One week after the joint U.S.-Japan intervention to support the country’s embattled yen, an initial rally appears to be waning as the currency drifts lower. 

The coordinated involvement from the Treasury and BoJ had initially lifted the yen as high as 155 to the dollar, down from just above 163 beforehand. 

But since then, it has wavered, giving up almost half of those gains to settle around 158.50 to the dollar, seven days after the move was announced on July 31. 

The yen’s fundamentals remain under scrutiny, with market watchers now turning their eye to domestic policy changes rather than government-backed support measures. 

Robert Sockin, chief U.S. economist at PGIM, is “not convinced” the strategy will work, writing in a note published Wednesday. 

“Yes, the intervention is no doubt squeezing out short yen positions in the short term, but I’m skeptical that it will work in reversing the JPY weakness trend by itself…and it may backfire spectacularly,” he wrote. 

Should it backfire, Sockin added that speculators might amplify the reversal by aggressively selling yen and Treasurys together to force the BoJ and Fed into precautionary rate hikes. 

The coordinated intervention is a rare U.S. effort to support another major currency and underscored Washington’s concern that prolonged yen weakness could fuel inflation in Japan, pressure other Asian currencies and destabilize global markets. 

BofA said in a recent note that the objective of the central banks in the short-term is to break ¥155, but that level was touched only briefly before moving lower again.

Treasury Secretary Scott Bessent acknowledged in an interview with CNBC last week that intervention alone would not determine the currency’s direction.

“You can give market signals with intervention, but it’s policy that turns it,” he said, adding that the U.S. participated because it was optimistic about Japan’s policy path.

— CNBC’s Luke Fountain also contributed to this report.

Oil was in choppy trade on Friday, as markets assess the implications of the interim U.S.-Iran deal and signs that shipping activity through the Strait of Hormuz is recovering.

International benchmark Brent crude futures for August fell 0.45% to $79.49 a barrel. U.S. West Texas Intermediate futures for July declined 0.31% to $76.36 per barrel.

Vice President JD Vance said tankers with more than 12 million barrels crossed the strait overnight.

“The Iranians, for the second night in a row, did not shoot at any ships in the Strait of Hormuz,” Vance told reporters. “So far, they are honoring their end of the commitment.”

Separately, OPEC Secretary General Haitham Al Ghais told CNBC in an exclusive interview that the organization does not expect oil demand to peak in the foreseeable future, while also rejecting forecasts from the International Energy Agency that point to an upcoming supply glut.

“[We focus] on fundamentals and not putting many ifs and buts in our forecasts, but rather focusing on actual numbers,” he said.

Oil prices are likely to trade between $75 and $82 a barrel in the near term, with Brent roughly down 36% from its peak during the conflict, Tiago Lacerda, a market analyst at Axi, told CNBC in an email.

“Attention shifts quickly to whether the physical reopening actually follows major shipping lines have yet to resume transits and insurance rates remain elevated, suggesting the market is cautious about the speed of normalization,” Lacerda said.

— CNBC’s Spencer Kimball contributed to the report.

Hi, this is Evelyn, writing to you from Beijing. Welcome to the latest edition of The China Connection — a succinct snapshot of what I’m seeing and hearing from local businesses.

U.S. President Donald Trump has left Beijing after a highly anticipated two-day visit with Chinese President Xi Jinping. Fanfare aside, what’s changed for business?

After a momentous Trump-Xi summit in Beijing last week with over a dozen American executives in tow, the U.S. and Chinese readouts agree on one phrase: constructive strategic stability.

But what does that really mean?

From an economic and trade perspective, the term amounts to “a form of commercial détente,” James Zimmerman, chairman of the American Chamber of Commerce in China, told me.

In practical terms, it signals intent to talk and creates room to resolve disputes without a return to trade war uncertainty — a boost for business confidence, he said.

China emphasized that the framework would set the tone for at least three years, or the rest of Trump’s presidency.

“This is a fundamental change from the previous unilateral definition of strategic competition,” said Hai Zhao, a director of international political studies at the Chinese Academy of Social Sciences, a state-affiliated think tank.

He said that the two countries could use the months before Xi’s planned visit to the U.S. on Sept. 24 to lay the groundwork for greater cooperation on fentanyl, immigration, increased human interaction and tourism.

Rubio, who is also serving as interim security advisor, is the “designated interlocutor” right now, Zhao said. “So there’s no reason China [would not] invite him on this trip and work with him [in] the future.”

Beijing also hopes that Trump can keep anti-China forces at bay domestically even after the midterm elections in November, and preserve bipartisan support for stable U.S.-China relations, Zhao said.

