Japanese and Chinese Economies Move in Opposite Directions

Japan’s economy shows signs of further strength

Highlights

• Japan’s economy shows signs of further strength

• China’s growth momentum weakens as tariffs bite

• Trump administration increasingly using firm-level industrial policy

• Service sector inflation pressure may become a concern for the Fed

Key Takeaways

• Industrial Policy Is the New Normal: In the overnight trade, U.S. equity futures are bid in the wake of this latest leg of the government’s new industrial strategy, which is to reportedly buy a stake in Intel (after the S&P 500 just eked out its 18th record daily close of the year). Revenue sharing in select export industries one day, partnering with companies the next. This is not your father’s Republican Party.