2025 Turned Trump’s Biggest Strength Against Him

Economic

Political

Summary:

As usual when Donald Trump occupies the White House, 2025 condensed a decade's worth of political upheaval into a single year. Identifying the most important of those developments is like picking through the wreckage to find a few family heirlooms after a tornado has torn through the neighborhood.

But in the swarm of conflicts, controversies, personnel changes, policy reversals, legal battles, feuds and shifting alliances, several dynamics emerged this year that are most likely to shape the electoral landscape in 2026, 2028 and beyond.

Of those key developments, the most significant was the collapse of faith in Trump's ability to manage the economy. In virtually every survey during Trump's first term, more people approved than disapproved of his handling of the economy. Moreover, his approval rating on the economy almost always exceeded his overall job performance rating, which meant that confidence in his economic agenda was a floor bolstering his support no matter which other controversies engulfed him.

Now, that equation has reversed. Recent surveys routinely show that fewer people approve of Trump's management of the economy than at any point during his first four years; most national surveys this month have shown that 40% or fewer Americans give him positive marks on the economy, and even fewer give him good grades on the cost of living — the problem that tops every survey as Americans' biggest concern. It's a complete inversion from his first term: The economy is now dragging down overall assessments of his performance.

To some extent, Trump is simply suffering from proximity: presidents' approval ratings always sag when voters are unhappy with the economy, as they are today. (Like other presidents, he's found that efforts to blame his predecessor for current conditions fall flat after a few months.) But Trump's problems extend beyond that. Polls consistently find that most Americans believe he has not focused enough on their cost of living. Even more damaging, more voters say his agenda has hurt than helped their finances, often by a crushing margin of two or three to one. Voters particularly dislike his tariffs.

The bottom line: Trump's greatest asset during his first term — confidence in his economic mastery — has become his biggest albatross in his second. "Unless there's a fix to inflation … I think the economy is going to continue to drag him down," says Democratic pollster Jay Campbell, part of the bipartisan polling team that surveys attitudes about the economy and politics for CNBC.

The crumbling of confidence in Trump's economic performance largely explains 2025's second key electoral dynamic: the reversal of the president's beachheads among the new voter groups central to his reelection. In 2024, Trump notably improved his previous performance among several big constituencies—Latinos, young men and non-White voters without a college degree. Republican strategists dreamed of realignment.

But Trump's standing with those groups has rapidly deteriorated. Recent surveys that extensively examined attitudes among Latinos and young people, both with much larger samples than typical public polls, found his approval rating with each group has plummeted below 30%.

Frustration over the economy explains much, but not all, of that decline. In the Pew Research Center's massive recent Latino survey, for instance, more than 7 in 10 said the administration is doing too much to deport immigrants; nearly 8 in 10 said his overall agenda was hurting the Latino community. (Even a third of his 2024 Latino voters said his policies were harming the community.) Former Republican Representative Carlos Curbelo, who represented a heavily Latino South Florida district, told me that Trump "had a lot of rope" with Latinos, but has squandered that opportunity with his militarized deportation offensive. "They have gone way too far," Curbelo added. "It's going to be hard for Republicans to recover some of this support."

Which brings us to the third important development of 2025: In the normal hydraulic fashion of American politics, Trump's fall allowed Democrats to run well in this year's major elections. But the Democratic Party's overall public image remains weak.

That may not matter much next year, because midterm elections are predominantly a referendum on the incumbent president's performance. But "in 2028, the question of who we nominate matters enormously," says Simon Bazelon, an adviser at Welcome, a new centrist Democratic group. Even if Democrats win "a referendum on Trump's unpopularity in 2026," he adds, it would be a mistake to conclude "voters are happy with us again, when in fact they may still be angry at us."

The heated argument between progressives and centrists over the party's direction will play out next year in Senate primaries in Maine, Michigan, Minnesota, Iowa and Texas among other places. But the real battle will come in the 2028 presidential primary. And that race may turn less on ideology than on disposition — who Democratic voters believe is the candidate most committed to fight, and most likely to beat, Trump's Make America Great Again movement.

At home and abroad, Trump is governing as if he feels himself completely unbound. But while other Republican officials, with the rarest exceptions, have bowed to his excesses, he's provoked a clear recoil among voters beyond his core coalition.

In that way, 2025 reaffirmed the most important political trend over roughly the past 60 years. The rapid erosion of Trump's 2024 breakthroughs underscored that we continue to live through the longest period in American history when neither party has been able to establish a durable advantage over the other. The last five times a president has gone into a midterm election with unified control of the federal government (the White House, House and Senate) voters have revoked it — the longest such streak in American history. Nothing that happened in 2025 suggests Trump can stop that wheel from turning again in 2026.

