Trump Strikes Trade Deal With Japan, Microsoft Warns of Nuclear Security Hack

0:00Bloomberg Daybreak U.S. edition is brought to you by OTC Markets Group. OTC Markets' overnight platform for exchange-listed securities, Moon ATS, provides access to global securities in U.S. dollars from 8 p.m. to 4 a.m. Eastern, Sunday through Thursday. Learn more at otcmarkets.com slash moon. Moon ATS is operated by OTC Link LLC, a FINRA-registered broker-dealer, and is available only through participating broker-dealers. Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work.

0:44It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChachiPT.com by selecting Work Mode. Available on Plus and Pro plans. This is Matt Rogers from Las Culture East. That's with Matt Rogers and Bowen Yang. This is Bowen Yang from Las Culture East. That's with Matt Rogers and Bowen Yang. You know when people try a new food and suddenly it's like, okay, hold on, I got a new favorite food.

1:22That's the reaction a lot of people are having when they first try Kewpie mayo. Yeah, it's the one with the red cap and the little baby on the bottle. You've probably seen it at the grocery store. And this mayo is different. Most mayonnaise uses whole eggs. Kewpie only uses egg yolks, which gives it this rich umami flavor. It's smoother, deeper, almost buttery. Once people try it, they start putting it on everything. Egg sandwiches, fries, burgers. Chefs use it. Restaurants use it. People who really care about flavor use it. Put it on just about anything. Then you'll understand. Kewpie, the original Japanese mayonnaise.

1:56Bloomberg Audio Studios. Podcasts. Radio. News. Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with new developments on global trade. President Trump has announced a deal with Japan that sets tariffs on the country's imports into the U.S. at 15%. The agreement spares Japan from a threatened 25 % rate that was set to take effect next week. Crucially for Japan, the 15 % rate covers cars and car parts exported to the U.S. In return, the country will accept cars and trucks built to American safety standards. Here is President Trump discussing the deal.

2:39We worked on it long and hard, and it's a great deal for everybody. I always say it has to be great for everybody. It's a great deal. A lot different from the deals in the past, I can tell you that. Now, a centerpiece of the deal is a$550 billion fund backed by Japan to make investments in the U.S. Details on that still to be hammered out. Japan's also agreed to buy 100 Boeing aircraft, boost rice purchases, and increase defense spending with U.S. firms. President Trump is also pledging to guarantee Japan the lowest global rate on forthcoming sectoral tariffs. That's expected to include semiconductors and pharmaceuticals.

3:13Haven, shares in Japanese carmakers in Tokyo jumped on the trade agreement. Toyota rose 14 percent, Honda gained 11 percent, and Nissan rose more than 8 percent. Automakers also rising in Europe. Shares of Mercedes and Porsche are up more than 5.5%. And Karen, the trade deal comes as Japan's embattled Prime Minister Shigeru Ishiba is denying reports he plans to step down. These reports from Japanese media came days after Ishiba's ruling coalition suffered that historic setback in Sunday's upper house election. Ishiba says there's no truth to the reports. They'd pushed Japan's 10-year government bond yield to its highest level since 2008.

3:48After months of uncertainty, President Trump's latest tariff deals, Nathan, are providing clarity on a new trade landscape for the world's biggest manufacturing region in East Asia. In addition to the Japan deal, a separate agreement with the Philippines at a 19 percent rate, the same level as Indonesia, and a percentage point below Vietnam's 20 percent baseline. Meantime, Treasury Secretary Scott Besson says he'll meet with his Chinese counterparts in Stockholm next week for their third round of talks aimed at extending a tariff truce and widening their discussions. China's Commerce Ministry says Vice Premier Hali Fong will be in Sweden for those talks.

4:23May Karen, President Trump is not letting up in his criticism of Fed Chair Jay Powell. In a meeting with Republican lawmakers, the president said Powell will only be in office for a short while. His term does expire in May. And the president continued to hammer the chairman on interest rates during his earlier Oval Office meeting with the Philippines president, heard live on Bloomberg Radio. People aren't able to buy a house because this guy is a numbskull. He keeps the rates too high and probably doing it for political reasons. Now, President Trump has said he has no plans to fire Powell. In an interview with Fox Business, Treasury Secretary Scott Besson said he sees no reason for the chairman to step down now.

