Recap | 9 February 2026
- 2 days ago
- 10 min read
Japan’s Takaichi secures mandate for conservative platform in election rout with tax cuts and defense spending in mind
US warns on Strait of Hormuz as Iran holds firm on enrichment ahead of White House meeting with Israel’s Netanyahu
Ukraine points to US-imposed June deadline for peace agreement with Russia; EU membership eyed
Secretary Rubio to attend Munich Security Conference amid NATO shuffle
Lifted by capital expenditure plans and limited supply, chipmakers bolster equities; commodities and crypto settle
New York Fed Survey of Consumer Expectations shows improved near-term inflation and employment outlooks
Bloomberg: China cautions on US Treasury holdings in light of market volatility, risks
Hong Kong publisher and activist Jimmy Lai sentenced under National Security Law
Thailand’s ruling party prevails in weekend elections; Portugal rebuffs far-right challenge
Israel paves way for West Bank settlements ahead of Board of Peace meeting
Confronted with US oil blockade, Cuba loses power and fuel
Administration targets environmental rollbacks to cut regulation and judicial guidance
'Addictive’ social media platforms face bellwether trial in California
Reuters investigations highlight risks of AI in medicine and healthcare
EDWARD VON DER SCHMIDT
Headlines
Japan’s Takaichi secures mandate for conservative platform in election rout with tax cuts and defense spending in mind
Prime Minister Sanae Takaichi’s Liberal Democratic Party (LDP) convincingly won Sunday’s elections in Japan. Together with the Japan Innovation Party, the ruling coalition garnered a parliamentary supermajority in the Diet’s lower house. The landslide victory will allow PM Takaichi to pursue legislative objectives with little resistance.
The popular prime minister has been vocal about national interests - defense in particular - and drew a rebuke from China in the fall concerning remarks about Taiwan. She has also pledged to cut consumption taxes in order to stimulate growth.
Japan’s bond markets and the yen had weakened this year in anticipation of additional government spending to accommodate these initiatives. As Japanese stocks rallied, however, a pledge from PM Takaichi on Monday calmed fiscal fears.
Comment:
Japan is a member of the Quadrilateral Security Dialogue or “the Quad”, a diplomatic arrangement with the US, India, and Australia “committed to fostering a free and open Indo-Pacific” (US Department of State). PM Takaichi has emphasized the importance of US security ties.
Sources:
Japanese Prime Minister Takaichi looks to translate her election gains into a new conservative shift (AP)
What to know about Takaichi’s conservative policies after big election win (AP)
Landslide election win clears path for Japan’s Takaichi to deliver tax cuts (Reuters)
Japan stocks soar, super-long bonds steady in nod to Takaichi’s ‘responsible’ stimulus (Reuters)
Japan PM’s big election win could mean more beef with Beijing (Reuters)
Japan’s Takaichi Scores Landslide Win in Election Gamble (WSJ; 2/8)
Supermajority Gives Japan’s Takaichi Strong Hand at Home and Abroad (WSJ)
US warns on Strait of Hormuz as Iran holds firm on enrichment ahead of White House meeting with Israel’s Netanyahu
Following Friday’s mediated discussions in Muscat and comments from Iranian officials publicly committed to nuclear enrichment, the US issued a warning for vessels passing through the Strait of Hormuz. A critical shipping corridor for oil, the strait connects the Persian Gulf to the Gulf of Oman, which leads out to the Arabian Sea.
The US is opposed to Iran’s domestic enrichment and would also like to curtail the country’s ballistic missile program and support for regional proxies such as Hezbollah in Lebanon, Houthis in Yemen, and Hamas. Israel is particularly keen to limit Iran’s military capabilities and will raise its strategic interests in a White House meeting between President Trump and PM Netanyahu on Wednesday.
The US has accumulated military assets in the region with Iran pledging to retaliate against neighboring bases in the event of an attack.
Sources:
Trump turns to military leaders for diplomatic efforts on Iran and Ukraine (AP; 2/7)
*Israel’s Netanyahu is meeting with Trump this week to push for a far broader Iran deal (AP)
Crackdown on dissent after nationwide protests in Iran widens to ensnare reformist figures (AP; 2/8)
Iran insists on right to enrichment, ready for confidence building (Reuters; 2/8)
Iran says it could dilute enriched uranium if all sanctions are lifted (Reuters)
US issues fresh guidance to vessels transiting Strait of Hormuz as Iran tensions simmer (Reuters)
US Tells American Ships to Keep Away From Iran Amid Tensions (Bloomberg)
Iran Threatens Missile Attacks, Hoping Trump Sees Strength Not Weakness (WSJ; 2/8)
Ukraine points to US-imposed June deadline for peace agreement with Russia; EU membership eyed
Ukraine’s President Zelenskyy indicated that the US communicated a June deadline to reach a peace accord with Russia. He suggested that the US would apply additional pressure to both countries in order to compel a deal. US diplomatic relations with Russia have soured somewhat in the absence of progress toward peace.
