Daily Briefing · 2026-10-01

S. long-term interest rates rose to the 5.3% level, the highest in about 19 years. Concerns over prolonged inflation have accelerated dollar strength and yen weakness, putting pressure on corporate import costs. On the geopolitical front, President Xi Jinping reaffirmed his strong determination to advance unification with Taiwan. Taiwan-related stocks fell, among other developments, increasing uncertainty for the Asia-Pacific economy. Regarding the Middle East situation, talks between Iran and the United States showed progress on the safety of passage through the Strait of Hormuz, though differences in position remain. Meanwhile, the withdrawal of U.S. forces from Iraq has been completed, and risks of rising crude oil prices have been pointed out amid concerns over destabilization in the Middle East. Russian President Putin has refused to make concessions on Ukrainian territory and has maintained his stance of continuing the military invasion, with the prolongation of sanctions expected to lead to expanding losses for both countries' economies. In the United States, regarding the issue of cost overruns in the renovation of the Federal Reserve headquarters, an oversight body reported that no laws were violated, easing uncertainty over the conduct of monetary policy. Among domestic companies, it was revealed that Nidec posted a deficit of 564.6 billion yen for fiscal year 2025. Meanwhile, business sentiment among large manufacturers improved for the 6th consecutive period, supporting corporate earnings. Toyota is proceeding with a review of its holiday work practices; while labor cost reduction effects are expected, risks of talent outflow have also been pointed out. NTT East and NTT West are raising fixed-line call rates, and the burden of communication costs on households and businesses is expected to increase. In the retail sector, with the closure of the Seibu Shibuya store, a redistribution of sales among commercial facilities in the Shibuya area is expected. In the tourism sector, the number of Chinese tourists visiting Japan during China's National Day holiday is expected to decline compared to previous years, raising concerns about the impact on tourism-related industries. In the aviation industry, a series of Israel-related aviation troubles have occurred, raising concerns about declining industry trust and additional costs. Also, in Thailand, flooding near Bangkok has killed 24 people, and the resulting logistics disruption at the airport is affecting airlines. In the UK, Prime Minister Burnham hinted at considering rejoining the EU, drawing attention to pound exchange rate volatility and the future restructuring of trade relations.