‘Put the fear of God in foreign nations': Trump's revenge tax used for ‘leverage'
Former White House chief of staff Mick Mulvaney discusses United States Treasury Secretary Scott Bessent asking for the removal of the 'revenge tax' from the 'Big, Beautiful Bill'.
'I think it was there for leverage in the first place, it was there to give Trump another chip in the negotiations on trade,' Mr Mulvaney told Sky News Australia.
'They got what they wanted out of this; they put the fear of God in foreign nations.
'They sent a message.'
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The Advertiser
3 hours ago
- The Advertiser
Super funds spared billions after US axes 'revenge tax'
Australian superannuation funds are breathing a sigh of relief after the US dropped a so-called "revenge tax" on foreign investors. The super industry had been ringing alarm bells over section 899 of President Donald Trump's proposed "big beautiful bill", which would have raised taxes by up to 15 percentage points on foreign entities in retaliation for "unfair taxes" imposed on the US by other countries. US Treasury Secretary Scott Bessent on Friday revealed the section would be removed from the bill after a deal was reached with the Group of Seven major industrialised nations, allowing it to drop a global minimum tax rate. "After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests," he posted on the social media platform X. "OECD Pillar Two taxes will not apply to U.S. companies, and we will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months. "Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill." Australia had been an enthusiastic supporter of the OECD Pillar Two agreement, which sought to implement a minimum global tax rate of 15 per cent and thereby limit multinationals from minimising taxes paid in Australia by shifting profits offshore. The US withdrawal from the project further complicates federal government efforts to ensure multinationals pay their fair share of tax. Prime Minister Anthony Albanese welcomed the removal of section 899, noting he raised the issue with Mr Bessent during a meeting at the recent G7 summit in Canada. "This would adversely impact on Australian investment if it had been implemented, particularly on investment from superannuation companies," he told reporters in Sydney. "And one of the things that we held earlier this year in Washington DC was a roundtable of Australian investment funds who are willing and keen to invest in the United States - just one way in which the Australia-US economic relationship is an important one." The US news was met with a sigh of relief from the $4.2 trillion Australian superannuation industry, which would have been particularly exposed to the tax, given it holds almost $700 billion worth of US assets. Modelling conducted for the Association of Superannuation Funds of Australia by consulting firm Mandala found it could have cut $3.5 billion from returns over the first four years. "This is a really welcome step from the US treasury secretary and the superannuation sector is monitoring developments closely," said ASFA chief policy officer James Koval. "There's still a way to go - the amendments need to be made by lawmakers; there are a number of other amendments under consideration. "This section of the legislation would have changed the risk return profile of investment in the US, which would have been a poor outcome for all involved." Treasurer Jim Chalmers also raised Australia's concerns about the tax during a phone call with Mr Bessent on Wednesday, later telling reporters he was hopeful of a positive outcome. "We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US Congress," he said. In a speech in June, Future Fund chair Greg Combet said US investments were a less attractive proposition for the sovereign wealth fund, in part because of the proposed tax hike contained in Mr Trump's "big beautiful bill". Australian superannuation funds are breathing a sigh of relief after the US dropped a so-called "revenge tax" on foreign investors. The super industry had been ringing alarm bells over section 899 of President Donald Trump's proposed "big beautiful bill", which would have raised taxes by up to 15 percentage points on foreign entities in retaliation for "unfair taxes" imposed on the US by other countries. US Treasury Secretary Scott Bessent on Friday revealed the section would be removed from the bill after a deal was reached with the Group of Seven major industrialised nations, allowing it to drop a global minimum tax rate. "After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests," he posted on the social media platform X. "OECD Pillar Two taxes will not apply to U.S. companies, and we will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months. "Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill." Australia had been an enthusiastic supporter of the OECD Pillar Two agreement, which sought to implement a minimum global tax rate of 15 per cent and thereby limit multinationals from minimising taxes paid in Australia by shifting profits offshore. The US withdrawal from the project further complicates federal government efforts to ensure multinationals pay their fair share of tax. Prime Minister Anthony Albanese welcomed the removal of section 899, noting he raised the issue with Mr Bessent during a meeting at the recent G7 summit in Canada. "This would adversely impact on Australian investment if it had been implemented, particularly on investment from superannuation companies," he told reporters in Sydney. "And one of the things that we held earlier this year in Washington DC was a roundtable of Australian investment funds who are willing and keen to invest in the United States - just one way in which the Australia-US economic relationship is an important one." The US news was met with a sigh of relief from the $4.2 trillion Australian superannuation industry, which would have been particularly exposed to the tax, given it holds almost $700 billion worth of US assets. Modelling conducted for the Association of Superannuation Funds of Australia by consulting firm Mandala found it could have cut $3.5 billion from returns over the first four years. "This is a really welcome step from the US treasury secretary and the superannuation sector is monitoring developments closely," said ASFA chief policy officer James Koval. "There's still a way to go - the amendments need to be made by lawmakers; there are a number of other amendments under consideration. "This section of the legislation would have changed the risk return profile of investment in the US, which would have been a poor outcome for all involved." Treasurer Jim Chalmers also raised Australia's concerns about the tax during a phone call with Mr Bessent on Wednesday, later telling reporters