Category: 3. Business

The Bank of Japan (BoJ) board members decided to maintain the short-term interest rate target in the range of 0.40%- 0.50%, following the conclusion of the two-day monetary policy review meeting on Thursday.

Such a decision was widely anticipated.

The Japanese central bank extended the pause into the fourth consecutive meeting after having hiked the interest rate by 25 basis points (bps) to 0.50% in January.

BoJ’s quarterly Outlook Report

Underlying inflation likely to stall due to slowing growth but gradually accelerate thereafter.

Underlying consumer inflation likely to be at level generally consistent with 2% target in second half of projection period from fiscal 2025 through 2027.

Risks to inflation outlook roughly balanced.

Risks to economic outlook skewed to downside.

Uncertainty over trade policy and its developments, impact on economic, price outlook remains high.

Japan’s economy recovering moderately albeit with some weakness.

Inflation expectations rising moderately.

Output, expoorts likely to move on weak note.

Consumption to resume moderate uptrend.

Risks to inflation outlook roughly balanced.

Real interest rates are at extremely low levels.

Must have no pre-conception in judging whether economy, prices moving in line with forecast.

Will conduct monetary policy as appropriate from perspective of sustainably, stably achieving 2% inflation target.

There is high uncertainty surrounding trade policy developments and their impact on economy.

Will continue to raise policy rate if economy, prices move in line with forecast, in accordance with improvements in economy, prices.

Board’s real GDP fiscal 2025 median forecast at +0.6% vs. previous +0.5%

Board’s real GDP fiscal 2026 median forecast at +0.7% vs. previous +0.7%

Board’s real GDP fiscal 2027 median forecast at +1.0% vs. previous +1.0%.

Board’s core-core CPI fiscal 2025 median forecast at +2.8% vs. previous +2.3%.

Board’s core-core CPI fiscal 2026 median forecast at +1.9% vs. previous +1.8%.

Board’s core-core CPI fiscal 2027 median forecast at +2.0% vs. previous +2.0%.

Market reaction to the BoJ policy announcements

USD/JPY extends losses toward 148.50 in an immediate reaction to the Bank of Japan’s (BoJ) rates on hold decision. The pair is trading 0.54% lower on the day at 148.66, as of writing.

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This section below was published on July 30 at 23:00 GMT as a preview of the Bank of Japan Interest Rate Decision.

• The Bank of Japan is expected to hold interest rates at 0.5% for the fourth consecutive meeting on Thursday.
• Markets will closely scrutinize the BoJ policy statement and the updated projections for hints on the timing of the next rate hike.
• The BoJ policy announcements are set to inject intense volatility around the Japanese Yen.

The Bank of Japan (BoJ) is set to hold the short-term interest rate at 0.5% following the conclusion of its two-day July monetary policy review on Thursday.

Amid the US-Japan trade deal optimism and uncertainty of the US tariff impact on the Japanese economy, markets will closely scrutinize the BoJ’s Monetary Policy Statement and the updated forecasts in its Quarterly Outlook Report for fresh signals on when the bank could resume its rate-hiking cycle.

The Japanese Yen (JPY) remains primed for a big reaction following the BoJ policy announcements.

What to expect from the BoJ interest rate decision?

The BoJ is widely expected to keep the policy rate at the highest level in 17 years for the fourth consecutive meeting in July.

The Japanese central bank is expected to revise up its inflation forecast for the current fiscal year, considering the persistent rises in rice and broader food costs, as Reuters reported on July 14, citing three sources familiar with the BoJ’s thinking.

Since then, Japanese Prime Minister Shigeru Ishiba’s ruling coalition faced a bruising defeat in upper house elections on July 20, and US President Donald Trump announced a trade deal with Japan on July 22.  

Despite increased inflation expectations, amid political instability-led potential for a weak Japanese Yen and Trump’s 15% tariffs-driven impact, the BoJ will likely stick to its wait-and-see stance in July.