Source: Bloomberg Europe

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Winkelmann

Political

Stocks

Economic

Japan's Industry Ministry is set to nearly quadruple its budgeted support for cutting-edge semiconductors and artificial intelligence (AI) development to about 1.23 trillion yen (S$10.1 billion) for the fiscal year starting in April.

Overall, the Ministry of Economy, Trade and Industry's budget rose by about 50 per cent from the previous year to 3.07 trillion yen, largely due to the jump in chips and AI spending.

After Prime Minister Sanae Takaichi's Cabinet signed off on it on Dec 26, the government's initial budget plan will be debated in Parliament in the new year.

The jump in chips and AI spending comes at a time when Japan is trying to strengthen its capacities in frontier technology, as the US and China race ahead. As the world's two largest economies remain on tense terms despite a lull in their trade war, Japan is also trying to secure better supply chain access for key technologies.

Starting with the fiscal year beginning in April, the ministry also plans to secure most of the additional funding for chips and AI in regular budgets, instead of through the more ad-hoc approach of funding it through extra budgets later in the year. That is expected to provide more stable funding to the sectors.

For semiconductors, the ministry has earmarked 150 billion yen for state-backed chip venture Rapidus, bringing the cumulative government investment in the venture to 250 billion yen.

For AI, 387.3 billion yen is being marked for the development of domestic foundation AI models, strengthening data infrastructure and "physical AI", in which AI controls robots and machinery.

In the broader budget, 5 billion yen is being set aside for securing key minerals, including rare earths. For decarbonisation, 122 billion yen is earmarked for areas such as the development of so-called next-generation nuclear power plants.

Some 1.78 trillion yen of special bonds will also be issued to help state-backed Nippon Export and Investment Insurance support Japanese investment in the US as part of the two countries' trade agreement.

Source: Straitstimes

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Blue River

Forex

Economic

USDJPY is showing a recovery amid weak inflation in Tokyo and expectations of a pause in BoJ policy tightening. The current price is 156.29.

USDJPY forecast: key takeaways

The Japanese yen remains under pressure amid slowing inflation in Tokyo
Tokyo's annual inflation rate fell to 2.0% in December, the lowest level in more than a year
Slowing inflation increases uncertainty regarding the timing of further BoJ policy tightening
USDJPY forecast for 26 December 2025: 157.45

Fundamental analysis

USDJPY is showing a recovery after declining for three consecutive trading sessions. Sellers failed to secure a breakout below the key support level at 155.75, which triggered renewed buying activity.

The Japanese yen came under pressure amid a slowdown in inflation in Tokyo, reinforcing expectations that the Bank of Japan may pause its rate-hiking cycle. Tokyo's annual inflation rate slowed to 2.0% in December, marking the lowest reading in more than a year. The decline was mainly driven by easing price pressures in food and energy components.

Tokyo inflation is regarded as a leading indicator of nationwide inflation dynamics and is closely monitored by the regulator. Its slowdown increases uncertainty around the timing of further monetary policy tightening by the Bank of Japan, which continues to weigh on the yen and supports a bullish outlook for USDJPY.

USDJPY technical analysis

USDJPY has consolidated above the upper boundary of the descending channel. Despite the previous bearish impulse, buyers managed to hold prices above the EMA-65, indicating a significant slowdown in bearish pressure and a potential shift in market dynamics.

The USDJPY forecast for today suggests further upside with a target at 157.45. Additional confirmation of the bullish scenario comes from the Stochastic Oscillator: its signal lines have turned upward after rebounding from the oversold zone, indicating renewed buying pressure.

A sustained breakout and consolidation above the 156.15 resistance level would strengthen bullish positions and confirm the potential for continued upward movement toward new local highs.

Summary

USDJPY technical analysis points to a sustained bullish bias, with the potential for further growth toward the 157.45 level amid slowing inflation in Tokyo, which continues to pressure the Japanese yen.

Source: RoboForex

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Gerik

Economic

Record Spending Meets Tight Debt Controls

The Takaichi administration’s proposed ¥122.3 trillion ($783 billion) budget marks the highest annual spending plan in Japan’s history. However, the fiscal blueprint seeks to strike a delicate balance between economic support and market stability. Finance Minister Satsuki Katayama emphasized that the plan caps new bond issuance below ¥30 trillion for the second consecutive year, with the debt reliance ratio falling to 24.2% the lowest since 1998.

This attempt to reassert fiscal discipline comes in response to rising government bond yields and yen depreciation, both of which have been aggravated by investor fears over unchecked fiscal expansion in a country with the world’s highest debt-to-GDP ratio. The proposal to reduce super-long Japanese Government Bond (JGB) issuance in the next fiscal year further supports the government’s narrative of restraint, helping cool the 30-year JGB yield, which had recently hit a record 3.45%.