Territorial disputes centered on Donetsk and Zaporizhzhia remain at an impasse. Ukraine has argued for freezing current battle lines while Russia has insisted on full control of the Donbas.
The nature of post-war security guarantees is also contentious. Russia has demanded a demilitarized Ukraine and threatened that any NATO forces deployed in the country would represent legitimate military targets. The EU is reportedly exploring viable paths for Ukrainian accession to the bloc (Bloomberg).
Ukraine’s dwindling air defenses have left its power infrastructure and civilian centers vulnerable to Russian missile and drone attacks, intensifying leadership’s desire to broker a ceasefire.
Sources:
US gave Ukraine and Russia a June deadline to reach agreement to end war, Zelenskyy says (AP; 2/7)
‘Only Trump can stop the war’: Ukraine’s foreign minister calls for acceleration of peace talks (Reuters; 2/8)
Ukraine opens up arms exports, seeking to cash in on wartime technology (Reuters)
Russia’s Lavrov sees no ‘bright future’ for economic ties with U.S. (Reuters)
EU is Readying Options to Give Ukraine Gradual Membership Rights (Bloomberg)
Secretary Rubio to attend Munich Security Conference amid NATO shuffle
Secretary of State Rubio will join a host of foreign leaders and officials at the annual Munich Security Conference beginning Friday. The gathering follows in the wake of tensions among NATO allies concerning trade policies, defense obligations, and Greenland.
Separately, NATO is expected to conduct security exercises in the Arctic as the US and Europe reportedly plan an exchange of command and operational control.
Sources:
Rubio to attend Munich Security Conference amid frayed Transatlantic ties (Reuters)
NATO expected to launch Arctic security mission in coming days (Reuters)
US to turn over two NATO command posts to Europeans, military source says (La Lettre and Politico via Reuters)
Rubio Heading to Munich for Security Forum After Greenland Alarm (Bloomberg)
Markets & Economies
Lifted by capital expenditure plans and limited supply, chipmakers bolster equities; commodities and crypto settle
While precious metals and the cryptocurrency complex found a measure of stability, chipmakers continued to lift broader equity indices even as consensus AI trades splintered.
Comment:
Memory and storage supply shortages on account of insatiable AI demand may be a boon for chip manufacturers but risk impairing other industries who rely on those inputs.
Sources:
US stocks drift higher as gold, silver and bitcoin stabilize (AP)
Wall Street advances as tech bounces further off of recent losses (Reuters)
US software stocks tumble sparks concerns that AI trade is reshaping markets (Reuters)
S&P 500 Closes Near Record as Tech Keeps Rallying: Markets Wrap (Bloomberg)
Bitcoin Settles In Near $70,000 After Wild Roller-Coaster Ride (Bloomberg)
Tech Stock Recovery Fuels Dow Record (WSJ)
See Also:
Investors chase cheaper, smaller companies as risk aversion hits tech sector (Reuters; 2/8)
Alphabet’s debt raise fuels forecasts for record year in corporate bond sales (Reuters)
Alphabet Embarks on Global Bond Spree to Fund Record Spending (Bloomberg)
Memory Chip Squeeze Wreaks Havoc in Markets, With More to Come (Bloomberg)
Stocks’ Sharp Rebound Is Only Making Investors More Nervous (WSJ; 2/8)
New York Fed Survey of Consumer Expectations shows improved near-term inflation and employment outlooks
The latest NY Fed SCE revealed declining near-term inflation expectations and modest improvement in survey respondents’ impression of job availability.
Comment:
The Fed has been presented with the difficult challenge of managing the tension between sagging labor markets and above-target inflation. The central bank has opted to pause while it assesses the outlook for and risks to its dual-mandate goals of maximum employment and price stability.
Sources:
See Also:
Bloomberg: China cautions on US Treasury holdings in light of market volatility, risks
According to Bloomberg, Chinese regulators have encouraged banks and other financial institutions to contain or even reduce their US Treasury exposure. Market volatility, fiscal concerns, and geopolitical tensions have increased the perceived risk of holding US government debt.
