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Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up here. Around two decades ago, relations between India and Japan warmed substantially under the influence of Prime Minister Shinzo Abe, who saw New Delhi as a natural partner in defending a rules-based order from the disruptive challenge of China. Asia’s second- and third-largest economies are having another coming-together moment, with China again the pull factor. Economic and political links grew under Abe, but gradually — as typified by a stalled project for Japan’s bullet-train technology to connect New Delhi with the city of Ahmedabad. Where much of Abe’s vision was abstract, current Japanese Prime Minister Sanae Takaichi aims to forge more concrete ties. That means economic security in particular as she seeks to insulate Japan from pressure from Beijing. On Monday, China expanded export controls on Japanese companies. During Takaichi’s first trip to India this week, she and Prime Minister Narendra Modi presided over the signing of more than 100 agreements between businesses, including pledges to cooperate on semiconductors and develop robust supply chains for energy and critical minerals. 
Takaichi with Modi in New Delhi yesterday.
Photographer: Prakash Singh/Bloomberg
Closer defense ties are planned as each tries to manage territorial disputes with China on their borders. Takaichi and Modi may have also shared notes on working with President Donald Trump under a far more demanding US administration focused on the homeland. One example: The US military headquarters in Hawaii was just rebranded from “Indo-Pacific Command” to “Pacific Command.” Like Abe, her former mentor, Takaichi still sees India as integral to maintaining the status quo in the Asia-Pacific region. Unlike the US, Japan probably won’t browbeat New Delhi over its military and energy ties to Russia, since Tokyo also partially relies on Russia for fuel. Takaichi even appears to be developing a similar personal rapport with Modi to Abe. After speaking alongside the Indian premier yesterday, she said they’d promised “to work together as brother and sister.” — Alastair Gale 
Russian President Vladimir Putin and Modi in New Delhi on Dec. 5.
Photographer: Prakash Singh/Bloomberg
Global Must ReadsSome leading European powers now accept that ships transiting the vital Strait of Hormuz will have to pay fees to Iran and Oman, a view also held privately by some Gulf Arab officials, sources say. Saudi Arabia’s oil exports have surged to close to their pre-war levels as the kingdom starts getting its tankers through the strait again following an interim peace deal between the US and Iran. 
Saudi ships emerge outside Hormuz.
Trump and his allies are renewing a push to reshape the Federal Reserve, exploring ways to remove members to make way for the president’s own picks, even after the Supreme Court blocked an effort to fire Governor Lisa Cook. We look at what may happen next given that the justices didn’t make a decision about whether Trump ultimately can remove Cook from office, only that she had to receive a reasonable opportunity to defend herself against allegations. Trump said he sees the need for some standards on artificial intelligence but wants to avoid burdensome restrictions that may hamper US firms competing with China. He also suggested he was unaware of the extent of his digital-asset holdings but said there was nothing illegal about them following disclosures about his crypto windfall as opponents question whether he benefits financially from his presidency. The audacious task of getting Russia’s space ambitions anywhere close to their past glory falls to Dmitry Bakanov, the head of Roscosmos. Picked by President Vladimir Putin in 2025, he has a mandate both straightforward and herculean: reverse a slide that’s left Russia far behind the US and China in rocket launches, satellite deployments and deep-space exploration, even as the country remains at war in Ukraine. 
A monument of the Soyuz rocket in Baikonur city.
Photographer: Kirill Kudryavtsev/AFP/Getty Images
Senator Flávio Bolsonaro is seeking to distance himself from punitive US trade measures that became associated with his family’s lobbying of Trump in defense of his father, an effort that has hurt the conservative candidate’s election bid. In an 86-page submission, the eldest son of the jailed former President Jair Bolsonaro urged the Trump administration not to impose new duties on Brazilian exports before the October election. NATO members are struggling to coalesce around a joint statement for their summit next week due to disagreements over projects to extend the alliance’s fuel pipelines to eastern Europe and the duration of financial support for Ukraine. Argentines overwhelmingly disapprove of how President Javier Milei handled a corruption scandal involving his former cabinet chief Manuel Adorni, according to a new poll published days after the onetime aide resigned. 
Karina Milei, Adorni (center) and Javier Milei at the National Congress in Buenos Aires on Dec. 3.
Photographer: Anita Pouchard Serra/Bloomberg
European Central Bank President Christine Lagarde said she won’t rule out leaving her current position early to participate in French politics. Acting President Delcy Rodríguez is facing mounting political fallout from last week’s twin earthquakes, with nearly half of Venezuelans saying holding new elections is more urgent than rebuilding after the disaster. Don’t miss from Bloomberg Weekend: Colum Murphy writes about how China is selling a softer image of Xinjiang through tourism. Liam Knox looks at patriotism in the US and Walter Frick at dollar dominance. Subscribe to the newsletter here. Sign up for the Washington Edition newsletter for news from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day
Heat in some of North America’s largest population centers strained electricity supplies, prompting the biggest US grid operator to declare a level 2 alert that’s one notch shy of forced power outages. About 152 million people from Kansas to Maine were under extreme heat warnings and more than 150 temperature records may be threatened, tied or broken in the eastern half of the US today. And FinallySome 8,000 seafarers who are not from the Persian Gulf have been stranded at sea for months during the US-Iran war, data from a UN agency show. The fate of the sailors — often from lower-income countries, such as the Philippines and India — is a reminder that the global economy is heavily dependent on individuals who at times must go to extraordinary lengths and face incredible risks to keep trade flowing. 
A Suezmax tanker near Basra in a still taken from video shot by the ship’s captain.
Photographer: Raman Kapoor
Pop Quiz (no cheating!). In which country did two junior hires at a consulting firm allegedly access the bank account of the prime minister? Send your answers to balancepower@bloomberg.net More from Bloomberg
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Friday, July 3, 2026
A coming together
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