Donald Trump said the $550 billion trade deal with Japan has officially launched

Donald Trump said the $550 billion trade deal with Japan has officially launched. Trump posted the announcement on Truth Social.

He said Japan has started the first round of funding tied to the agreement. The deal commits $550 billion from Japan into projects across the United States. The focus is industry, energy, and minerals.

Trump wrote, “Our MASSIVE Trade Deal with Japan has just launched! Japan is now officially, and financially, moving forward with the FIRST set of Investments under its $550 BILLION Dollar Commitment to invest in the United States of America — part of our Historic Trade Deal to REVITALIZE the American Industrial Base, create HUNDREDS OF THOUSANDS of GREAT American Jobs, and strengthen our National and Economic Security like never before.” He said tariffs made the projects possible.

He announced three projects tied to the deal with Japan. One is oil and gas in Texas. One is power generation in Ohio. One is critical minerals in Georgia. Trump wrote, “Today, I am pleased to announce three TREMENDOUS Projects in the Strategic Areas of Oil & Gas in the Great State of Texas, Power Generation in the Great State of Ohio, and Critical Minerals in the Great State of Georgia.”

Trump said the gas plant in Ohio will be the largest in history. He said the LNG facility in the Gulf of America will increase exports. He said the minerals facility will end dependence on foreign sources.

Trump added, “America is building again. America is producing again. And America is WINNING again. This is a very exciting and HISTORIC time for the United States of America and Japan. Congratulations to all!”

Exports surge while U.S. shipments fall

New data showed exports from Japan climbed 16.8% in January compared with a year earlier. That beat expectations of 12%. It was the fastest pace since November 2022. December growth was 5.1%. Shipments to Asia rose nearly 26%. Exports to Western Europe increased more than 25%. North America recorded a 3.3% drop.

Exports to China jumped 32% after rising 5.6% in December. China remains the largest trading partner of Japan. The increase came during a diplomatic dispute tied to comments on Taiwan made by Prime Minister Sanae Takaichi.

Shipments to the United States fell 5% after dropping 11.1% in December. The United States is the second largest trading partner of Japan.

Food exports rose 31.3%. Machinery increased 14.3%. Electrical machinery, including chips, climbed 27.3%.

Transport equipment rose 0.8%. That category makes up over 20% of total exports and includes cars and auto parts. The sector has faced pressure from U.S. tariffs.

IMF urges rate hikes as economy slows

Markets reacted quickly. The Nikkei 225 gained 0.9%. The Topix rose 1.26%. The yen strengthened to 153.43 per dollar. The 10-year government bond yield slipped 1 basis point to 2.119%.

The International Monetary Fund urged Japan to keep raising interest rates. The IMF warned against loosening fiscal policy. It said cutting the consumption tax would weaken the country’s ability to respond to future shocks.

Sanae Takaichi won a landslide election and pledged to suspend the 8% consumption tax on food for two years. Investors are watching whether Sanae will resist further rate increases by the central bank.

The IMF said the Bank of Japan’s “continued independence and credibility” will keep inflation expectations anchored. It stated, “The BOJ is appropriately withdrawing monetary accommodation, and gradual hikes should continue to move the policy rate toward neutral.” It also said, “As the baseline projection continues to materialize, withdrawal of policy accommodation should continue so that the policy rate reaches a neutral stance in 2027.”

The economy of Japan grew 0.1% year on year in the fourth quarter. Private demand supported growth. Net exports reduced output by 0.8 percentage point.

For the full year, GDP expanded 1.1%. Shipments fell in the middle of 2025 due to tariff concerns. They rebounded later in the year after duties were reduced to 15% under the trade agreement with the United States involving Japan.

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