After trading hours on Wednesday, toasts of “kanpai” rang out across the bars of Tokyo’s Marunouchi financial district.

Not because the United States and Japan struck a trade deal, averting a damaging economic standoff and triggering a market rally on both sides of the Pacific. Because it was a workday, and the end of trading hours means it’s sake-o’clock.

Better than the Worst Case

President Donald Trump announced the “massive” trade agreement with Japan on his Truth Social platform late Tuesday, stating that it would introduce a 15% tariff on all Japanese imports to the United States. At the same time, the Land of the Rising Sun agreed to make $550 billion worth of investments stateside, he said.

While 15% tariffs would be nothing to toast in normal times, these are not those. Just over three months ago, Trump threatened Japan with a 24% tariff rate as part of his so-called “Liberation Day” that triggered a mass selloff in April. Japan, the fourth-largest economy in the world, sends 20% of its exports to the US, not to mention a whopping 37% of exports from its crucial auto sector (which faced a unique 27.5% tariff rate). A worst-case scenario for Japan on US trade would have knocked a full percentage point off of its economic growth, pushing the country into recession, economists warned. So it will take the deal. So, too, did financial markets:

• “While a negative from a macro point of view, the world can live with 15% or so tariffs,” Jefferies economist Mohit Kumar wrote Wednesday, adding that the average US tariff rate has risen to about 17% under Trump, up from 2.5% in 2024. Investors seem to agree, as the S&P 500 rose 0.8% and the Nasdaq 0.6%, both reaching new records, while Tokyo’s Nikkei 225 had an even more enthusiastic 3.5% rally Wednesday before rising another 1.6% on Thursday.
• Earnings season has shown that tariffs and tariff uncertainty have begun to wear on the bottom lines of US companies, something that more trade agreements with lower tariff rates could alleviate. General Motors said Tuesday that it took a $1.1 billion hit from tariffs, contributing to a 35% decline in net income in the three months through June, while shares in Texas Instruments plummeted 13% on Wednesday after the semiconductor supplier issued a guarded forecast and executives cautioned they didn’t know how much of a recent sales surge was because of customers trying to get ahead of future tariffs.

You’re Up, Europe: The US-Japan deal raised hopes that Trump’s administration will strike a deal with the European Union before an August 1 deadline imposed by the president. Indeed, EU member states were briefed by the bloc’s executive arm, the European Commission, on Wednesday about a potential deal that would also put 15% tariffs on exports to the US. As part of the negotiations, the EU is offering to drop its most-favored-nation rate on some US goods. The rate is a tariff formula applied to World Trade Organization members with which the EU doesn’t have a trade agreement; it currently averages 4.8%.

Amazon and Meta are hoping their latest wearable moves won’t come apart at the seams.

On Wednesday, the latter Big Tech firm unveiled a prototype of a next-gen wristwatch, just a day after Amazon announced its plans to acquire wearables startup Bee to bolster its own wristband ambitions. Both firms are hoping that integrating AI will propel their tech forward in the wearables space.

Wear the Wild Things Are

Both companies have already flirted with — only to ultimately abandon — the smartwatch space, though only Amazon has actually launched a wristband before. That would be the little-remembered Halo device, a wellness-focused smartwatch designed to push the e-commerce/media/cloud computing giant deeper into the healthcare space. Like many of Amazon’s big plans in the healthcare (and devices) space, its rollout of Halo hit some roadblocks, and the company ultimately discontinued the product as part of broader cost-cutting moves in early 2023 after roughly three years on the market. Meta, on the other hand, was developing a smartwatch product as recently as 2021, according to a Bloomberg report, though by 2022, it discontinued development amid similar cost-cutting moves, according to a Reuters report.

In the interim, Meta hasn’t given up on the wearables space — it has simply preferred being its users’ eyes and ears, launching and increasingly investing in wearable augmented reality glasses. Now, both companies seem poised to jump back in, this time coating their wearables with the patina of AI innovation:

• Meta’s prototype is less a wristwatch and more a wristband (it actually doesn’t have a clock face or touchscreen at all); instead of interacting with the wristband, users interact with other devices using the wristband. Essentially, Meta has utilized machine learning trained on 10,000 test subjects to develop a wristband that enables users to interact with their desktop computer (and, presumably, one day their Meta Glasses) through hand and wrist motions, effectively transforming their hands into a mouse and keyboard.
• The wearables made by the new Amazon subsidiary, Bee, meanwhile, are already on the market at $49.99 each and come with their own AI bells and whistles. The devices, which resemble those from FitBit, use a built-in microphone and AI software to listen and transcribe conversations, create reminders and to-do lists, and perform other tasks that you may or may not find more than a little intrusive.

An Apple Watch a Day: There are many reasons, of course, for wanting to get into the wearables space (beyond whatever value might lie in always listening to and recording user interactions). In the 10 years since its debut, Apple has sold approximately 281 million Apple Watches at an estimated value of $127 billion, according to a market researcher at IDC who recently spoke with WIRED for a feature on the device’s 10th anniversary. In other words: There’s a lot of money to be made in helping people count their steps throughout the day.

For all the sci-fi promises about blockchain transforming finance, the reality will be more mundane as thousands of ordinary instruments quietly move to digital ledgers.

On Wednesday, it was money market funds. Goldman Sachs and the Bank of New York (BNY) announced they’re allowing institutional investors to buy digitized tokens that mirror shares in the funds, making a $7 trillion industry in which liquidity is a key selling point even more liquid.

The Redemption Arc

Money market funds, if you’re new here, are a type of mutual fund that invests in things that are very liquid and very short-term. That means the most liquid thing of all, cash, as well as cash equivalents like commercial paper. When these funds invest in debt, it’s highly rated and comes with a short-term maturity, like US Treasurys or repo agreements. This makes them a relatively safe place to park cash in times of volatility, but the tradeoff for low risk and ability to quickly redeem your money is lower dividends when compared with more aggressive or longer-term investments.

There has, of course, been no shortage of volatile times in recent years. The Federal Reserve hiking interest rates in 2022 and the investor games of inflation-watch and tariff-watch that have since followed drew some $2.5 trillion into money market funds, helping swell the industry to $7 trillion. Wall Street’s latest blockchain integration goes beyond simply digitizing traditional finance. The real innovation lies in creating digital tokens that mirror money market fund shares, a move that could fundamentally change how these instruments work:

• Money market shares can only be redeemed during market hours, but the digital tokens that mirror those shares can be traded around the clock, buoying already high liquidity.
• The partnership will work by allowing BNY’s clients to invest in money market funds, with the ownership of those investments being recorded on Goldman’s blockchain platform, something the investment bank said will unlock the utility of money market funds “as a form of collateral and open up more seamless transferability in the future.”

Several of the biggest funds in finance — BlackRock, Fidelity, Federated Hermes — have signed up to participate in the launch, with BNY and Goldman’s asset management units joining as well.

Token Mention: The announcement comes just days after President Trump signed a law that introduces US-regulated stablecoins. Retail giants Walmart and Amazon, as well as Wall Street titans JPMorgan, Citigroup and Bank of America, have all signaled that they’re exploring the stablecoin space, which involves digital tokens typically pegged to the US dollar that can be used for transactions. The money market fund token, by contrast, pays a yield and acts as an investment; both cases are indicative of how blockchain is increasingly going to play a role in every aspect of finance.