Capturing the Potential of AI Robots?
Chart of the Week:
Ishiba Resigns, Japanese Stocks May Have Priced in Negatives
After the LDP’s upper house loss on Jul 20, PM Shigeru Ishiba initially clung to office, but mounting pressure—including resignations by key party officials led by Hiroshi Moriyama, calls from Taro Aso for an early leadership race, and a decisive meeting with LDP Vice President Yoshihide Suga and Shinjiro Koizumi—pushed him to step down on Sep 7 to avoid a humiliating exit.
Market Recap 1:
NFP Sharply Revised Down, Bolstering Fed Cut Bets; Tech and AI Lead Rally
August nonfarm payrolls rose only 22k, far below expectations of 75k. In addition, the Labor Department revised down job gains between Mar 2024 and Mar 2025 by 911k—the largest downward adjustment on record. The weak data reinforced expectations for a Fed rate cut in September, pushing U.S. equities to fresh highs.
Market Recap 2:
PPI Misses, CPI In Line; Yields and Dollar Fall, Gold Extends Rally
PPI came in below expectations while CPI matched forecasts, leaving intact the Fed’s expected September rate cut restart. Bonds rallied broadly on lower yields, though European debt lagged amid French political turmoil and an ECB hold on rates.
What’s Trending:
China Exports Stable as EU and ASEAN Growth Offsets U.S. Decline
China’s exports rose 4.6% YoY in August, slower than July’s 7.5%, but the 6-month moving average of 6.9% shows growth remains intact. While exports to the U.S. continue to contract, overall exports stayed steady, supported by stronger shipments to the EU and ASEAN, both now larger markets than the U.S.
In Focus 1:
Global Workforce Set to Decline; Falling Robot Costs May Fill Labor Gap
UN data show aging populations are pressuring developed markets, with those over 65 steadily rising in the U.S. and Europe. McKinsey projects declining fertility will lead to population contraction in many regions by century’s end, widening global labor gaps. Humanoid robots with general-purpose labor capabilities could provide scalable solutions and efficiency gains.
In Focus 2:
Tech Giants Ramp Up AI Capex to Drive Humanoid Robot Applications and Market Growth
Bloomberg estimates U.S. and Chinese tech giants will spend USD 371bn in capex in 2025, up 44% from 2024, underscoring an intense “AI arms race” to secure leadership in AI services. Heavy investment is expected to continue over the next 2–3 years to meet surging demand.