he was hopeful of a positive outcome. "We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US Congress," he said. In a speech in June, Future Fund chair Greg Combet said US investments were a less attractive proposition for the sovereign wealth fund, in part because of the proposed tax hike contained in Mr Trump's "big beautiful bill". Australian superannuation funds are breathing a sigh of relief after the US dropped a so-called "revenge tax" on foreign investors. The super industry had been ringing alarm bells over section 899 of President Donald Trump's proposed "big beautiful bill", which would have raised taxes by up to 15 percentage points on foreign entities in retaliation for "unfair taxes" imposed on the US by other countries. US Treasury Secretary Scott Bessent on Friday revealed the section would be removed from the bill after a deal was reached with the Group of Seven major industrialised nations, allowing it to drop a global minimum tax rate. "After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests," he posted on the social media platform X. "OECD Pillar Two taxes will not apply to U.S. companies, and we will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months. "Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill." Australia had been an enthusiastic supporter of the OECD Pillar Two agreement, which sought to implement a minimum global tax rate of 15 per cent and thereby limit multinationals from minimising taxes paid in Australia by shifting profits offshore. The US withdrawal from the project further complicates federal government efforts to ensure multinationals pay their fair share of tax. Prime Minister Anthony Albanese welcomed the removal of section 899, noting he raised the issue with Mr Bessent during a meeting at the recent G7 summit in Canada. "This would adversely impact on Australian investment if it had been implemented, particularly on investment from superannuation companies," he told reporters in Sydney. "And one of the things that we held earlier this year in Washington DC was a roundtable of Australian investment funds who are willing and keen to invest in the United States - just one way in which the Australia-US economic relationship is an important one." The US news was met with a sigh of relief from the $4.2 trillion Australian superannuation industry, which would have been particularly exposed to the tax, given it holds almost $700 billion worth of US assets. Modelling conducted for the Association of Superannuation Funds of Australia by consulting firm Mandala found it could have cut $3.5 billion from returns over the first four years. "This is a really welcome step from the US treasury secretary and the superannuation sector is monitoring developments closely," said ASFA chief policy officer James Koval. "There's still a way to go - the amendments need to be made by lawmakers; there are a number of other amendments under consideration. "This section of the legislation would have changed the risk return profile of investment in the US, which would have been a poor outcome for all involved." Treasurer Jim Chalmers also raised Australia's concerns about the tax during a phone call with Mr Bessent on Wednesday, later telling reporters he was hopeful of a positive outcome. "We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US Congress," he said. In a speech in June, Future Fund chair Greg Combet said US investments were a less attractive proposition for the sovereign wealth fund, in part because of the proposed tax hike contained in Mr Trump's "big beautiful bill". Australian superannuation funds are breathing a sigh of relief after the US dropped a so-called "revenge tax" on foreign investors. The super industry had been ringing alarm bells over section 899 of President Donald Trump's proposed "big beautiful bill", which would have raised taxes by up to 15 percentage points on foreign entities in retaliation for "unfair taxes" imposed on the US by other countries. US Treasury Secretary Scott Bessent on Friday revealed the section would be removed from the bill after a deal was reached with the Group of Seven major industrialised nations, allowing it to drop a global minimum tax rate. "After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests," he posted on the social media platform X. "OECD Pillar Two taxes will not apply to U.S. companies, and we will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months. "Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill." Australia had been an enthusiastic supporter of the OECD Pillar Two agreement, which sought to implement a minimum global tax rate of 15 per cent and thereby limit multinationals from minimising taxes paid in Australia by shifting profits offshore. The US withdrawal from the project further complicates federal government efforts to ensure multinationals pay their fair share of tax. Prime Minister Anthony Albanese welcomed the removal of section 899, noting he raised the issue with Mr Bessent during a meeting at the recent G7 summit in Canada. "This would adversely impact on Australian investment if it had been implemented, particularly on investment from superannuation companies," he told reporters in Sydney. "And one of the things that we held earlier this year in Washington DC was a roundtable of Australian investment funds who are willing and keen to invest in the United States - just one way in which the Australia-US economic relationship is an important one." The US news was met with a sigh of relief from the $4.2 trillion Australian superannuation industry, which would have been particularly exposed to the tax, given it holds almost $700 billion worth of US assets. Modelling conducted for the Association of Superannuation Funds of Australia by consulting firm Mandala found it could have cut $3.5 billion from returns over the first four years. "This is a really welcome step from the US treasury secretary and the superannuation sector is monitoring developments closely," said ASFA chief policy officer James Koval. "There's still a way to go - the amendments need to be made by lawmakers; there are a number of other amendments under consideration. "This section of the legislation would have changed the risk return profile of investment in the US, which would have been a poor outcome for all involved." Treasurer Jim Chalmers also raised Australia's concerns about the tax during a phone call with Mr Bessent on Wednesday, later telling reporters he was hopeful of a positive outcome. "We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US Congress," he said. In a speech in June, Future Fund chair Greg Combet said US investments were a less attractive proposition for the sovereign wealth fund, in part because of the proposed tax hike contained in Mr Trump's "big beautiful bill".