5:01His term ends in May. If he wants to see that through, I think he should. If he wants to leave early, I think he should. Secretary Besson says the Fed should also do an internal review of its non-monetary policies. He says that could be Powell's legacy. In other news this morning, Karen, the Justice Department says it wants to interview Jeffrey Epstein's former girlfriend, Ghislaine Maxwell. She is currently serving 20 years in prison for helping the late financier sexually abuse underage girls. The move comes after a fierce backlash from parts of President Trump's base over his earlier refusal to release additional records about Epstein.

5:40Attorney General Pam Bondi has asked two federal judges to unseal grand jury testimony in the Epstein and Maxwell investigations. The judges have ordered the government to lay out the special circumstances that would justify releasing those secret transcripts. Ghislaine Maxwell's lawyer, meanwhile, confirms they are in discussions with the DOJ on an interview. In a statement, the lawyer says, quote, we are grateful to President Trump for his commitment to uncovering the truth in this case. Nathan, we have new developments this morning involving the global hack involving Microsoft software. And Bloomberg's John Tucker joins us live with the very latest.

6:13John, good morning. Good morning, Karen. The U.S. agency that's responsible for maintaining and designing the nation's nuclear weapons was among those breached by the hack of Microsoft SharePoint software. And our sources tell us no sensitive or classified information is known to have been compromised in the attack on the National Nuclear Security Administration. But former Deputy National Security Advisor Ann Neuberger tells Bloomberg balance of power, this is a big deal. Because SharePoint is so widely used, we can expect likely a fair number of victims. And the vulnerability is a major one.

6:47So attackers can not only steal data, they're stealing keys. Microsoft has blamed Chinese state-sponsored hackers for the attacks. The hackers have stolen signing credentials, including usernames, passwords, hash codes, and tokens. In New York, I'm John Tucker, Bloomberg Radio. Thanks, John. Turning to markets now, stocks begin the day at record highs on trade optimism and ahead of earnings from the first of the magnificent seven companies. Bloomberg's Charlie Pellett begins our team coverage with a look at what to expect today from Google parent Alphabet. Alphabet's results are expected to bolster sentiment about its position in artificial intelligence.

7:25Anna Rathbun is the CEO of Granadilla Advisory. I don't know about you, but when I talk to my friends, they've stopped using Google as a search engine. They're using ChatGPT. According to data compiled by Bloomberg for the second quarter, Alphabet is expected to report net earnings of$218 a share on revenue of nearly$80 billion in New York. Charlie Pellett, Bloomberg Radio. All right, thanks, Charlie. The Alphabet earnings will come after the closing bell, and that's when we'll also hear from Tesla. Bloomberg's Tom Busby continues our team coverage with a preview of the EV maker. After reporting earlier this month that Q2 deliveries were down 13 % from a year ago, many analysts are worried about Tesla reporting a second straight year of declining deliveries amid ongoing sales slumps here in the U.S., as well as in China and Europe.

8:12Investors will be watching, though, for updates on its outlook for the full year and information about its self-driving robo-taxi efforts and the long-delayed plans for a more affordable EV model. Bloomberg consensus calls for revenue of$22.54 billion on adjusted earnings per share of$0.42. Tom Busby, Bloomberg Radio. Okay, Tom, thank you. And as we await those MAG-7 earnings and other tech companies taking it on the chin this morning, shares of Texas Instruments are now down more than 12%. The chipmaker came out with an outlook more guarded. than some investors anticipated.

8:46Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. A dangerous heat wave in the nation moves east. Bloomberg meteorologist Craig Allen. Extreme heat is the big story once again as a heat dome builds over the central and eastern portion of the United States. Right now, we have about 18 states with a heat advisory, as well as about a half a dozen states with an excessive heat warning. Bloomberg meteorologist Craig Allen says about 80 million people are under some kind of heat alert.

9:21Attorney General Pam Bondi removed a U.S. attorney for New Jersey, Desiree Grace, that had been named by federal judges to replace President Trump's choice. The move came after judges declined to extend the tenure of the president's appointee, Alina Habba, whose four-month tenure has been marked by controversy. Deputy AG Todd Blanche defended Habba, saying that judges acted like activists. Investigators say a fire that killed 10 people at a Massachusetts assistant living facility was likely caused by smoking or an oxygen machine's electrical problem. The Massachusetts fire Marshal said that the July 13th blaze at Gabriel House spread quickly due to the presence of medical oxygen.

