Economy
US Treasury chief touts coordination with Japan on FX moves
The U.S. and Japan maintain “constant and robust” coordination in tackling undesirable, excessively volatile currency moves, U.S. Treasury Secretary Scott Bessent said on Tuesday after meeting his Japanese counterpart during a visit to Tokyo.
The remarks suggest Washington broadly consents to Japan’s recent round of yen-buying intervention aimed at propping up its sagging currency, which is inflicting pain on the economy by pushing up import costs.
“I was pleased to reaffirm the strong economic partnership between the United States and Japan,” Bessent said on X.
The comments came just hours after Japanese Finance Minister Satsuki Katayama told reporters the two had reaffirmed close efforts in tackling exchange rate moves, including currency intervention.
“The level of communication and coordination between our teams in addressing undesirable, excess volatility in currency markets continues to be constant and robust,” Bessent added.
The dollar rose to about 157.72 yen after Bessent’s remarks, which fell short of market expectations for stronger warnings on sharp declines in the yen, before dropping abruptly to 156.74 yen.
It was not immediately clear if the rise was due to intervention.
“Markets wanted to know whether there was no change in Bessent’s stance on Japan’s monetary policy,” said Yuji Saito, executive adviser to SBI FX Trade. “There was not much new for markets from Bessent’s comment on X.”
Japan’s response to currency moves in line with U.S. pact
Katayama said she confirmed with Bessent that Japan was responding to currency moves in line with a joint statement signed with the U.S. last September that allowed for foreign exchange intervention to combat excessive market volatility.
“Given current circumstances, we strongly confirmed anew the need to continue coordinating closely on market moves,” she said when asked whether Bessent had commented on recent suspected currency intervention by Japan to support the yen.
“We engaged in discussions on deepening our coordination on various fronts,” Katayama added, in response to a query whether “close coordination” meant that Washington could take the initiative in tackling sharp falls in the yen.
Silence on BOJ
Japanese policymakers are wagering that an endorsement from Bessent on their foray into the currency market could give their intervention some extra bite and help slow the yen’s slide.
Some analysts have also speculated that Bessent might renew his calls for speedier rate hikes by the Bank of Japan (BOJ) as a way to support the yen.
Katayama declined to comment when asked whether the meeting with Bessent touched on the BOJ’s monetary policy. Bessent has not made any comment yet on the BOJ.
BOJ Governor Kazuo Ueda returns to Tokyo on Wednesday from a visit to Switzerland for a meeting of the Bank for International Settlements. It is uncertain if Ueda will return in time to meet Bessent, who is set to wrap up his three-day visit that day.
With the war-induced oil price spike intensifying price pressures, some BOJ policymakers argued in April that rates may need to rise soon, with one flagging the chance of a June move, a summary of opinions at last month’s meeting showed.
Japan has also flagged the possibility of stepping into oil futures markets as it sees speculative surges in energy prices as a major driver of the yen’s weakness against the dollar, but Katayama clarified on Tuesday that it had taken no such step yet.
Bessent also met Ryosei Akazawa, Japan’s minister for economy, trade and industry, and agreed to strengthen ties in the fields of energy and critical minerals.
Türkiye will launch its first offshore wind tender in the first quarter of 2027, Energy and Natural Resources Minister Alparslan Bayraktar said Wednesday.
The government sees offshore wind among Türkiye’s most strategic renewable energy priorities. It aims to install 5 gigawatts (GW) of offshore wind power capacity by 2035.
The country has already designated four areas as installation sites, including the Saros Gulf, areas near the islands of Gökçeada, Bozcaada and the region off the coast of Edremit.
A draft tender specification for the offshore Renewable Energy Resource Zone (YEKA) auction has been published in the announcements section of the Energy Ministry’s website.
Industry representatives, investors and relevant organizations can submit their views on the draft specification until Aug. 17. A final tender specification will be prepared based on the feedback received.
Bayraktar said Türkiye would send a message to the world on its offshore wind ambitions ahead of the U.N. Climate Change Conference (COP31), which will be held in Antalya in November.
He noted that Türkiye would announce details of its first offshore wind YEKA ahead of COP31.
“We will announce the tender in September and hold the offshore YEKA auction in the first quarter of 2027,” Bayraktar stated.
“This tender will be a first for our energy sector. Our target is to reach 5,000 megawatts (MW) of offshore wind capacity by 2035,” he said.
“We do not see offshore wind merely as a new energy source. We also see it as an area that will make a balanced contribution to our country’s security of supply, support our domestic industry and increase qualified employment,” Bayraktar added.
Türkiye has, in recent years, intensified efforts to identify offshore wind energy zones, particularly in the northwestern part of the country.
Compared with onshore plants, offshore wind farms involve higher investment and maintenance costs, but they can generate electricity with fewer interruptions.
