability seriously and will not interfere with the BOJ’s gradual policy tightening from the current 0.75%, MNI understands.