The Advertiser
3 hours ago
- The Advertiser
Asian shares rally while US dollar weakens
Asian shares have hit their highest level in more than three years as they tracked a Wall Street rally, though the dollar struggled on concerns about the Federal Reserve's independence and expectations for early rate cuts. Stock indexes worldwide look set to end the week on a positive note, with worries about tensions in the Middle East and uncertainty over tariffs and trade deals on the backburner for now. MSCI's broadest index of Asia-Pacific shares outside Japan touched its strongest level since November 2021 early in the session. It last traded 0.2 per cent higher and is set to clock a 3 per cent gain for the week. Japan's Nikkei jumped 1.5 per cent and surpassed the 40,000 mark for the first time in five months. Reasons for the upbeat mood included news that Washington has reached an agreement with Beijing on how to expedite rare earth shipments to the United States. US Treasury Secretary Scott Bessent also said on Thursday that he has asked Republicans in Congress to scrap the Section 899 retaliatory tax proposal from their tax and spending bill after Washington reached an agreement with Group of Seven industrial countries. "That was something that had been making some investors, especially foreign investors, nervous when that provision was passed by the House. So if that provision gets removed, then that allays one of the concerns from foreign investors," said Khoon Goh, head of Asia research at ANZ. "The accumulation of these various... positive developments all helped to contribute to the buoyant market mood we're seeing." European futures also gained, with EUROSTOXX 50 futures and DAX futures both up 0.6per cent, while FTSE futures advanced 0.16per cent. US stock futures were little changed, though Wall Street had on Thursday closed near record highs, further supported by expectations of imminent Fed rate cuts. Much of the focus for markets over the past two sessions has been on the prospect of an early change of guard at the Fed, after the Wall Street Journal reported that US President Donald Trump has toyed with the idea of selecting and announcing Fed Chair Jerome Powell's replacement by September or October. That knocked an already battered dollar even lower as traders fretted about an erosion of Fed independence and as they moved to price in more US rate cuts this year. The dollar languished near a 3-1/2-year low on Friday and was headed for a 1.4 per cent weekly loss, its largest decline in over a month. For the year, the greenback is already down more than 10 per cent and if it stays that way in the next few days, that will mark its biggest first half-year fall since the start of the era of free-floating currencies in the early 1970s. Against a weaker dollar, the euro was perched near its highest in over three years at $1.1688. Sterling rose 0.03per cent to $1.3730. "Trump's desire to 'shadow' the Fed using a designated replacement for Chair Jay Powell isn't a good way to promote the perceptions of integrity and autonomy in US policymaking and, by extension, that of the reserve currency status of the US dollar," said Thierry Wizman, global FX and rates strategist at Macquarie Group. Adding to the Fed cut bets has been a raft of weaker-than-expected US economic data, with attention now shifting to Friday's release of the core PCE price index, the US central bank's preferred measure of inflation. US Treasury yields were steady in Asia after falling the previous session, with the two-year yield at 3.7418per cent and the benchmark 10-year yield last at 4.2554 per cent. In commodities, oil prices were set for a weekly decline with the Iran-Israel ceasefire holding and easing concerns over Middle East supply risks. Brent crude futures were up 0.41per cent at $68.01 a barrel while US crude rose 0.46per cent to $65.53 per barrel on Friday, but both were headed for a fall of more than 10per cent for the week. Spot gold fell 0.23per cent to $3,320.25 an ounce. Asian shares have hit their highest level in more than three years as they tracked a Wall Street rally, though the dollar struggled on concerns about the Federal Reserve's independence and expectations for early rate cuts. Stock indexes worldwide look set to end the week on a positive note, with worries about tensions in the Middle East and uncertainty over tariffs and trade deals on the backburner for now. MSCI's broadest index of Asia-Pacific shares outside Japan touched its strongest level since November 2021 early in the session. It last traded 0.2 per cent higher and is set to clock a 3 per cent gain for the week. Japan's Nikkei jumped 1.5 per cent and surpassed the 40,000 mark for the first time in five months. Reasons for the upbeat mood included news that Washington has reached an agreement with Beijing on how to expedite rare earth shipments to the United States. US Treasury Secretary Scott Bessent also said on Thursday that he has asked Republicans in Congress to scrap the Section 899 retaliatory tax proposal from their tax and spending bill after Washington reached an agreement with Group of Seven industrial countries. "That was something that had been making some investors, especially foreign investors, nervous when that