The strength and stability of the U.S.-Japan economic alliance and relationship is one of those givens that the world takes for granted, particularly during President Trump’s first term in office - when practically every sovereign nation or economic bloc, ally of the U.S. or adversary, had to rethink their own respective relationship and standing with the world’s largest economy, as well as with one another, Japan’s American alliance wasn’t tested, but reinforced.
And while Japan’s economic and commercial ties were also disrupted from business as usual, Japan emerged as the last remaining anchor of stability among the world’s major democracies in an otherwise turbulent era - thanks to then-Prime Minister Shinzo Abe, who pioneered the art of Trading Trump: the proactive personal relationship building that manifested into favorable (or, prevented harmful) economic aggression out of the US - a practice that is now being replicated (or attempted to) by global heads of state, corporate leaders, and anyone else who is attempting to hedge their Trump exposure.
Abe’s impact, or volatility dampening effect, wasn’t just consequential to Japan, but the world, and really no different in concept (and timing) with Japan as the last remaining anchor of easy monetary policy - we may not know what the exact impact on global sovereign bond yields that BOJ’s endless JGB buying and yield curve capping had, but the answer is certainly not “zero impact.”
While it isn’t possible to quantify Abe’s impact, much less envision the counterfactual of a first-term President Trump absent Japan PM Shinzo Abe in his ear, we may be about to find out as Trump returns to the White House, and Abe is now replaced with fractured politics and disarray on Japan’s side.
Last time, market volatility and daily, headline driven swings were occurring from the Trump administration vs Beijing, as Tokyo tried to contain as much as possible, as the first, second and third largest economies respectively. This time, Tokyo is leaderless, and ill equipped, and the world may find out that the world within Trump 2.0 will be nothing like Trump 1.0.
This video topic ended up being very long, and therefore is split into three separate releases:
Overview of the PM Shinzo Abe and President Trump relationship.
The US and Japan administration and cabinet members network, and the disaster of current Prime Minister Ishiba.
(Now newly added) Trump’s US Treasury Secretary pick Scott Bessent and Japan.
If you haven’t seen the others from this Trading Trump series:
Thanks as always,
Weston
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