JAPAN: Kyodo-Draft Defence White Paper: Sino-Russian Links A 'Grave Concern'

May-09 11:11

(MNI) London - Kyodo News reports that a draft of the 2025 Defence White Paper, due to be presented to the cabinet as early as July, "criticises the strengthening of cooperation between China and Russia, including military activities, as "a grave concern for our national security." It points out that China and Russia are strengthening their capabilities to hinder other countries' use of space, and that there is a possibility that nations and militaries are involved in cyber attacks.

  • Regarding Japan's security environment, Kyodo reports the draft claiming that "We are facing the greatest challenge since the end of [WWII] and have entered a new era of crisis," The article claims the draft white paper calls China's activities in East Asia "the biggest strategic challenge [Japan has] ever seen,"
  • The article claims the draft highlights the risk posed by Sino-Russian cooperation, with Russia's "latest equipment is being deployed in the Far East as well", while Russian planes violate Japanese airspace and its troops continue to "occupy" the Northern Territories (known in Russia as the Kuril Islands).
  • Prior to coming to office, PM Shigeru Ishiba had advocated for Japan to take a more prominent role in Indo-Pacific security. US President Donald Trump's demands that all of its allies increase defence expenditure to lift the burden on the US is likely to ensure Japan continues to ramp up military spending over the coming years. 

Historical bullets

US TSYS: Tsys Briefly Pare Losses, Remain Weaker After China Tariff Retaliation

Apr-09 11:11
  • Treasury futures pared down move briefly after China tariff response with 84% duty on US imports, up from 34%.
  • June'25 10Y futures tapped 111-00.5 currently trades 110-20.5 (-26.5), 10Y yield 4.3898 +.0969. Curves bear steepen to new multi-year highs overnight: 2s10s currently +6.369 at 62.482 after tapping 73.84 during Asia hours.
  • Stocks come back under pressure: SPX eminis -81.75 at 4938.25.

CHINA: China Raises Tariffs on US Goods, Sinking Sentiment

Apr-09 11:07

China's MoF formally hike tariffs on US goods, raising tariffs on US goods to 84%, and adding more US firms to China's unreliable list, and the export control list. 

Equities slip on that China tariff raise - we knew Chinese leadership were set to meet to discuss capital markets, but it wasn't necessarily expected it would result in a tariff raise to 84% on US goods.

  • USD/CNH rallies, while equity weakness presses the e-mini S&P back through 5,000. The impact on US 10y yield more contained - back to 4.386% at typing.

MNI: US MBA: MARKET COMPOSITE +20.0% SA THRU APR 04 WK

Apr-09 11:00
  • MNI: US MBA: MARKET COMPOSITE +20.0% SA THRU APR 04 WK