The YEKA scheme was introduced in 2016 to facilitate land allocation for investors, ease the deployment of large projects and encourage the domestic production of renewable energy technologies.
The government later unveiled updates to the model to draw greater investor interest. Key enhancements included simplifying post-tender permitting procedures and introducing financial incentives like exemptions from transmission fees.
Türkiye has so far held YEKA auctions totaling 7,800 MW and allocated an additional 3,800 MW of capacity in 2024 and 2025 under the updated auction model.
The country’s total installed capacity now exceeds 125,000 MW, and over 60% of this consists of renewable sources. Wind power capacity stands at more than 15,000 MW, while solar capacity has reached over 26,000 MW.
It plans to organize at least 2,000 MW of YEKA competitions every year, as it aims to raise combined wind and solar installed capacity to 120,000 megawatts by 2035.
The business community hailed a new law establishing the legal framework for the government’s terror-free Türkiye initiative, saying it would lift investor confidence, spur regional development and brighten the country’s long-term economic outlook.
Lawmakers on Monday voted overwhelmingly in favor of the legislation, titled the Law on Strengthening National Solidarity and Social Integration, aimed at advancing a peace effort and the dissolution of the PKK terrorist group,
The law would end one of the world’s longest-running insurgencies, which has killed tens of thousands of people in Türkiye, fueled social division, and, according to President Recep Tayyip Erdoğan, cost more than $2 trillion (TL 95.51 trillion).
The business world described the legislation as “historic” and an important “milestone” for Türkiye’s economic future, saying economies grow faster in an environment of trust and stability.
‘Peace means more investment’
Mustafa Gültepe, chair of the Türkiye Exporters Assembly (TIM), said a Türkiye free from terrorism and security risks, with stronger social cohesion, would become more predictable for investors, more stable for manufacturers and more competitive for exporters.
Gültepe added that the legislation would strengthen positive expectations across a broad range of areas, including Türkiye’s sovereign risk premium, investment climate, regional development and foreign trade.
He also said it would enable more efficient use of public resources by strengthening coordination and reducing waste, creating a more predictable and sustainable environment for both the public and private sectors.
“For exporters, peace means more investment, more production, more trade and more exports,” Gültepe said, adding that TIM was ready to capitalize on the opportunities created by the new period.
Redirecting of resources
Burhan Özdemir, head of the Independent Industrialists’ and Businessmen’s Association (MÜSIAD), called the legislation “a historic decision” for Türkiye’s future and national unity.
He said dismantling the terrorist group marks the beginning of a “new era” that could accelerate economic development.
That could particularly go for eastern and southeastern Türkiye, a region that has long lagged behind economically due to persistent risks.
According to Özdemir, terrorism has cost Türkiye more than $2 trillion over the past four decades by slowing development and diverting resources away from productive investment.
“Now is the time to direct our resources not to defense but to development, production, employment and high technology,” he said.
Özdemir added their members would now work to increase investment, create employment opportunities for young people and strengthen production particularly in the east and southeast.
Strong guarantee for development
Foreign Economic Relations Board (DEIK) Chairperson Nail Olpak said the legislation marked “a historic threshold,” adding that every step toward permanently eliminating terrorism was welcomed by the business community.
He said a more predictable and secure environment would reinforce Türkiye’s competitiveness by encouraging greater investment, production, employment and exports, while also enhancing the country’s appeal to international investors.
“A Türkiye where the shadow of terrorism has been lifted, and security has been strengthened, is the strongest guarantee not only for social peace but also for economic development,” Olpak said.
He noted that confidence, stability and predictability consistently rank among the most important factors cited by the international business community.
Olpak also said stronger domestic unity and lasting security would support regional development and improve Türkiye’s global competitiveness, adding that the business world was fully aware of the economic and social benefits that the terror-free Türkiye initiative could generate.
‘Historic’ opportunity
Anatolian Lions Businessmen Association (ASKON) Chair Orhan Aydın described the initiative as a “historic” opportunity for the country’s future while stressing the importance of preserving social cohesion throughout the process.
“A Türkiye free of terrorism means a safer, more peaceful country with a stronger investment environment,” Aydın said.
He suggested that a more secure environment would make Türkiye more prosperous, improve its international competitiveness and encourage both domestic and foreign investment.
“A factory chimney producing smoke symbolizes not only production but also peace,” Aydın said, adding that the new period would provide a significant boost to investment and manufacturing while making Türkiye a more reliable destination for international investors.
He said businesses around the world naturally gravitate toward safe and predictable markets, expressing confidence that Türkiye would be among the main beneficiaries of a lasting improvement in security and stability.
Inflation in the U.S. slowed in July and a measure of underlying price pressures also cooled, according to official data Wednesday that suggested higher oil and gas prices from the Iran war were only having a limited impact on broader costs in the economy.