The central bank would want to assess the impact of higher US tariffs on corporate wage growth and domestic consumption before adjusting its policy.

Meanwhile, the latest government data released on Friday showed that the Tokyo Consumer Price Index (CPI), which excludes volatile fresh food costs, rose 2.9% in July from a year earlier, slightly below the market forecast for a 3.0% increase. It followed a 3.1% rise in June.

Food inflation, excluding the cost of volatile fresh products, accelerated to 7.4% in July from 7.2% in June, per Reuters.

Even though core inflation in Japan’s capital slowed in July, it stayed well above the central bank’s 2% target, refuelling market expectations for another interest rate hike this year.

How could the Bank of Japan’s monetary policy decision affect USD/JPY?

BoJ Deputy Governor Shinichi Uchida delivered a cautious outlook on Japan’s economy during a speech on July 23, warning of sustained downside risks to growth and inflation outlook due to “extremely high” global trade uncertainty. 

His comments came after board member Junko Koeda recently argued for the need to monitor the second-round effects of rising rice costs.

Meanwhile, hawkish BoJ policymakers Hajime Takata and Naoki Tamura continued to advocate for the bank to resume rate hikes after a temporary pause.

Therefore, the language in the BoJ’s policy statement and Governor Kazuo Ueda’s words during the presser will hold the key to gauging the bank’s path forward on interest rates.

If the BoJ sticks to its data-dependent stance for a policy move, dismissing easing trade tensions and hopes of another rate hike this year, the JPY could see a fresh leg lower against the US Dollar (USD).

However, the odds of a rate hike by year-end could ramp up if the BoJ expresses concerns over elevated food costs alongside upside risks to inflation amid the US tariff impact. Such a scenario could fuel a fresh recovery rally in the Japanese Yen and a downtrend in the USD/JPY pair.

Any big reaction to the BoJ policy announcements could be short-lived as markets would await Governor Ueda’s press conference for fresh policy insights.

From a technical perspective, Dhwani Mehta, Asian Session Lead Analyst at FXStreet, notes: “Despite the latest pullback from the weekly high of 148.81, the USD/JPY pair retains its bullish potential, with the 14-day Relative Strength Index (RSI) still holding above the midline.”

“The pair could accelerate its corrective decline on a hawkish BoJ hold, with the immediate support seen at the 21-day Simple Moving Average (SMA) at 147.04.  Failure to resist above that level will open up further downside toward the 146.00 round number. The next healthy support aligns at the 100-day SMA of 145.70. Alternatively, buyers must scale the weekly high to resume the uptrend toward the July 16 high of 149.19. Further up, the 200-day SMA at 149.58 will test bearish commitments,” Dhwani adds.

• GBP/USD lost even more ground on Wednesday, falling for a fifth straight day.
• Cable traders have an increasingly steep hole to dig themselves out of.
• US economic data will take on newfound importance this week in the wake of a cautious Fed.

GBP/USD sank for a fifth straight session on Wednesday, falling as the US Dollar (USD) catches a broad-market bid after the Federal Reserve (Fed) held rates steady and stuck to its stubborn wait-and-see stance, trimming hopes for a September rate cut. With odds of a rate cut on September 17 flying out the window, newfound market pressure will be on a hefty raft of economic data coming out of the United States (US) throughout the back half of the trading week.

Forex Today: No changes expected at the BoJ meeting

US PCE inflation, due on Thursday, is expected to accelerate slightly, with analysts anticipating an uptick to 0.3% MoM in June compared to the previous month’s 0.2%. A resurgence of inflationary pressure is the last thing investors want, as it could spell doom for ongoing rate cut expectations.

Fed’s Powell: We have made no decisions about September

Friday’s NFP jobs report could add further fuel to rate hold fears. July’s NFP net employment gains report is expected to hold in positive territory after seasonal adjustments. However, the figure is expected to ease to 110K from June’s 147K.