Second, Beijing has made its bottom line on Taiwan clear.

Xi warned Trump that the island — which the Chinese leader described as the biggest issue in U.S.-China relations — could put the bilateral relationship into “great jeopardy” if mishandled.

Trump, meanwhile, pushed back against the idea that Taiwan should pursue independence, especially with U.S. backing, according to an interview with Fox News that aired Friday afternoon, while urging both sides to “cool it.”

The comments offered a much clearer stance on Taiwan than during the Biden administration, when the White House had to reaffirm the longstanding U.S. position after the president’s comments hinted otherwise.

Third,…

Gulf states issued a joint statement on Thursday condemning Iran’s “blatant” and “criminal” attacks against their energy infrastructure, signaling a readiness to act in “self defense” in the future.

The Gulf states stressed that attacks launched from Iraqi territory by armed factions and proxies loyal to Iran were a particular grievance, and a breach of international law.

“While we value our fraternal relations with the Republic of Iraq, we call on the Iraqi government to take the necessary measures to immediately halt the attacks … toward neighboring countries,” the joint statement by the United Arab Emirates, Kuwait, Bahrain, Saudi Arabia, Qatar and Jordan commented Thursday,

An end to such attacks is necessary “in order to preserve brotherly relations and avoid further escalation,” according to the statement.

The Gulf states reaffirmed their “full and inherent right to self-defense against these criminal attacks,” in accordance with Article 51 of the Charter of the United Nations, which guarantees the right of states to self-defense, individually and collectively, in the event of aggression.

They also reserved the right “to take all necessary measures to safeguard our sovereignty, security, and stability.”

Iran’s Gulf neighbors have been repeatedly targeted and hit by Iranian drones and missiles as part of the Islamic Republic’s retaliatory strikes against the U.S. and Israel’s bombardment since late February.

The attacks, launched both from within Iran and outside by allied groups loyal to the regime, have damaged oil and liquefied natural gas (LNG) terminals, causing several years’ worth of costly repairs in some cases.

It’s not the first time the Gulf states have issued strongly-worded statements condemning Iranian attacks on energy infrastructure and facilities, which are seen as part of Tehran’s strategy to get its neighbors to persuade the U.S. and Israel to halt their military operation.

But the joint statement and mention of “self-defense” signals a shift in tone from Iran’s Gulf neighbors, who have encouraged a de-escalation of tensions and have — up until now — taken a more neutral and conciliatory position on the U.S. and Israel’s war.

Iran has both apologized for attacks against its neighbors and justified them, telling CNBC that U.S. military bases in neighboring territories were “legitimate” targets.

There have been strong signs that the Gulf’s collective patience has been wearing thin. Gulf officials have warned “a price must be paid” for the attacks, which have set back the Gulf’s economic development by years and damaged the region’s reputation as a safe haven for business and tourism.

India’s trade negotiators will reschedule their planned visit to Washington, D.C., aimed at firming up an interim trade deal with the U.S., a person familiar with the development told CNBC.

The development comes after the U.S. Supreme Court struck down U.S. President Donald Trump’s tariffs as illegal on Friday. Within hours, Trump invoked Section 122 of the Trade Act of 1974 to first impose a 10% global import tariff, before increasing that to 15%.

The “meeting will be rescheduled at a mutually convenient date,” the source told CNBC Sunday. India and the U.S. are of the view that the visit “be scheduled after each side has had the time to evaluate the latest developments and their implications.”

CNBC has reached out to India’s Ministry of Commerce and Industry for a comment.

India’s chief negotiator, Darpan Jain, and his team were scheduled to start the three day-meeting in the U.S. later this week.

India is currently facing a 25% reciprocal tariff, which was due to be cut to 18% after the two sides agreed to an interim deal earlier this month, with room for alterations.

“In the event of any changes to the agreed-upon tariffs of either country, the United States and India agree that the other country may modify its commitments,” read the joint statement issued on Feb. 6, by the U.S. and India.

At this stage, it appears that India, like other countries, will be facing a 15% tariff in addition to the most-favored-nation status rates (usually around 2-3%), said Ajay Srivastava, founder of the Global Trade Research Initiative and a former Indian trade negotiator.

Since the Feb. 6 announcement, both sides had been meeting virtually to discuss the path forward, according to a local media report. The in-person meetings, planned for this coming week, with the U.S. Trade Representative, Ambassador Jamieson Greer, were seen as the precursor to the finalization of the legal text of the agreement between India and the U.S.

India’s Commerce Minister Piyush Goyal said Friday that the interim trade agreement between the two nations would likely be signed in March and implemented in April.