10:06Bristol County District Attorney Thomas Quinn. It was clear after a preliminary examination of the scene and initial interviews that the fire did not appear to have been set intentionally. DA Quinn says the Gabriel House had been home to about 70 people. We've lost the prince of darkness.

10:31Flowers and photos now surround Ozzy Osbourne's star on the Hollywood Walk of Fame as fans stop to pay tribute to the heavy metal singer Osbourne died yesterday. Greg Harris is the president and CEO of the Rock and Roll Hall of Fame. He also achieved pop culture status with the Osbourne's reality show. We got to know him as a human being and a bit of his humorous side. and what an interesting character and just a warm individual. Ozzy Osbourne was 76. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg, Karen. All right, Michael Barr, thank you.

11:10Bloomberg Daybreak U.S. Edition is brought to you by OTC Markets Group. Thinking about joining the exploding overnight market space but unsure where to start? Designed to meet the needs of a growing international investor base, OTC Markets Overnight Platform for Exchange-Listed Securities, Moon ATS provides access to global securities in U.S. dollars from 8 p.m. to 4 a.m. Eastern, Sunday through Thursday. Extend your trading day and trade global securities in U.S. dollars through a FINRA-licensed broker-dealer. In the first half of 2026, over$28.1 billion U.S. dollars traded on Moon ATS. Learn more about Moon ATS.

11:47Visit otcmarkets.com slash moon. Moon ATS is operated by OTC Link LLC, a FINRA-registered broker-dealer. Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful.

12:28Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans. This is Matt Rogers from Las Culture East. That's with Matt Rogers and Bowen Yang. This is Bowen Yang from Las Culture East. That's with Matt Rogers and Bowen Yang. You know when people try on new food and suddenly it's like, wait. That's the reaction a lot of people are having when they first try Kewpie mayo. It's the one with the red cap and the little baby on the bottle. You've probably seen it in the grocery store before. And if you've ever just walked past it, some people would say that's a huge mistake.

13:04Because this mayo is different. Most mayonnaise uses whole eggs. Kewpie only uses egg yolks, which gives it this rich umami flavor. It's smoother, deeper, and almost buttery. Once people try it, they start putting it on everything. Egg sandwiches, fries, burgers. Some fans even swear by dipping pizza crust in it. And once you notice it, you start seeing it everywhere. Chefs use it. Restaurants use it. People who really care about flavor use it. Never tried it? Grab the bottle with the red cap next time you're at the store. Put it on just about anything. Then you'll understand. Kupi, the original Japanese mayonnaise.

13:42Time now for the Bloomberg Sports Update. Here's John Stashauer. John, good morning. Good morning, Karen. The Toronto Blue Jays had not lost a home game in a month. 11 wins in a row, five of those coming against the Yankees. It's why the Jays had gone four games ahead in the AL East. The Yanks took the lead. A Jazz Chisholm 3-1 home in first inning, but another blown lead. Toronto tied it up with the help of another Anthony Volpe. Error is league-leading 13th. 4-4 game, top of the ninth inning. High fly ball, right field and deep. Luke is back on the track. See ya! A huge home run from Ben Rice as the Yankees take a 5-4 lead.

14:20Well, Ben Rice got a look at Hoffman last night, and he did not waste any time knowing he's going to get a fastball. At some point, he got it on the first pitch, and he did not miss it. On the S-Network, Yanks won 5-4, and they'll have Max Fried going tonight. His first outing since the start 10 days ago was cut short due to a blister. The Mets at Citi Field down 2-0, came back, beat the Angels 3-2, helped by a Francisco Alvarez two-run homer. He had been banished to the minors where he belted 11 homers, earning the trip back. Phillies stay half game ahead. They beat the Red Sox 4-1. Sox are 1-3 since that 10-game winning streak.

