Bloomberg Daybreak: Asia Edition US-Japan Trade Deal Details, AI Anxiety Lingers
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Feb 18, 2026 Jed Ellabrook, portfolio manager specializing in AI-driven market disruption. Isabel Reynolds, Tokyo bureau chief covering Japan-U.S. trade and politics. They discuss Japan’s $36B investment tranche and major energy projects in Ohio, Georgia and Texas. They dig into tariffs, private funding versus guarantees, geopolitical optics with Washington, and how AI volatility is roiling markets and shifting winners in infrastructure and software.
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Japan Investment Mostly Private With Guarantees
- Japan's $36 billion first tranche likely relies mainly on private funding supported by loan guarantees rather than direct government spending.
- Isabel Reynolds warns we need more detail to know how much is truly new versus repackaged commitments.
Geopolitics Keeps Japan Committed
- Japan wants to stay on good terms with President Trump and is unlikely to abandon the $550 billion pledge despite domestic unease.
- Reynolds says strategic reliance on the U.S. for defense reduces the chance of Tokyo rejecting the relationship even if resentments grow.
Position For AI Winners Not Just Software
- Expect markets to punish software companies proactively as AI threatens long-duration growth and pricing power.
- Jed Ellabrook suggests looking to AI infrastructure and related suppliers as alternate investment plays.