GBP/USD price forecast

A fifth straight down day has put Cable on a collision course with the 200-day Exponential Moving Average (EMA) near 1.3131. Price action has pivoted firmly bearish after GBP/USD flubbed a bullish climb toward 1.3600, although new short entries will face challenges with technical oscillators already pinned in oversold territory.

GBP/USD daily chart

(Bloomberg) — US equity-index futures rose on robust earnings from megacap tech companies after a volatile session on Wall Street. The dollar steadied after gaining on Federal Reserve holding interest rates.

Contracts for the Nasdaq 100 rose 1.1% and those for the S&P 500 advanced 0.8% as shares of Microsoft Corp. and Meta Platforms Inc. surged in after-hours trading. Asian shares edged lower. South Korean equities fluctuated after the country reached a trade deal with the US. The Nikkei-225 rose 0.3% ahead of a rate decision by the Bank of Japan later Thursday.

Copper edged higher in London after President Donald Trump shocked the market by exempting refined metal from US import tariffs.

The S&P 500 fell 0.1% and Treasury 10-year yields rose around five basis points Wednesday. While the concerted pullback in stocks and bonds looked mild, it marked the worst Fed day since December. The dollar strengthened 0.8% as Fed Chair Jerome Powell said no decision had been made about easing policy in September. The US labor market “looks solid,” he said, while inflation remains above target.

The muted equity market response to the Fed hold was a sign investors have tempered expectations for imminent rate cuts. Instead, they’re leaning on resilient growth, an AI-fueled earnings boom, and the belief that tariffs will only trigger manageable goods inflation while leaving services inflation contained.

“To get that rate cut, the Fed will need to gain confidence that either inflation increases will be one-off and muted, or that inflation will continue to trend lower in the months and quarters ahead,” said Bret Kenwell at eToro.

On South Korea, Trump said he reached a trade deal that would impose a 15% tariff on its exports to the US and see Seoul agree to $350 billion in US investments.

Trump also said he would impose a 25% tariff on India’s exports to the US starting Friday and threatened an additional penalty over the country’s energy purchases from Russia. The rupee declined in offshore trading while contracts for the Nifty 50 erased their gains to decline as much as 0.5%.

Elsewhere in Asia, investors will be focused on a Bank of Japan rate decision.

Markets Live Strategist Mark Cranfield says:

The ruling Liberal Democratic Party needs to debate Prime Minister Shigeru Ishiba’s fate, which likely means that BOJ Governor Kazuo Ueda will strike a cautious tone today. That will fuel curve steepening for JGBs as inflation is sticky and the central bank is behind the curve in cooling it. Traders are pricing around 77% probability of a rate hike by the time of the December BOJ meeting.

Meanwhile, the Federal Open Market Committee voted 9-2 on Wednesday to hold the benchmark federal funds rate in a range of 4.25%-4.5%, as they have at each of their meetings this year. Governors Christopher Waller and Michelle Bowman voted against the decision in favor of a quarter-point cut.

Money markets pared bets on rate reductions this year and traders now see a less than 50% chance of a cut in September. The odds for a reduction in October dropped to around 85%, whereas they were fully priced-in before Powell began to speak.

“The next two months’ data will be pivotal and we see a path to a resumption of the Fed’s easing cycle in the autumn should tariff inflation prove more modest than expected or the labor market show signs of weakness,” said Ashish Shah at Goldman Sachs Asset Management.

In other economic data, US companies stepped up hiring in July, though the pace remained consistent with weaker labor demand. Private-sector payrolls increased by 104,000, according to ADP Research data. The median economist estimate called for a 76,000 gain.

The July employment report due Friday from the Bureau of Labor Statistics, which includes government positions, is expected to show job growth moderated and unemployment rose.

Inflation-adjusted gross domestic product increased an annualized 3% in the second quarter, according to preliminary government data out Wednesday. As solid as the pace was, economic growth averaged 1.25% in the first half, a percentage point cooler than the pace for 2024.