Defense, Debt-Servicing and Inflation Push Budget Higher

While the top-line budget figure appears inflationary, much of the increase stems from rising debt-servicing costs and defense outlays rather than new stimulus. Military spending is set to rise 3.8% to ¥9 trillion ($60 billion), aligning with both Takaichi’s nationalist platform and U.S. demands for greater self-reliance from its allies. These components reflect political rather than cyclical spending and highlight the complexity of managing fiscal growth without further pressuring the yen.

The correlation between defense expansion and fiscal tension is evident, as higher spending regardless of its economic multiplier adds to structural debt burdens, potentially challenging the BOJ’s monetary goals.

Monetary Tightening Continues as Inflation Persists

Tokyo’s core consumer price index rose 2.3% year-over-year in December, easing from November’s 2.8% but still above the BOJ’s 2% target. A separate measure excluding both fresh food and fuel a metric closely monitored by the BOJ as a gauge of demand-driven inflation showed a 2.6% rise. The slowdown supports the central bank’s view that inflation may moderate temporarily before reaccelerating on the back of stronger domestic demand.

The BOJ raised interest rates to 0.75% last week, the highest level in 30 years, signaling greater confidence in Japan’s path toward sustained inflation. However, the weak yen pressured by dovish perceptions of BOJ policy may continue to fuel imported inflation and complicate the timing of future hikes.

Analysts warn that further yen declines could prompt firms to resume price hikes, creating sticky, cost-led inflation and necessitating more aggressive BOJ intervention. As a result, the interplay between currency movements and inflation expectations remains a central focus for both fiscal and monetary authorities.

Economic Risks and Political Trade-offs Remain

Although the budget is smaller than some investors feared, political realities may undermine fiscal restraint. Mizuho’s senior economist Saisuke Sakai cautioned that fragmentation in Japan’s political landscape could pressure Takaichi to issue a large supplementary budget in 2026 to secure opposition support. If so, the credibility of current fiscal targets could erode, reigniting market concerns about inflation acceleration and yen depreciation.

Meanwhile, Japan’s industrial production data revealed a 2.6% decline in November, worse than the expected 2.0% drop, driven by cuts in automobile and battery output. This weak manufacturing reading reinforces the need for fiscal support, even as monetary conditions tighten.

Japan’s record budget for 2026 reveals a government attempting to stimulate demand and bolster national defense while maintaining enough restraint to calm bond markets and support the yen. Whether this balance can hold depends on inflation dynamics, the yen’s trajectory, and the political feasibility of sustained fiscal discipline. As the BOJ continues gradual tightening and global financial conditions evolve, Japan’s policy coordination will be tested on both domestic and international fronts.

Source: Reuters

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Gerik

Economic

Commodity

Battery Demand and Geopolitics Push Graphite Back Into U.S. Spotlight

After decades of dormancy, graphite mining in the United States is regaining momentum. Once abandoned in favor of cheaper imports, particularly from China, domestic graphite production is now viewed as strategically vital. The driver is twofold: booming demand from the lithium-ion battery industry and increasing concern over supply chain vulnerabilities amid intensifying U.S.-China trade tensions.

Titan Mining Corp., operating in upstate New York near the Canadian border, is among five active graphite projects in the U.S. The company aims to begin commercial-scale output by 2028 and already produces limited ore under its existing zinc mining permits. Titan expects to eventually supply about 40,000 metric tonnes of graphite concentrate annually approximately half of current U.S. demand for natural graphite.

This revival marks a structural shift in U.S. resource policy, with a direct causal relationship between the strategic role of graphite in energy storage and federal support mechanisms driving domestic investment.

From Pencils to Power Grids: Graphite’s Expanding Industrial Role

Graphite’s value has evolved from its traditional uses in pencils and lubricants to becoming an indispensable component in high-tech and defense applications. Its ability to conduct electricity and withstand extreme heat makes it essential for anodes in lithium-ion batteries, heat-resistant coatings, military-grade lubricants, and energy grid storage systems.

The U.S. Department of Energy has declared graphite a “critical mineral,” while the Department of the Interior includes it among 60 key materials vital to national security and industrial competitiveness. The inclusion of a tax credit for critical mineral production in the 2022 Inflation Reduction Act further reflects Washington’s commitment to securing supplies of materials like graphite.

As battery demand continues to surge, so too does interest in both natural and synthetic graphite. Though synthetic graphite offers higher purity, it is significantly more expensive and energy-intensive to produce, increasing the appeal of reviving natural graphite mining within U.S. borders.

Policy Tailwinds and Federal Support Accelerate Domestic Projects

Titan Mining and other developers are benefiting from a policy environment increasingly tilted toward domestic mineral independence. The Trump administration has reinforced this agenda through trade policies, critical mineral diplomacy, and streamlined permitting. Titan’s New York project, in particular, has been granted fast-tracked permitting status and is eligible for up to $120 million in construction loans and $5.5 million in federal funding for feasibility work.

