Trump, Takaichi Sign Economic, Security Accords

In Tokyo, President Trump met with Japan’s new Prime Minister Sanae Takaichi in a highly symbolic summit, exchanging gifts—including a putter linked to the late Shinzo Abe, a gold‑leaf golf ball and a Hideki Matsuyama–signed bag—and agreeing on gestures such as donating cherry trees to Washington. The leaders signed twin accords to deepen economic and security cooperation and touted trade and rare‑earths agreements, with Tokyo expected to offer a package of U.S. investments under a previously agreed $550 billion framework. Takaichi pledged an accelerated military buildup, including plans to raise defense spending to roughly 2% of GDP, signaling a strengthened U.S.–Japan alliance. Treasury Secretary Scott Bessent urged that allowing the Bank of Japan sufficient policy space will be key to anchoring inflation expectations and avoiding excess FX volatility as USD/JPY traded around the 151.6–151.9 area. Chief Cabinet Secretary Minoru Kihara said the government expects the BoJ to pursue its 2% inflation target while coordinating closely with Tokyo but leaving policy decisions to the central bank, and analysts noted the BoJ’s March 2024 shift has begun to ease the yen’s weakness.