“The 18% tariff negotiations were based on a certain premise of some benefits which is now gone. Now, both sides have to rethink their strategy, and the U.S. has to deal with more pressing issues,” Srivastava said.

Alibaba Group has released its newest AI model series, featuring enhanced capabilities, as it faces intensifying competition in China’s AI space with several models launched in the past week. 

The Qwen3.5 AI model comes in an open-weight version, which allows users to download, run, fine-tune, and deploy it on their own infrastructure. Alibaba also released a “hosted version,” meaning the model can run on Alibaba’s own servers.

Both models were made available on Monday, the eve of the Chinese New Year, and come just a week after Alibaba released a new AI model designed for robots.

The company highlighted that Qwen3.5 offers improvements in performance and cost and was built with “native multimodal capabilities,” enabling the models to understand text, images and video simultaneously within one system.

Leaning into a major AI trend this year, the model also supports new coding and agentic capabilities and is compatible with open-source AI agents like those from OpenClaw, which recently surged in popularity.

AI agents are systems that can independently take actions and complete multi-step tasks on a user’s behalf with minimal supervision.

These agents and their abilities have garnered a lot of attention in recent weeks, after American AI company Anthropic released new agent tools. The potential for these agents to replace the work of software as a service companies, amongst others, has rocked markets.

Alibaba’s local competitors such as ByteDance and Zhipu AI also released upgraded models in the past week aimed at supporting more agent capabilities.

The company said that its new Qwen3.5 open-weight model comes with 397 billion parameters — variables that shape how an AI system learns and reasons. While less than its previous flagship model, the company said the latest model showed significant improvement based on self-reported benchmark evaluations.

Alibaba provided benchmark tests showing that Qwen-3.5’s performance was on par with leading models from OpenAI, Anthropic and Google DeepMind, though the comparisons were self-reported.

Meanwhile, it also released a “hosted model” called the Qwen-3.5-Plus through its cloud platform Model Studio. Alibaba said this version also demonstrated performance on par with leading competitors. CNBC could not independently verify those claims.

The new Qwen3.5 models also support 201 languages and dialects, up from the previous generation’s 82. 

Alibaba is expected to release more open-weight models during this Chinese New Year, Lin Junyang, technical lead of Alibaba Cloud’s Qwen team said in a social media post.

Following the release of Anthropic’s latest Claude AI agent tools, other American AI giants have been accelerating the development of agentic capabilities. OpenAI CEO Sam Altman said Sunday that the creator of the OpenClaw would…

This report is from this week’s CNBC’s UK Exchange newsletter. Like what you see? You can subscribe here.

The dispatch

Compass is that rare beast —  a British company that is a genuine world leader in its field.

The world’s biggest contract caterer, which annually serves 5.5 billion meals in schools, colleges, workplaces, hospitals and sporting venues in more than 25 countries, is considered a well-run business.

Accordingly, its trading updates tend not to excite, routinely consisting of news on organic sales growth, margin improvements and — with workplace catering operations gradually being outsourced around the world — new business wins.

Last week’s update, though, brought something more eyebrow-raising as Compass announced that, from April 1, it will change the currency in which its shares are traded from sterling to the U.S. dollar.

The company explained that having reported in dollars since October 2023, the measure would align its share price trading currency with its reporting currency, “reducing FX volatility in the share price and simplifying the investment case for global investors.”

Cue hand-wringing over how Compass — which derives around three-quarters of its revenues in dollars — could be the next big U.K. company to abandon London for the New York Stock Exchange.

Protests from Compass that it would continue to pay dividends in sterling, unless shareholders elect to receive them in dollars, fell on deaf ears.

Compass was, in fact, taking advantage of a relatively recent change to the so-called “ground rules” governing membership of indices overseen by FTSE Russell, part of LSEG, the owner of the London Stock Exchange.

Announced in March 2025, and coming into force last September, it allowed for companies whose shares trade in dollars or euros “to be considered for potential inclusion to the FTSE U.K. Index Series.”

In doing so, London has shown considerably more flexibility than some other major financial centers. The New York Stock Exchange, for example, insists that all NYSE-listed shares are quoted, traded and settled exclusively in dollars.

The first company to take advantage of the rule change, in January this year, was InterContinental Hotels Group, the parent of the Holiday Inn and Crowne Plaza hotel brands, which derives some 80% of its revenues and operating profits in dollars. If anything, it is even more British than Compass, dating back 249 years in the country. It is also proud of having registered the U.K.’s first trademark — the famous Bass red triangle — in 1875.

‘The accounts were not acceptable’

In a sense, changing the currency in which a company’s shares are traded is the logical next step in a process that…