Consumer prices rose 3.4% last month from a year ago, down slightly from 3.5% in June, the Labor Department said Wednesday. But inflation is still higher than before the Iran war began in February, when it was 2.4%. On a monthly basis, prices rose just 0.1% from June to July.
The modest decline could ease pressure on the inflation-fighters at the Federal Reserve (Fed) and may give them some room to maneuver ahead of potential rate hikes.
Yet prices are still rising more quickly than average wages, underscoring the struggle many Americans have had with more expensive groceries, gas, and health care, trends that have taken on a high profile in the fast-approaching midterm elections.
U.S. households have been battered by more than five years of elevated prices since the pandemic hit, and the July data is still well above the Fed’s long-term 2% target.
President Donald Trump’s Republicans are facing a stern test in upcoming midterm elections, with Democrats seeking to wrest control of Congress over his handling of the world’s largest economy.
Inflation has surged since Trump launched the war on Iran, with Tehran’s retaliatory action virtually blocking the critical Strait of Hormuz through which a fifth of global energy supplies normally transit.
Consumer inflation came in at 2.4% in February, before spiking to a three-year high of 4.2% in May.
In July, energy prices continued to lead the line in terms of price increases, with gasoline prices – a sensitive political issue – up 24.6% from a year ago.
Fuel oil, used by households for heating and in various industrial applications, was up 39.1% from the year before.
Still, the energy index overall was 1.5% lower than a month ago, indicating a downward trajectory for prices of those commodities as talks to end the war continue.
Excluding the volatile food and energy categories, core inflation also slipped to 2.5% in July from a year ago, down from 2.6% in June.
Core prices rose 0.2% from June to July. Monthly increases at about 0.2% would be low enough over time to bring inflation closer to the Fed’s 2% goal.
Still, oil prices remain elevated and gas prices rose in late July and August, suggesting overall inflation could accelerate next month. On Wednesday, gas averaged $4.04 a gallon nationwide, 16 cents higher than a month ago, according to the motor club AAA.
Key questions for Fed policymakers
Inflation has been pushed higher by a series of shocks to the economy, including Trump’s tariffs imposed last spring, higher gas prices stemming from the Iran war, and a surge in investment in artificial intelligence infrastructure that has boosted computer chip prices.
The key question for the policymakers at the Fed – not to mention for consumers struggling with high gas and grocery prices – is how quickly those one-time effects will fade or whether they will lead to persistently rising prices.
Wednesday’s figures could bolster officials at the Fed who believe the central bank can leave its key rate on hold at about 3.6% while inflation steadily declines on its own as those temporary factors fade.
Overall, price increases have stayed above the Fed’s 2% target for more than five years, suggesting that more than temporary factors may be at work. The cost of services such as health care, restaurant meals, and car maintenance are on average rising at more than 3% annually, and they aren’t particularly sensitive to gas prices or AI investment.
Rising costs for services often reflect higher wages, as companies charge more to offset the cost of higher pay. But incomes aren’t growing fast enough to sustain inflation, economists note.
It’s a confounding situation that has left many economists – and Fed officials – seeking more information to determine where inflation is headed.
“You’ve got all these things that are just not the way the economy used to behave,” Diane Swonk, chief economist at KPMG, said.
For many consumers, years of sharply rising grocery prices have led them to adopt a wide range of coping strategies, from comparison shopping to couponing, to cutting back on favorite foods.
Many firms still pass on higher costs
Some retailers, such as Walmart, have responded by rolling back food prices, a trend that could have lowered July’s inflation figures. Yet many other firms are still passing on higher costs.
Paint company Sherwin-Williams is planning an 8% price increase effective Sept. 1 to offset higher raw material costs, CEO Heidi Petz told analysts late last month. She said that because of the company’s strong relationships with suppliers, it was able to delay price increases until now.
“We are seeing the impact of higher oil and related cost pressures, and we expect continued volatility throughout the balance of the year,” she said.
Wednesday’s report comes as the Federal Reserve is sharply divided over whether it should hike its key interest rate to combat inflation. The Fed kept its rate unchanged, at about 3.6%, at a meeting late last month. But the vote was 9-3, with three dissenters favoring a rate hike.
And at a July 29 news conference explaining the decision, chair Kevin Warsh was vague about the Fed’s next steps, in keeping with his focus on reining in the central bank’s previous willingness to signal whether it was prepared to raise or cut borrowing costs.
“If inflation continues to be elevated… interest rates could well be part of that solution,” he said. “But I wouldn’t say it’s in isolation.”
Long-term interest rates rose after Warsh’s comments, suggesting investors worried that inflation could worsen in the coming months and the Fed might not lift borrowing costs to fight rising prices.