provision was passed by the House. So if that provision gets removed, then that allays one of the concerns from foreign investors," said Khoon Goh, head of Asia research at ANZ. "The accumulation of these various... positive developments all helped to contribute to the buoyant market mood we're seeing." European futures also gained, with EUROSTOXX 50 futures and DAX futures both up 0.6per cent, while FTSE futures advanced 0.16per cent. US stock futures were little changed, though Wall Street had on Thursday closed near record highs, further supported by expectations of imminent Fed rate cuts. Much of the focus for markets over the past two sessions has been on the prospect of an early change of guard at the Fed, after the Wall Street Journal reported that US President Donald Trump has toyed with the idea of selecting and announcing Fed Chair Jerome Powell's replacement by September or October. That knocked an already battered dollar even lower as traders fretted about an erosion of Fed independence and as they moved to price in more US rate cuts this year. The dollar languished near a 3-1/2-year low on Friday and was headed for a 1.4 per cent weekly loss, its largest decline in over a month. For the year, the greenback is already down more than 10 per cent and if it stays that way in the next few days, that will mark its biggest first half-year fall since the start of the era of free-floating currencies in the early 1970s. Against a weaker dollar, the euro was perched near its highest in over three years at $1.1688. Sterling rose 0.03per cent to $1.3730. "Trump's desire to 'shadow' the Fed using a designated replacement for Chair Jay Powell isn't a good way to promote the perceptions of integrity and autonomy in US policymaking and, by extension, that of the reserve currency status of the US dollar," said Thierry Wizman, global FX and rates strategist at Macquarie Group. Adding to the Fed cut bets has been a raft of weaker-than-expected US economic data, with attention now shifting to Friday's release of the core PCE price index, the US central bank's preferred measure of inflation. US Treasury yields were steady in Asia after falling the previous session, with the two-year yield at 3.7418per cent and the benchmark 10-year yield last at 4.2554 per cent. In commodities, oil prices were set for a weekly decline with the Iran-Israel ceasefire holding and easing concerns over Middle East supply risks. Brent crude futures were up 0.41per cent at $68.01 a barrel while US crude rose 0.46per cent to $65.53 per barrel on Friday, but both were headed for a fall of more than 10per cent for the week. Spot gold fell 0.23per cent to $3,320.25 an ounce. Asian shares have hit their highest level in more than three years as they tracked a Wall Street rally, though the dollar struggled on concerns about the Federal Reserve's independence and expectations for early rate cuts. Stock indexes worldwide look set to end the week on a positive note, with worries about tensions in the Middle East and uncertainty over tariffs and trade deals on the backburner for now. MSCI's broadest index of Asia-Pacific shares outside Japan touched its strongest level since November 2021 early in the session. It last traded 0.2 per cent higher and is set to clock a 3 per cent gain for the week. Japan's Nikkei jumped 1.5 per cent and surpassed the 40,000 mark for the first time in five months. Reasons for the upbeat mood included news that Washington has reached an agreement with Beijing on how to expedite rare earth shipments to the United States. US Treasury Secretary Scott Bessent also said on Thursday that he has asked Republicans in Congress to scrap the Section 899 retaliatory tax proposal from their tax and spending bill after Washington reached an agreement with Group of Seven industrial countries. "That was something that had been making some investors, especially foreign investors, nervous when that provision was passed by the House. So if that provision gets removed, then that allays one of the concerns from foreign investors," said Khoon Goh, head of Asia research at ANZ. "The accumulation of these various... positive developments all helped to contribute to the buoyant market mood we're seeing." European futures also gained, with EUROSTOXX 50 futures and DAX futures both up 0.6per cent, while FTSE futures advanced 0.16per cent. US stock futures were little changed, though Wall Street had on Thursday closed near record highs, further supported by expectations of imminent Fed rate cuts. Much of the focus for markets over the past two sessions has been on the prospect of an early change of guard at the Fed, after the Wall Street Journal reported that US President Donald Trump has toyed with the idea of selecting and announcing Fed Chair Jerome Powell's replacement by September or October. That knocked an already battered dollar even lower as traders fretted about an erosion of Fed independence and as they moved to price in more US rate cuts this year. The dollar languished near a 3-1/2-year low on Friday and was headed for a 1.4 per cent weekly loss, its largest decline in over a month. For the year, the greenback is already down more than 10 per cent and if it stays that way in the next few days, that will mark its