Key Points

• Crypto Regulation Stalemate: U.S. House narrowly advanced debate on key crypto regulation bills after a record-long vote, exposing deep Republican divisions and casting doubt on the passage of a unified framework.
• TSMC Hits Record Profit: Taiwan Semiconductor posted a 61% surge in Q2 profit on robust AI chip demand, but trade tensions and potential U.S. tariffs pose risks to its outlook.
• Seven & i Shares Plunge: Japan’s Seven & i tumbled over 7% after Couche-Tard withdrew its $47 billion takeover bid, citing lack of constructive engagement from the Japanese retailer.
• Japan’s Exports Decline: Exports fell for a second month, down 0.5% in June, with U.S.-bound shipments plunging 11.4% as 25% tariffs weigh, raising fears of a technical recession.

Crypto Regulation Bills Advance After Record House Vote

The U.S. House narrowly approved debate rules for three key crypto regulation bills after a record-setting 10-hour vote, highlighting deep divisions within the Republican conference. The GENIUS Act, already passed by the Senate, along with the CLARITY Act and a bill barring a Federal Reserve-issued digital currency, faced resistance from both conservative holdouts and moderate Republicans over last-minute changes.

Despite late-night negotiations and direct intervention from President Trump, doubts remain over whether the GOP can align enough to pass final versions, dampening the crypto industry’s hopes for a swift regulatory framework.

TSMC Profit Surges 61% to Record High on AI Chip Demand

Taiwan Semiconductor Manufacturing Company posted a 61% year-on-year jump in second-quarter profit, reaching NT$398.27 billion, as AI chip demand drove record revenue of NT$933.80 billion ($31.7 billion). High-performance computing, including AI and 5G applications, accounted for 60% of sales, up from 52% last year.

TSMC expects full-year revenue to grow 30% in U.S. dollar terms, supported by surging demand for advanced nodes below 7nm, which made up 74% of wafer revenue. However, uncertainties linger over U.S. tariff threats and macro headwinds, despite stable customer demand so far in the second half of 2025.

Seven & i Shares Plunge as Couche-Tard Abandons $47 Billion Takeover Bid

Shares of Japan’s Seven & i Holdings tumbled 7.38% Thursday after Canada’s Alimentation Couche-Tard withdrew its $47 billion takeover offer, citing a “persistent lack of good faith engagement.” The bid, which valued Seven & i at ¥7 trillion, was initially raised by over 22% to $18.19 per share after a prior rejection in 2024.

Analysts noted that Japanese protectionism and Seven & i’s strategic importance made the deal unlikely. The retailer, operator of 7-Eleven stores, expressed disappointment at the termination, while trading was briefly halted before resuming mid-morning in Tokyo.

Japan’s Exports Fall Again as Tariffs Weigh, Raising Recession Fears

Japan’s exports contracted 0.5% year over year in June, marking a second straight monthly decline and reversing economists’ forecast for a modest gain. Exports to the U.S. fell 11.4%, their steepest drop since 2020, with auto shipments plunging 26.7% in value as carmakers absorbed 25% U.S. tariffs through price cuts.

Analysts warned that the additional tariffs, set to take effect August 1, could push Japan into a technical recession after its economy contracted in Q1.

With no trade deal in sight, political risks are mounting ahead of the July 20 Upper House elections.

Conclusion

This week highlights a policy-driven pivot across global markets: U.S. regulatory clarity in crypto, AI-led earnings at TSMC, trade‑driven softness in Japan’s export figures, and a disrupted M&A deal in Tokyo. With the backdrop of escalating trade friction and shifting geopolitical risks, investors should watch for central-bank responses and legislative developments.

Market sentiment remains sensitive to policy moves, making selective positioning in tech growth stocks and export‑exposed sectors prudent as macro forces continue to shape momentum.

Investment Insights

Volatility across global markets is being driven by trade tensions, corporate earnings, and sector-specific disruptions. TSMC’s record profit underscores the sustained AI-driven semiconductor demand, reinforcing long-term bullish sentiment for advanced chipmakers despite tariff risks. Meanwhile, ASML’s cautious 2026 outlook highlights geopolitical uncertainty in tech supply chains.

Central banks’ shift toward domestic gold purchases reflects a hedging strategy against currency risk and geopolitical shocks, benefiting gold miners in producer nations. Automotive and retail sectors face structural pressures — GM’s expansion signals resilience in U.S. manufacturing, while Japan’s weak exports and Tesla’s leadership shake-up raise near-term recession and EV-demand concerns.

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Balfour Capital Group is a distinguished global boutique investment management firm with $400 million AUM and over 1000 Clients.

Disclaimer: This newsletter provides financial insights for informational purposes only. It does not constitute financial advice or recommendations for investment decisions.