Bull market in US stocks welcomes a super catalyst! Japan's $550 billion investment blueprint in the US is released, covering areas such as nuclear energy, AI, and semiconductors.

The Japanese government has unveiled a potential investment project list for its massive $550 billion US investment tool, giving the public a glimpse into which specific proposals in the United States could be funded as part of the key mechanism of the US-Japan trade agreement. With such a large-scale investment in the US by Japan acting as an important catalyst for the current super bull market in US stocks, the market may overlook the so-called "AI bubble argument" and continue to rally under the influence of this substantial investment. According to a situation report released by the Japanese Ministry of Economy, Trade and Industry on Tuesday, Japanese large companies interested in launching projects cover a wide range of fields, including nuclear energy, semiconductors, shipbuilding, artificial intelligence, critical minerals, quantum computing, and more. Companies preliminarily listed in this list include SoftBank Group, Westinghouse Electric, and Toshiba, with potential project investments ranging from $350 million to as high as $100 billion. Hours before the release of this important statement, US President Donald Trump praised the alliance between the US and Japan on Tuesday and expressed appreciation for Japan's new Prime Minister Katsunobu Kato. The two then signed agreements and relevant documents on trade and critical minerals cooperation, aiming to formalize some elements of the US-Japan cooperation agreement that was previously led and negotiated by former Japanese Prime Minister Shizo Abe, including Japan's commitment to invest $550 billion worth of projects in the US. "I really want to thank Japan for making huge investments in the United States," Trump said aboard the aircraft carrier "George Washington" in Yokosuka, south of Tokyo. "They are important investors in our country, and we welcome that," he emphasized. He also added that Katsunobu Kato informed him that Toyota Motor Corporation will continue to build large automobile manufacturing plants in various parts of the US, with an investment scale exceeding $10 billion, Trump said in an interview. Although Toyota Motor Corporation is not mentioned in the Japanese Ministry's investment situation report, Trump repeatedly mentioned Toyota in the interview. It is worth noting that US Commerce Secretary Howard Lutnick met with many executives of the listed Japanese large companies later on Tuesday, which may reveal more Japanese companies that will make large-scale investments. "You are at the starting line. That's you. You are the foundation of everything. It's really, very exciting," Lutnick said in an interview. "It's not often that you can see so much power gathered in one room," he added. In terms of the total size of the investment projects, energy-related projects appear to be substantial on the US-Japan investment list. The project to build AP1000 nuclear reactors and small modular reactors by Westinghouse Electric is estimated to be worth up to $100 billion and will involve many Japanese suppliers and numerous power operators, including Mitsubishi Heavy Industries. Another project involving Hitachi GE Vernova's small modular nuclear reactors is also described as worth up to $100 billion. Analysts say that the US government will ultimately decide which projects will receive investment funds, and while Japan is expected to have some say, if Japan does not provide funding for the investment projects selected by Trump, Trump retains the option to reinstate higher tariffs. According to a memorandum of understanding between the two countries, this major investment fund of up to $550 billion is aimed at promoting economic growth and national security interests of both countries through investment in semiconductor, pharmaceutical, metal, critical mineral, shipbuilding, energy, artificial intelligence, and quantum computing. This $550 billion "super investment fund" is the most crucial element behind the July US-Japan trade agreement, under which Trump significantly reduced US import tariffs on Japanese cars from 27.5% to 15%. Trump also set tariffs on many other key Japanese export products at the same level. Will the record-breaking US stocks receive a "divine boost"? The "fact list" released by the Japanese Ministry of Economy, Trade and Industry covers sectors from energy to AI/critical minerals, with a preliminary list of companies including SoftBank, Westinghouse, and Toshiba, these three Japanese super giants, with individual projects ranging from $350 million to as high as $100 billion (such as AP1000 and SMR), which means real industrial capital spending, especially for the US AI computing industry chain covering nuclear/Power equipment, basic AI infrastructure, and semiconductor manufacturing chains, which can be considered significant positive factors. The investment committee set up by the US will lead the selection and can raise tariffs/adjust allocations if Japan does not contribute, increasing enforcement constraints; at the same time, it promises faster access and permits for federal land, water, and electricity, which is very favorable for accelerating the landing of AI infrastructure and large-scale chip manufacturing projects. In terms of the transmission to the US macroeconomy, especially for the significant driving force of the US manufacturing capacity and the entire non-farm employment market that has been weak in recent years, this rare large-scale foreign investment and the Trump administration's so-called "America First" policy framework will push US companies to focus more on purchasing domestic goods. From current disclosures, the massive $550 billion investment brought by Japan will focus on nuclear energy and power grid infrastructure, semiconductor manufacturing and high-end equipment, critical minerals/battery materials, and a wider range of AI infrastructure construction in manufacturing sectors in the US, undoubtedly bringing capacity expansion and a surge in stock market valuation to these manufacturing sectors in the US. In terms of the framework and allocation mechanism of investment projects, according to multiple disclosed memorandums of understanding (MOUs) and policy interpretations, each selected project will establish an SPV, first distributing 50/50 until reaching the "agreed recovery/apportionment amount" (deemed allocation), and then splitting by 90% (US)/10% (Japan); compared to the July White House's campaign slogan of "America taking 90% of the profit," the latest disclosure appears to be more "staged."