The news: Founder of Softbank Masayoshi Son is considering creating a joint US-Japan sovereign fund, according to a report by the Financial Times, to make large-scale investments in tech and infrastructure across the US.
The numbers: The joint fund has reportedly been raised at the highest political levels in Washington and Tokyo, and would reportedly need around US$300 billion ($465 billion) in initial capital with significant leverage to be effective.
The context: While a formal proposal is yet to be drafted, the Trump administration and Japanese negotiators are reportedly edging closer toward a deal. The Japanese Prime Minister Shigeru Ishiba told local media he expects that a planned meeting between the two countries during the G7 meetings in mid-June would be a “milestone” in the talks.
The talks suggest that the wealth fund’s structure would see the US Treasury and Japanese ministry of finance as joint owners and operators of the fund, both holding a significant stake. The vehicle could later be opened to other limited partner investors. “The theory is that Bessent is looking for revenue streams for the Treasury that do not involve raising taxes, and however far out this joint fund may sound, it would in theory provide that,” one source told the FT. Bessent reportedly wants to craft a deal that could become a “blueprint for a new sovereign-to-sovereign financial architecture, while Japan wants a properly governed covenant that protects it from the ad hoc decisions of Oval Office politics.”
AloJapan.com