Complicating matters, the government said last week that employers had cut jobs in July, a sign of potential economic weakness. The Fed typically avoids rate hikes when hiring is faltering, because higher borrowing costs could slow the economy further.
Türkiye’s pharma industry, one of the leading in the region and Europe, has seen a notable increase in R&D spending over the 2020-2024 period, according to a report on Tuesday.
The pharmaceutical industry’s R&D expenditures increased 8.3 times between 2020 and 2024, rising from TL 676.2 million (about $14.2 million in current prices) to TL 5.6 billion.
According to a compilation by Anadolu Agency (AA) from a recent review report published by the Turkish Competition Board (RK), the pharmaceutical industry is identified as a field requiring significant investment capital, employing advanced technology and carrying out intensive R&D activities in recent years.
With the advancement of technology, the pharmaceutical industry is developing products not only to treat diseases but also to improve the quality of life.
Companies that develop new products and market reference drugs protected by patents, and therefore place a strong emphasis on R&D activities, are defined as originator pharmaceutical companies.
Accordingly, the increase in R&D investments contributes to the introduction of new medicines and greater product diversity in the short term, while in the long term it creates the conditions for stronger competition among originator and generic drugs.
Global firms’ increasing share in market
According to the latest data included in the report, companies ranked among the world’s top 50 pharmaceutical companies by sales last year accounted for 88% of the U.S. pharmaceutical market and 49% of the Turkish market.
This indicates that globally operating pharmaceutical companies hold a significant share of the Turkish market, while domestic and other international companies continue to maintain strong positions.
Spending on pharmaceutical development has also been rising steadily, alongside drug sales.
Global pharmaceutical R&D spending increased by 3% in 2025 compared with the previous year, reaching $201.3 billion. The U.S. ranked first in global R&D spending, with $130.1 billion.
Increasing domestic production as key objective
The pharmaceutical sector in Türkiye also stands out for its high value-added production structure, skilled employment capacity and R&D-intensive activities.
Under the 12th Development Plan, the objectives in this area include increasing domestic production capacity, reducing dependence on foreign sources and strengthening the country’s capacity to develop innovative medicines.
The total size of Türkiye’s pharmaceutical market, which stood at TL 56 billion in 2020, reached TL 479 billion last year.
The country’s pharmaceutical R&D expenditures also increased steadily between 2020 and 2024. While the sector spent some TL 676.2 million on research and development activities in 2020, this figure rose by 723% to TL 5.6 billion in 2024.
In other words, the sector’s R&D spending increased 8.3-fold over the five-year period.
Domestically manufactured medicines surpass imported drugs
In addition to R&D, production and foreign trade have also drawn attention in the sector.
During the 2020-2025 period, domestically manufactured medicines accounted for a larger share of the overall market than imported medicines, both in terms of sales value and number of packages sold.
Global footwear brand Skechers has launched a new shoe featuring a hidden compartment enabling the integration of location-tracking technology, allowing parents to follow their children’s location.
The new “Where’s My Skechers?” model incorporates a dedicated compartment under the heel of the insole that has a screw-tight cover that hides the locator tag.
Tracking tags and mini screwdrivers are sold separately.
The feature is designed to help parents monitor their children’s whereabouts in environments where they can easily become separated, such as parks, shopping malls, school trips, airports and other crowded public venues.
Skechers said the product combines comfort with technology, enabling parents to check their child’s location through compatible devices such as Apple’s AirTag when needed while allowing children to move freely throughout the day.
AirTags, introduced in 2021, are primarily designed to help users locate personal belongings but have increasingly been incorporated into various accessories.
Senior U.S. and Canadian trade officials are working to finalize a potential agreement that could be presented to U.S. President Donald Trump as early as Monday, Canada’s CBC reported, citing unnamed sources.
The Tuesday report said that the joint proposal could reach Trump at least a day before an Aug. 19 deadline, giving him time to make a final decision before new 50% tariffs on hundreds of Canadian imports are set to take effect.
Canada-US Trade Minister Dominic LeBlanc and U.S. Trade Representative Jamieson Greer LeBlanc are meeting in Washington on Tuesday, their third face-to-face meeting in three weeks. LeBlanc’s trip was delayed after his flight was diverted to Montreal on Monday due to severe weather.
Canada’s chief trade negotiator, Janice Charette, also spent Monday in Washington meeting with U.S. trade officials. Neither LeBlanc nor Charette will comment on the negotiations, the report said.
Beyond seeking to prevent new tariffs, Canada wants relief from U.S. tariffs on steel, aluminum, lumber, and autos, and hopes the talks will lead to an extension of the Canada-U.S.-Mexico Agreement.
Last month, Washington also announced additional tariffs of 50% on certain Canadian goods, covering products ranging from wine and hockey sticks to cement, according to the White House.
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