biggest first half-year fall since the start of the era of free-floating currencies in the early 1970s. Against a weaker dollar, the euro was perched near its highest in over three years at $1.1688. Sterling rose 0.03per cent to $1.3730. "Trump's desire to 'shadow' the Fed using a designated replacement for Chair Jay Powell isn't a good way to promote the perceptions of integrity and autonomy in US policymaking and, by extension, that of the reserve currency status of the US dollar," said Thierry Wizman, global FX and rates strategist at Macquarie Group. Adding to the Fed cut bets has been a raft of weaker-than-expected US economic data, with attention now shifting to Friday's release of the core PCE price index, the US central bank's preferred measure of inflation. US Treasury yields were steady in Asia after falling the previous session, with the two-year yield at 3.7418per cent and the benchmark 10-year yield last at 4.2554 per cent. In commodities, oil prices were set for a weekly decline with the Iran-Israel ceasefire holding and easing concerns over Middle East supply risks. Brent crude futures were up 0.41per cent at $68.01 a barrel while US crude rose 0.46per cent to $65.53 per barrel on Friday, but both were headed for a fall of more than 10per cent for the week. Spot gold fell 0.23per cent to $3,320.25 an ounce. Asian shares have hit their highest level in more than three years as they tracked a Wall Street rally, though the dollar struggled on concerns about the Federal Reserve's independence and expectations for early rate cuts. Stock indexes worldwide look set to end the week on a positive note, with worries about tensions in the Middle East and uncertainty over tariffs and trade deals on the backburner for now. MSCI's broadest index of Asia-Pacific shares outside Japan touched its strongest level since November 2021 early in the session. It last traded 0.2 per cent higher and is set to clock a 3 per cent gain for the week. Japan's Nikkei jumped 1.5 per cent and surpassed the 40,000 mark for the first time in five months. Reasons for the upbeat mood included news that Washington has reached an agreement with Beijing on how to expedite rare earth shipments to the United States. US Treasury Secretary Scott Bessent also said on Thursday that he has asked Republicans in Congress to scrap the Section 899 retaliatory tax proposal from their tax and spending bill after Washington reached an agreement with Group of Seven industrial countries. "That was something that had been making some investors, especially foreign investors, nervous when that provision was passed by the House. So if that provision gets removed, then that allays one of the concerns from foreign investors," said Khoon Goh, head of Asia research at ANZ. "The accumulation of these various... positive developments all helped to contribute to the buoyant market mood we're seeing." European futures also gained, with EUROSTOXX 50 futures and DAX futures both up 0.6per cent, while FTSE futures advanced 0.16per cent. US stock futures were little changed, though Wall Street had on Thursday closed near record highs, further supported by expectations of imminent Fed rate cuts. Much of the focus for markets over the past two sessions has been on the prospect of an early change of guard at the Fed, after the Wall Street Journal reported that US President Donald Trump has toyed with the idea of selecting and announcing Fed Chair Jerome Powell's replacement by September or October. That knocked an already battered dollar even lower as traders fretted about an erosion of Fed independence and as they moved to price in more US rate cuts this year. The dollar languished near a 3-1/2-year low on Friday and was headed for a 1.4 per cent weekly loss, its largest decline in over a month. For the year, the greenback is already down more than 10 per cent and if it stays that way in the next few days, that will mark its biggest first half-year fall since the start of the era of free-floating currencies in the early 1970s. Against a weaker dollar, the euro was perched near its highest in over three years at $1.1688. Sterling rose 0.03per cent to $1.3730. "Trump's desire to 'shadow' the Fed using a designated replacement for Chair Jay Powell isn't a good way to promote the perceptions of integrity and autonomy in US policymaking and, by extension, that of the reserve currency status of the US dollar," said Thierry Wizman, global FX and rates strategist at Macquarie Group. Adding to the Fed cut bets has been a raft of weaker-than-expected US economic data, with attention now shifting to Friday's release of the core PCE price index, the US central bank's preferred measure of inflation. US Treasury yields were steady in Asia after falling the previous session, with the two-year yield at 3.7418per cent and the benchmark 10-year yield last at 4.2554 per cent. In commodities, oil prices were set for a weekly decline with the Iran-Israel ceasefire holding and easing concerns over Middle East supply risks. Brent crude futures were up 0.41per cent at $68.01 a barrel while US crude rose 0.46per cent to $65.53 per barrel on Friday, but both were headed for a fall of more than 10per cent for the week. Spot gold fell 0.23per cent to $3,320.25 an ounce.