Corporate News:

Samsung Electronics Co.’s semiconductor division reported profit that fell far short of expectations, reflecting a deepening crisis at the world’s largest memory chipmaker. Chinese battery producer Contemporary Amperex Technology Co. Ltd. posted a 34% rise in profit for the second-quarter, with its outlook further buoyed by a blockbuster share sale in Hong Kong that will fund its global expansion. Meta Platforms is taking advantage of its lucrative advertising business and stepping up spending next year, with executives saying now is the time to seize on investment opportunities in artificial intelligence. Microsoft said it will spend more than $30 billion in the current quarter to build out the data centers powering its artificial intelligence services. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.8% as of 9:19 a.m. Tokyo time Hang Seng futures fell 1% Japan’s Topix rose 0.4% Australia’s S&P/ASX 200 fell 0.5% Euro Stoxx 50 futures rose 0.4% Currencies

The Bloomberg Dollar Spot Index was little changed The euro rose 0.3% to $1.1434 The Japanese yen rose 0.2% to 149.23 per dollar The offshore yuan was little changed at 7.2061 per dollar Cryptocurrencies

Bitcoin rose 0.7% to $117,949.92 Ether rose 1.1% to $3,811.95 Bonds

The yield on 10-year Treasuries was little changed at 4.37% Japan’s 10-year yield was unchanged at 1.555% Australia’s 10-year yield advanced two basis points to 4.28% Commodities

West Texas Intermediate crude rose 0.5% to $70.36 a barrel Spot gold rose 0.3% to $3,285.68 an ounce This story was produced with the assistance of Bloomberg Automation.

©2025 Bloomberg L.P.

Microsoft, the world’s second-most valuable company, is dumping enormous sums of money into its artificial intelligence efforts. At the same time, the company is earning money hand over fist. Investors are thrilled.

The enterprise software giant reported fiscal fourth-quarter results that exceeded expectations on Wednesday as the company races to acquire datacenters and talent, which continues to be investigated by investors. The company predicted its capital expenditure for the next fiscal year would top $100bn, a 14% increase from the year prior.

It’s the fifth quarter in a row that Microsoft has beaten Wall Street’s expectations. Shares in the company, which is celebrating its 50-year anniversary since it was founded by Bill Gates and Paul Allen in Albuquerque, New Mexico, in April 1975, are trading a near record of $513, up 22% since the start of the year.

The software giant’s stock rose more than 7% in extended trading on Wednesday.

Microsoft, like rivals Alphabet/Google and Amazon, is in an all-out race for datacenter capacity to meet demand for AI. Last week, Alphabet announced it will spend $85bn in capital expenditures in 2025, a $10bn increase on what it estimated at the start of the year. Amazon is looking to spend $100bn over the same period.

“Cloud and AI is the driving force of business transformation across every industry and sector,” said Satya Nadella, chairman and chief executive officer of Microsoft. “We’re innovating across the tech stack to help customers adapt and grow in this new era, and this year, Azure surpassed $75bn in revenue, up 34%, driven by growth across all workloads,” Nadella said in a statement.

Microsoft reported revenue of $76.4bn, against consensus estimates of $73.81bn, and earnings per share of $3.65, against estimates of $3.37. That corresponds to revenue growth of 18% year-over-year. Revenue in the same period a year earlier came in at $64.73bn.

The extraordinary spending on data centers, necessary to power AI products, comes as companies are increasingly outsourcing their computing demands to the cloud.

Before the earnings were released, Dan Ives, a financial analyst at Wedbush said Microsoft was on track to $4tn market value “shortly”, and $5tn over the next 18 months as shares moving up to $600 as companies accelerate their adoption of AI technologies.

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“This was a slam-dunk quarter for MSFT with cloud and AI driving significant business transformation across every sector and industry as the company continues to capitalize on the AI Revolution unfolding front and center,” Ives said in a statement after Microsoft’s numbers were released.

The extraordinary cost of hiring top AI talent is also coming into focus. OpenAI’s CEO, Sam Altman, has said Meta was offering $100m in signing bonuses to recruit talent from his company. Facebook parent Meta also reportedly offered a senior Apple engineer $200m to join its “superintelligence” team.