14:53The Nationals beat the Reds 6-1. Milwaukee's 11-game winning streak ended with a 1-0 loss in Seattle. Only run of the game, Cal Raleigh's 39th home run. At Barclays, Liberty beat the Fever 98-84 at the end. Still without the injured Kaitlin Clark. It's the Liberty's fourth straight win. They're now 16-6. NFL training camps are open. The Bengals' Trey Hendrickson, a no-show 35 sacks over the last two seasons, and yet Cincinnati offering a new contract that has only one year guaranteed. And Terry McLaurin, the Commander's top wideout, also a no-show. Tennis in Washington, a first-round victory for 45-year-old Venus Williams, her first win in two years.

15:32She's the second oldest ever to win a match. Her opponent is 22. She was born after Venus and won four Grand Slam titles. John Stash, Albert Bloomberg Sports, Karen Nathan. Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg.com and the Bloomberg Business app. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager with nine days to go until the tariff deadline. President Trump is touting what he says may be his biggest deal yet. I just signed the largest trade deal in history. I think maybe the largest deal in history with Japan. The president broke the news to a room of Republican lawmakers at the White House last night announcing a 15 percent tariff rate on Japanese imports into the U.S., as well as a$550 billion investment fund.

16:22Joining us for the latest on this is Bloomberg's Jill Deesis in Hong Kong. Of course, Jill, we've been hearing that Japan could face a 25 percent tariff rate before this deal was announced, obviously much lower. What more can you tell us? Good morning. Good morning, Nathan. Yes, I think with this particular deal, obviously, you know, there's going to be some time to adjust to a 15 percent tariff rate, given that just, you know, higher than anything it was before. But if you're Japan, this is still much better than where things seemed like they were trending. I mean, first of all, we had after the Liberation Day tariffs from Trump were announced at the beginning of April, we were thinking somewhere in the 24 percent range.

17:02And then he actually crept up a bit in recent weeks, threatening a 25 percent tariff. So this does seem like on its face, you know, a little bit of relief in terms of, you know, if you're an investor, you're seeing a little bit of that uncertainty lifted. You know, we certainly saw that impact with stocks in Japan today, particularly those automakers really seeing some spikes. I think, though, you know, with something like this, obviously you have to see how exactly everything develops. I'm particularly keen on learning more about this$550 billion fund to make investments in the United States.

17:35We're still not entirely sure how exactly this is going to be funded. Japan has agreed to provide these funds to invest in projects in America. I think the timeline still has to be spelled out a little bit more. But it surely has to come again as a relief to investors watching this space because a lot of those threats on automakers in particular. I mean, when we're talking about 25 percent, that's incredibly high. And so, again, it does alleviate that a little bit. But, you know, it still has a lot of things when it comes to Trump and flux. So we'll see where we go from here. These talks had been so sticky before the results of last weekend's election in Japan.

18:12Was the loss for Shigeru Shiba's ruling party sort of a kick in the pants for Japan to get this done? Yeah, I mean, look, I think when it comes to these Japan elections, so essentially, you know, Prime Minister Shigeru Shiba was already a bit on the back foot after he came into power last year. You know, his party did suffer defeats in the lower house elections. Then we saw this upper house election not go his way over the weekend. I mean, you know, really, really critical blow there and has raised a lot of questions about whether or not he can actually maintain power in Japan. I think that's still a really open question.

18:50One thing he did say was that he would hold on until, you know, at least a critical part of this was getting this trade deal over the line. Now that that's done, obviously raising a lot of speculation about how long he continues to stay on. Yeah, certainly. I mean, there are reports in Japan that he already made a decision to resign maybe this month or next. I guess he's pushing back on that now. Yes, that's right. So essentially, some local media reports came out saying that he had actually met with some of his predecessors and discussed the timeline for potentially stepping down. Those local media reports were saying by the end of August, perhaps.

19:27He just came out this afternoon and denied those media reports. But I do have to say, when you put a loss like he suffered in parliament, you know, his party suffered in parliament over the weekend in context. I mean, first of all, you know, 55 years since, you know, this ruling party has lost control of both of those chambers. When we have seen critical losses for prime ministers of the ruling party in the past, they really only hold on for maybe a couple of months at most. So I do think that, you know, while he is pushing back against this, the fact that you have this really critical trade deal apparently, you know, done and dusted.

19:59Although, again, I think we have to leave that open a little bit. But apparently done and dusted, I mean, I think that it doesn't mean that pressure on him to resign necessarily goes away. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121.

20:37Plus, listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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