Other notable U.S. projects include Graphite One Inc. in Alaska home to what may be the largest large-flake graphite deposit in the U.S. and Westwater Resources’ Coosa Deposit in Alabama. All aim to reduce dependence on Chinese graphite exports, which still dominate both the natural and synthetic graphite markets.

China recently imposed export controls on graphite, then eased them temporarily, highlighting the volatility and unpredictability of foreign supply. U.S. strategic planners have interpreted these actions as a warning signal and an opportunity to localize production.

Titan’s Strategic Advantage and Market Readiness

Titan holds a unique position among U.S. projects due to its ability to leverage existing infrastructure from its zinc operations. This allowed the company to begin early-stage graphite mining with limited regulatory delay, while pursuing full-scale permits for expansion. CEO Rita Adiani confirmed strong commercial interest, noting that “100% of the output” could already be contracted in advance, signaling deep market demand.

The company's operations in New York also benefit from proximity to North American auto and battery manufacturing hubs, potentially reducing the carbon footprint and logistical complexity associated with importing graphite from overseas.

The resurgence of U.S. graphite mining marks a significant realignment of industrial policy, shaped by the convergence of clean energy demand, strategic supply chain concerns, and trade competition with China. Projects like Titan’s are not just reviving a dormant industry they are helping build the foundation for America’s energy transition and economic resilience. As global battery demand climbs, graphite’s geopolitical and industrial relevance is only expected to grow, positioning the U.S. for a more self-sufficient future in critical minerals.

Source: AP

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Glendon

Forex

Economic

Thailand's central bank has aggressively acted to ease volatility in the baht the central bank chief said on Friday, with the currency surging to its highest level against the dollar in more than four years.

The baht has gained 10.3% against the dollar so far this year to become Asia's second-best performing currency.

The baht's strength has added to the problems in Southeast Asia's second-largest economy, which has been struggling with US tariffs, high household debt, a border conflict with Cambodia and political uncertainty ahead of elections in early February.

"Although we have intervened heavily in the latter half of the year, our efforts could only mitigate fluctuations," governor Vitai Ratanakorn told reporters.

"We want to reduce volatility. We do not want the baht to strengthen to the point where it hurts exporters and the economy," he said.

The central bank has not set a specific target for the baht's value and cannot manipulate the currency due to international agreements," Vitai said.

The baht's recent strength stems from a weaker dollar, capital inflows and Thailand's higher-than-expected current account surplus, he said.

On Friday, the central bank initiated measures to strengthen scrutiny over capital inflows exceeding US$200,000 (RM808,000), Vitai said, adding that banks were now required to follow stricter review processes.

"This is the first time we are checking the purposes and documentation of such inflows," Vitai said.

The move follows measures to control gold trading, which the central bank has blamed for helping to drive up the baht.

On Friday, the central bank also announced a loan guarantee scheme expected to increase new credit by 100 billion baht (RM13 billion) over the next one to two years.

The scheme, which will begin in January 2026, will offer guarantees for loans of up to 100 million baht for targeted small- and medium-sized businesses, and up to 150 million baht for corporates.

Vitai reiterated that lowering interest rates would not solve structural problems.

Last week, the central bank cut its key interest rate for the fifth time since October 2024, with rates down by a total of 125 basis points over the period.

Source: Theedgemarkets

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Daniel Carter

Political

Russia-Ukraine Conflict

Ukraine's President Volodymyr Zelenskiy said on Friday he planned to meet with U.S. President Donald Trump soon and that a lot could be decided before the New Year as Washington pushes diplomatic efforts to end the war with Russia.

Zelenskiy has said that sensitive issues, including any compromises on territory, should be discussed at the level of heads of state, and Kyiv has been seeking a face-to-face meeting with Trump.

"We have agreed on a meeting at the highest level – with President Trump in the near future. A lot can be decided before the New Year," he said on X following the latest round of talks between Ukrainian and U.S. negotiators.

Zelenskiy held talks on Thursday with Trump's special envoy Steve Witkoff and the president's son-in-law Jared Kushner.

He said that some documents, part of a wider framework aimed at ending the conflict and ensuring Ukraine's reconstruction, were "nearly ready" while others were "fully prepared".

Earlier this week, Zelenskiy unveiled a 20-point draft peace plan that he described as the main framework for ending the war.

While the plan outlined Ukraine receiving security guarantees to prevent further Russian aggression, there was no compromise between Ukraine and the U.S. on the issues of territory, which Moscow is demanding Kyiv cede.

Control over the occupied Zaporizhzhia nuclear power plant also remained the matter of further discussion.