Microsoft, meanwhile, is reported to be offering high-level engineers a yearly salary of as much as $408,000, not including a one-time stock award of as much as $1.9m, plus an annual stock award of $1,476,000, according to Business Insider.

US authorities are warning consumers of Celsius energy drinks to check their cans after some were accidently filled with vodka.

The US Food & Drug Administration (USFDA) issued the warning for the Astro Vibe Blue Razz edition of the drink.

The mix-up came about after a packaging supplier mistakenly shipped empty Celsius cans to the vodka seltzer company High Noon, which filled them with alcohol.

High Noon is also recalling some of its Beach Variety packs which came from the same production line. No illnesses or adverse events have been reported for the impacted products, the USFDA added.

The recall affects two production lots, which the USFDA published on its website. The products were shipped to retailers in Florida, New York, Ohio, South Carolina, Virginia and Wisconsin, between 21 July and 23 July.

The recalled High Noon packs include the retail code UPC 085000040065 along with the following lot codes:

• L CCC 17JL25 14:00 to L CCC 17JL25 23:59

• L CCC 18JL25 00:00 to L CCC 18JL25 03:00

The Celsius cans include the retail code UPC 8 89392 00134 1 along with lot codes:

• L CCB 02JL25 2:55 to L CCB 02JL25 3:11

The lot codes are lasered on the bottom of cans.

“Consumers are advised to dispose of the Celsius Astro Vibe energy drink, Sparkling Blue Razz Edition cans with the impacted lot codes, and not consume the liquid” the USFDA said.

High Noon Beach Variety packs with different lot codes are not affected by the recall and are safe to consume, it added.

EPA

‘Outrageous outage’

Principal findings

In this Mendelian randomization study, we investigated the causal effects of glucokinase activator (GKA) on cardio-cerebrovascular diseases (CVDs) and the mediating role of circulating metabolites. GKA was found to be significantly associated with a reduced risk of atrial fibrillation (AF) (OR = 0.71, 95% CI: 0.54–0.95, P = 0.019) and stroke (OR = 0.97, 95% CI: 0.96–0.98, P = 4.82 × 10^-5), with no evidence of heterogeneity or horizontal pleiotropy. However, no definitive causal relationship was identified between GKA and heart failure, coronary artery disease, or myocardial infarction; although the IVW P—value for CAD was < 0.05, the weighted median result weakened the statistical significance. In exploring GKA’s interactions with circulating metabolites, 36 metabolites were found to be significantly associated with GKA after Bonferroni correction (threshold P = 2.98 × 10⁻⁴). In particular, within the category of circulating particle sizes, GKA was observed to increase the average diameter of VLDL particles (β = 0.33 [95% CI 0.18, 0.48]; P = 1.85 × 10⁻⁵) and decrease the average diameter of HDL particles (β = − 0.30 [95% CI − 0.43, − 0.16]; P  = 1.27 × 10⁻5). Further analysis of these metabolites’ effects on CVDs showed that, after Bonferroni correction, only one metabolite was associated with AF, with little evidence for a stroke association. Notably, a larger average VLDL particle diameter was inversely related to AF risk (OR 0.90 [95% CI 0.85, 0.96]; P = 8.85 × 10⁻⁴), and mediation analysis revealed a significant indirect effect of GKA on AF risk mediated by VLDL particle diameter (OR 0.88 [95% CI 0.78, 0.99]; P = 0.047), accounting for 11.64% of the total effect. Collectively, these findings highlight the potential cardiovascular benefits of GKA, particularly in relation to AF, and underscore the mediating role of specific circulating metabolites in this pathway.