Comment:
That China, Japan, or any other large holder of US Treasury debt would sell those holdings en masse is unlikely given liquidity constraints and the massive self-inflicted losses that would follow. Entities bearing considerable risk generally prefer to trade their positions carefully and quietly.
Source:
China Urges Banks to Curb Exposure to US Treasuries (Bloomberg; 2/8)
Around the World
Hong Kong publisher and activist Jimmy Lai sentenced under National Security Law
Former media magnate and rights advocate Jimmy Lai was convicted of multiple violations of Hong Kong’s National Security Law and sentenced to twenty years in prison. The trial, conviction, and sentencing drew condemnation from Western governments.
President Trump, who lamented the ruling and appealed for clemency, will travel to Beijing in early April according to Politico.
Comment:
Passed in 2020, the National Security Law applies extraterritorially - violations may occur anywhere in the world.
Sources:
China critic and former media tycoon Jimmy Lai is sentenced to 20 years in Hong Kong security case (AP)
Hong Kong ex-publisher Jimmy Lai’s sentence raises international outcry as China defends it (AP)
China critic Jimmy Lai sentenced to 20 years in jail after landmark Hong Kong trial (Reuters; 2/8)
Reaction to Hong Kong tycoon Jimmy Lai’s 20-year sentence in security trial (Reuters)
Jimmy Lai’s 20-Year Term Seals China’s Move to Muzzle Critic (Bloomberg)
Hong Kong’s Jimmy Lai Given 20-Year Sentence, Adding Friction to U.S.-China Ties (WSJ; 2/8)
Trump to travel to China first week of April, Politico reports (Reuters)
Thailand’s ruling party prevails in weekend elections; Portugal rebuffs far-right challenge
Thailand’s conservative government performed better than expected to retain control in parliamentary elections. A referendum approved the initial drafting of a new constitution.
In Portugal, a moderate left-wing candidate handily beat back a challenge from the far-right to win the presidency.
Comment:
Nationalist platforms are on the rise globally.
Sources:
Bhumjaithai Party’s election victory signals shift in Thailand’s politics (AP)
Thailand’s ruling party readies for coalition talks after big election win (Reuters)
Thailand PM Anutin consolidates power with dominating election win (Reuters; 2/8)
Portugal elects Socialist as president by landslide, but far right grows (Reuters)
Conservatives Surge to Surprise Victory in Thai Elections (WSJ; 2/8)
Israel paves way for West Bank settlements ahead of Board of Peace meeting
A move to accommodate Israeli settlements in the occupied West Bank drew criticism from Arab neighbors.
The measures precede a possible inaugural meeting of President Trump’s Board of Peace later this month, which would include the executive committee charged with Gaza’s post-war reconstruction.
Sources:
Israel’s security cabinet approves measures to strengthen control over the West Bank (AP; 2/8)
Israel to expand its control in West Bank, make settlers’ land seizures easier, media say (Reuters; 2/8)
Arab states criticise Israel as it expands powers in occupied West Bank (Reuters)
Israel Assumes Broad New Powers in the West Bank (WSJ)
Trump aims to hold the first meeting of his new Board of Peace in Washington this month (AP; 2/7)
Indonesia’s Prabowo invited to US for Trump Board of Peace meeting, eyes trade deal signing (Reuters)
Confronted with US oil blockade, Cuba loses power and fuel
In the midst of island-wide power outages and crippled economic activity, Cuba warned airlines that they would not be able to stop to refuel as the country faced acute fuel shortages on account of a US oil blockade.
Sources:
Odds & Ends
Administration targets environmental rollbacks to cut regulation and judicial guidance
The Wall Street Journal reported that the White House intends to strike the 2009 “endangerment finding” - the bedrock of regulation concerning greenhouse gas emissions.
Note that the federal judiciary also removed evidentiary guidance related to climate change after facing pushback.
Sources:
‘Addictive’ social media platforms face bellwether trial in California
A trial began in Los Angeles on Monday in which the plaintiffs are alleging that the addictive design of social media platforms harms children. Normally insulated by Section 230 protections that prevent tech companies from being responsible for the content posted on their platforms, the lawsuit instead challenges the practices designed to manipulate and prolong engagement.
Sources:
Reuters investigations highlight risks of AI in medicine and healthcare
In a series of special reports, Reuters examines the potential risks associated with integrating AI tools into healthcare with an increasing number turning to AI for medical advice and assistance.
Sources:
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