Perth Now
4 hours ago
- Perth Now
Asian shares rally while US dollar weakens
Asian shares have hit their highest level in more than three years as they tracked a Wall Street rally, though the dollar struggled on concerns about the Federal Reserve's independence and expectations for early rate cuts. Stock indexes worldwide look set to end the week on a positive note, with worries about tensions in the Middle East and uncertainty over tariffs and trade deals on the backburner for now. MSCI's broadest index of Asia-Pacific shares outside Japan touched its strongest level since November 2021 early in the session. It last traded 0.2 per cent higher and is set to clock a 3 per cent gain for the week. Japan's Nikkei jumped 1.5 per cent and surpassed the 40,000 mark for the first time in five months. Reasons for the upbeat mood included news that Washington has reached an agreement with Beijing on how to expedite rare earth shipments to the United States. US Treasury Secretary Scott Bessent also said on Thursday that he has asked Republicans in Congress to scrap the Section 899 retaliatory tax proposal from their tax and spending bill after Washington reached an agreement with Group of Seven industrial countries. "That was something that had been making some investors, especially foreign investors, nervous when that provision was passed by the House. So if that provision gets removed, then that allays one of the concerns from foreign investors," said Khoon Goh, head of Asia research at ANZ. "The accumulation of these various... positive developments all helped to contribute to the buoyant market mood we're seeing." European futures also gained, with EUROSTOXX 50 futures and DAX futures both up 0.6per cent, while FTSE futures advanced 0.16per cent. US stock futures were little changed, though Wall Street had on Thursday closed near record highs, further supported by expectations of imminent Fed rate cuts. Much of the focus for markets over the past two sessions has been on the prospect of an early change of guard at the Fed, after the Wall Street Journal reported that US President Donald Trump has toyed with the idea of selecting and announcing Fed Chair Jerome Powell's replacement by September or October. That knocked an already battered dollar even lower as traders fretted about an erosion of Fed independence and as they moved to price in more US rate cuts this year. The dollar languished near a 3-1/2-year low on Friday and was headed for a 1.4 per cent weekly loss, its largest decline in over a month. For the year, the greenback is already down more than 10 per cent and if it stays that way in the next few days, that will mark its biggest first half-year fall since the start of the era of free-floating currencies in the early 1970s. Against a weaker dollar, the euro was perched near its highest in over three years at $1.1688. Sterling rose 0.03per cent to $1.3730. "Trump's desire to 'shadow' the Fed using a designated replacement for Chair Jay Powell isn't a good way to promote the perceptions of integrity and autonomy in US policymaking and, by extension, that of the reserve currency status of the US dollar," said Thierry Wizman, global FX and rates strategist at Macquarie Group. Adding to the Fed cut bets has been a raft of weaker-than-expected US economic data, with attention now shifting to Friday's release of the core PCE price index, the US central bank's preferred measure of inflation. US Treasury yields were steady in Asia after falling the previous session, with the two-year yield at 3.7418per cent and the benchmark 10-year yield last at 4.2554 per cent. In commodities, oil prices were set for a weekly decline with the Iran-Israel ceasefire holding and easing concerns over Middle East supply risks. Brent crude futures were up 0.41per cent at $68.01 a barrel while US crude rose 0.46per cent to $65.53 per barrel on Friday, but both were headed for a fall of more than 10per cent for the week. Spot gold fell 0.23per cent to $3,320.25 an ounce.