The association between GKA and CVD incidence

The relationship between glucokinase activator (GKA) and atrial fibrillation (AF) has attracted increasing attention in the field of cardiovascular research. Multiple previous studies have explored this association from different perspectives and provided insights into the underlying potential mechanisms. In terms of glucose metabolism, some studies have confirmed that abnormal glucose homeostasis can trigger electrical and structural remodeling in the atria, thereby increasing susceptibility to AF [30]. Oxidative stress and inflammation induced by hyperglycemia play crucial roles in the development of AF and lead to alterations in ion channel function and atrial fibrosis [31]. Research has shown that hyperglycemia-induced changes in the atrial extracellular matrix promote the development of AF, and improving glycemic control with drugs such as GKA might mitigate these structural alterations [32]. As a regulator of glucose metabolism, GKA is highly likely to intervene in these pathophysiological processes. The increase in glucokinase activity promoted the efficient utilization of glucose in key tissues, such as the heart and pancreas, which might contribute to maintaining normal electrical activity in the atria and reducing the risk of AF.

Some studies have also explored the potential role of GKA in modulating the risk of AF. Research has indicated that GKA can regulate the activity of ion channels in cardiomyocytes, which is essential for maintaining normal cardiac electrical conduction [33]. By stabilizing the cardiac electrical conduction system, GKA might reduce the incidence of arrhythmias such as AF. In addition, Garcia et al [34] proposed that GKA might have a protective effect on the endothelial function of the heart. Endothelial dysfunction is associated with the occurrence of AF, and the improvement in endothelial function mediated by GKA might help reduce the risk of AF. Previous reports have suggested that GKA might affect the regulation of the heart by the autonomic nervous system, which plays a key role in the initiation and maintenance of AF [35]. By modulating autonomic nerve tension, GKA might contribute to maintaining a stable cardiac rhythm. Moreover, at the gene expression level, some studies have confirmed that GKA can influence the expression of certain genes involved in cardiac electrophysiology and provide a potential molecular mechanism for its anti-AF effect [36]. In our Mendelian randomization study, which used genetic variants as instrumental variables, we found that GKA was significantly associated with a reduced risk of AF. Compared with previous studies, this causal relationship provides more robust evidence for the potential protective effect of GKA against AF.

Previous studies have clearly demonstrated the association between glucose metabolism and stroke. Patients with impaired glucose tolerance have a greater risk of stroke [37]. With respect to the role of glucokinase activator (GKA) in stroke, multiple studies have explored its potential benefits. Some studies have shown that GKA can enhance endothelial function [38]. Endothelial cells play crucial roles in maintaining vascular health. GKA activated glucokinase in these cells, promoting the production of nitric oxide, which could relax blood vessels. These findings are highly important for preventing ischemic stroke. In ischemic stroke models, GKA can reduce neuronal damage [39] and improve glucose metabolism in neurons, enabling them to better withstand ischemic insults. Moreover, some studies have indicated that GKA can regulate lipid metabolism, reduce the accumulation of cholesterol and triglycerides in blood vessels, and thus decrease the formation of atherosclerotic plaques in the cerebral vasculature [40]. At the gene level, studies have shown that GKA can regulate the expression of certain genes related to angiogenesis in the brain [41]. This regulatory effect might contribute to the development of collateral blood vessels and enhance the blood supply to ischemic areas. Although genetically proxied GKA exposure demonstrated a statistically significant but modest reduction in stroke risk (3% relative risk reduction), the clinical impact at an individual level is likely minimal. However, this magnitude of risk reduction may yield substantial public health benefits through decreased absolute stroke events in large populations. This dichotomy underscores the necessity of evaluating interventions through both individual effect sizes and population-attributable impact for prevalent conditions like stroke. The association provides genetic evidence implicating GKA pathways in stroke risk modulation, warranting large-scale trials to quantify absolute benefits in target populations.

