Trump hails a new ‘golden age’ of US-Japan relations

Good morning and welcome back. In today’s newsletter:

• Trump meets Japan’s new prime minister

• Investors pour money into Argentina

• Wall Street stocks’ wild swings

• And why everyone is talking about denim?

US President Donald Trump and Japanese Prime Minister Sanae Takaichi have said they will strive for a “new golden age” for the countries’ alliance in their first meeting.

What was agreed? The leaders signed two agreements. The first called on each government to strengthen the US-Japan security alliance. The second was aimed at securing the supply of critical minerals and rare earths, as well as investing in their mining and processing, as part of a push to reduce reliance on China. Little detail was available on the substance of either deal.

Later aboard the nuclear-powered aircraft carrier George Washington at the US Yokosuka naval base near Tokyo, Takaichi said Japan is committed to “fundamentally” reinforcing its defence capabilities.

Trump said he appreciated that Japan was raising its military capacity “very substantially” and said the country had placed orders for “a very large amount of new military equipment” without providing any details.

Why it matters: The meeting between Trump and Takaichi follows a rocky period for US-Japan relations. Earlier this year Trump imposed tariffs of 25 per cent on Japan — later cut to 15 per cent in return for investment in the US — and the Pentagon put pressure on Tokyo to boost its defence spending to lower the burden on Washington.

In her maiden speech to parliament last week, Takaichi said she would bring forward Japan’s timeline for boosting defence spending to 2 per cent of GDP by at least a year — a move welcomed by the US. Read more on the Trump-Takaichi meeting.

Here’s what else we’re keeping tabs on today:

• US interest rates: The Federal Reserve begins a two-day meeting to decide its next move on interest rates. Policymakers are also expected to discuss the end of a three-year phase of quantitative tightening.

• Earnings: Smithfield Foods, Sysco Corp, Mondelez International, Regeneron, Royal Caribbean, UnitedHealth Group, Visa and PayPal report earnings. Wal-mart de Mexico, Mexico’s largest retailer, reports after the market closes.

• Nvidia: Chief executive Jensen Huang delivers the keynote address at a conference hosted by the chipmaker in Washington DC.

• Hurricane Melissa: Jamaica is braced for the Category 5 storm — the strongest to lash the island since record-keeping began 174 years ago.

The FT is launching a new newsletter dedicated to AI and how it is changing global power. Sign up here to receive the State of AI. One of the writers, John Thornhill, will be appearing in an Ask an Expert session on November 13. Submit your questions here.

Five more top stories

1. Argentina’s currency and government bonds surged yesterday as investors bet that a landslide midterm election victory for Javier Milei’s party has rescued US-backed pro-market reforms and stopped an immediate run on the peso. Here’s more on the post-election surge in the value of Argentine financial assets.

• Milei’s moment: The election victory has handed the libertarian president a rare opportunity to deliver lasting reform to the country’s troubled economy.

• Lex: Once market forces reign, exports should rise, money stashed abroad should return, and Argentina might even be able to return to global capital markets, writes our investment column (for premium subscribers only).

2. Amazon has outlined plans to axe 14,000 jobs across its corporate workforce, as the company looks to cut costs amid rising spending on artificial intelligence. In a message to employees, Beth Galetti, a senior executive at the Seattle-based tech group, said Amazon needed to be “organised more leanly”. Read more on the message sent to employees today.

3. HSBC’s profits declined by 14 per cent in the third quarter as Europe’s largest lender presses ahead with a sweeping restructuring plan. Pre-tax profits fell year on year to $7.3bn in the three months to September 30, with net income, including credit impairments, down to $16.8bn, below analysts’ expectations. Read details of the earnings report here.

• More financial news: PwC has quietly dropped a pledge to increase headcount by 100,000 by the middle of next year, according to its annual report, published today.

4. Apple is set to top $100bn in annual revenues from its services arm for the first time. The unit has doubled in size over the past five years, despite pressure on the App Store. Read why the business has become a vital source of growth.

5. Kirkland & Ellis has given its lawyers training on their communication style as the world’s largest law firm by revenue tries to combat a reputation for uncooperative behaviour in negotiations between its private equity clients and their investors. Read the full report.

The Big Read

After decades of trying to straddle the divide between China and the US, many countries in south-east Asia are finding it harder to manage close ties with both superpowers. But amid Washington’s barrage of tariffs, Asean countries are finding Beijing to be more reliable. Will President Donald Trump push the region towards China?

We’re also reading . . .

• Taiwan: Some foreign-policy thinkers in China are eagerly anticipating an American betrayal of Taiwan, writes Gideon Rachman.

• Trade-off: Bill Gates has called for the UN to make a “major strategic pivot” from a “doomsday view” of climate goals towards funding vaccines.

• The world’s best performing stock market: South Korea’s Kospi has gained more than 66% this year. Here’s why.

• Lessons from success: Youth inactivity is a problem in the UK but some countries are getting it right, argues Sarah O’Connor. Sign up for Sarah’s new newsletter, The AI Shift, on how AI is impacting the labour market here.

Chart of the day

Daily share price swings worth hundreds of billions of dollars are becoming commonplace on Wall Street. Individual stocks have gained or lost more than $100bn in market value in a single day 119 times so far this year, the highest annual total on record. The rise of 12-figure stock swings partly reflects the huge size of companies such as Nvidia, Microsoft and Apple, but also growing stock market volatility.

Take a break from the news . . . 

Jeans aren’t exactly new. But this year they have hit the headlines thanks to viral ad campaigns, red-carpet appearances and a renewed popularity with shoppers. The comeback is reeling in serious money.