The neutral effects of genetically proxied GKA on HF, CAD, and MI may arise from several factors. First, GKA’s cardiometabolic effects likely exhibit pathway specificity: while robustly influencing VLDL size and AF/stroke risk (linked to lipoprotein metabolism and atrial remodeling), its impact on atherosclerosis-related pathways (e.g., plaque inflammation, thrombosis) or myocardial contractility appears limited. Second, limited statistical power cannot be overlooked. The smaller effect sizes of GKA on these outcomes, combined with potential heterogeneity in genetic instruments across diverse cardiovascular endophenotypes, might have constrained our ability to detect true causal effects. Finally, GKA-associated metabolites may not fully capture key biological intermediates driving coronary or myocardial pathogenesis, as GKA’s primary hepatic action may influence pathways less relevant to these endpoints than to AF and stroke. Larger GWAS and expanded biomarker profiling are needed to clarify these relationships.

Associations between GKA and circulating metabolites

The relationship between glucokinase activator (GKA) and the 36 identified circulating metabolites has been a subject of great concern in the field of metabolic research. In in vitro cell models and in vivo animal models, some scholars have shown that GKA treatment significantly increases the levels of cholesteryl esters in large HDL, cholesterol in large HDL, and total lipids in large HDL. Mechanistically, they discovered that GKA upregulated the expression of key genes involved in HDL biosynthesis, such as APOA1, which encodes apolipoprotein A-I, a major component of HDL. This upregulation enhanced the assembly and secretion of HDL particles, thereby leading to an increase in HDL-related metabolite levels. These results are consistent with our findings, further validating the positive impact of GKA on HDL-related lipid metabolism [42]. The use of isotope-labeled lipid tracers revealed that GKA treatment elevated the levels of triglycerides in very large VLDLs, triglycerides in chylomicrons, extremely large VLDLs, and total lipids in chylomicrons and extremely large VLDLs. The mechanism underlying this increase was related to enhanced lipid synthesis in the liver and increased lipid uptake by the intestine. Moreover, GKA promoted the expression of lipid transporters in the intestine, which facilitated the absorption of dietary lipids into chylomicrons [43]. In a clinical study, type 2 diabetes patients were treated with GKA for 12 weeks, and their plasma metabolite profiles were analyzed. The results revealed a significant increase in the concentration of large HDL particles, accompanied by an increase in the levels of cholesteryl esters in large HDL and cholesterol in large HDL. Researchers have proposed that GKA induces the activation of glucokinase in pancreatic β-cells, resulting in increased insulin secretion, which in turn enhances the reverse cholesterol transport pathway. This enables cholesterol to flow out from peripheral cells into HDL particles, contributing to the increase in HDL-related metabolites [44]. GKA can increase the levels of phospholipids in large VLDLs and phospholipids in very large VLDLs [45]. Through proteomic analysis, this study identified several proteins involved in phospholipid synthesis and metabolism that were upregulated by GKA. These proteins include enzymes such as phosphatidylcholine synthase, which is crucial for the synthesis of phosphatidylcholine, a major phospholipid in VLDL particles. The increase in phospholipids was associated with improved VLDL particle stability and reduced susceptibility to oxidation, which may be beneficial for cardiovascular health. There is also evidence indicating that GKA has a certain influence on the metabolism of free cholesterol in different lipoprotein particles. By combining in vitro and in vivo research methods, some scholars have demonstrated that GKA treatment increases the levels of free cholesterol in large HDL and free cholesterol in chylomicrons and extremely large VLDLs. They reported that GKA enhanced the activity of cholesterol ester transfer protein (CETP), which promoted the transfer of cholesterol esters from HDL to other lipoprotein particles in exchange for free cholesterol. This increased the availability of free cholesterol in these lipoprotein particles, leading to an increase in free cholesterol levels [46]. GKA improved glucose metabolism and promoted insulin secretion. Insulin can activate the production of VLDL-related proteins, thereby increasing the concentrations of large VLDL particles and very large VLDL particles as well as triglyceride levels. This finding was also consistent with our research results [47]. Jiang et al. explored the impact of GKA on glutamine metabolism [48]. Research has shown that GKA treatment increases the level of glutamine in plasma. They reported that GKA activated the expression of genes involved in glutamine synthesis, such as glutamine synthetase. The increase in glutamine levels was associated with improved nitrogen metabolism and increased antioxidant defense mechanisms since glutamine is an important precursor for the synthesis of glutathione, a key antioxidant molecule. An in vitro and in vivo experiment investigated the effect of GKA on hepatic lipid metabolism [49]. The study revealed that GKA enhanced the utilization of glucose in the liver. Moreover, the levels of key enzymes involved in triglyceride synthesis, such as fatty acid synthase, decreased, accompanied by a reduction in de novo lipogenesis. As a result, the production of triglyceride-rich VLDL particles is likely to decline, which directly impacts VLDL-related metabolites in the circulation. This finding was different from our findings, suggesting that there may be unique regulatory mechanisms that require further exploration. In conclusion, the combination of our study and previous research provided evidence for a significant association between GKA and lipid-related circulating metabolites.

The mediating effect of circulating metabolites on the association between GKA and AF

Previous studies have shown that the size of very-low-density lipoprotein (VLDL) particles is closely linked to the risk of atrial fibrillation (AF) [50]. Typically, appropriately sized VLDL particles are essential for maintaining normal heart metabolism and function. Glucokinase (GCK), an important regulatory enzyme, may regulate the average diameter of VLDL particles through complex metabolic pathways [51, 52]. On the one hand, large VLDL particles, due to their excessive size, have difficulty penetrating intact endothelium, thus presenting a lower risk of direct deposition in arterial walls compared to small VLDL particles [53]. On the other hand, their smaller surface area-to-volume ratio makes them less susceptible to oxidative modification, thereby reducing oxidative stress [54]. When GCK functions properly, it balances VLDL particle assembly and metabolism, maintaining the average diameter within a range that is beneficial for heart health. In this range, VLDL particles can effectively transport lipids such as cholesterol and triglycerides to cardiomyocytes, providing energy, maintaining heart rhythm and function, and reducing AF risk.

Strengths and limitations

Dorzagliatin, a glucokinase activator developed in China, has been officially marketed. Our study investigated the potential long-term impacts of glucokinase activators (GKAs) on cardiovascular and cerebrovascular outcomes and conducted a preliminary analysis of potential mediators.

One of the major strengths of our study was the application of the Mendelian randomization approach. Specifically, this method effectively reduced the risks of confounding factors and reverse causation bias, thereby compensating for the limitations of observational studies. By leveraging this method, we can obtain more reliable insights into the relationships under investigation. Another strength was the use of multiple large-scale datasets in our analysis. This substantially enhanced the statistical power of our study and enabled us to detect relatively subtle yet potentially significant effects. These datasets provide a solid foundation for us to identify possible associations between GKAs and cardiovascular and cerebrovascular diseases and to analyze the potential mediating roles of circulating metabolites.

The comprehensiveness of our study allowed us to uncover complex relationships and potential mediating pathways that might remain undetected in more restricted analyses. We further explored the uncovered relationships and pathways by taking into account different factors and variables, which contributed to a more in-depth understanding of the subject. Furthermore, we employed a series of sensitivity analyses to evaluate the stability of our research findings. These analyses were crucial for validating the assumptions of Mendelian randomization and instilled confidence in the stability of our results.

However, we acknowledge certain limitations and suggest that our results should be interpreted with due consideration of these factors. Although our findings reflected the relationship between glucokinase activators and cardiovascular and cerebrovascular events to some extent, it is important to emphasize that this relationship more closely approximates the impact of lifelong physiological glucokinase activation on cardio-cerebrovascular outcomes rather than that of pharmaceutical intervention. The effect sizes obtained do not equate to the actual clinical efficacy in treating these diseases. Therefore, caution is warranted when directly extrapolating Mendelian randomization results to all populations or equating them entirely to pharmaceutical therapeutic effects.

Our study was confined to participants of European ancestry, which might limit the generalizability of our findings to other ethnic groups. Given the potential differences in genetic architecture, metabolic profiles, and cardiovascular disease epidemiology across diverse populations, validation of these findings in non-European cohorts is critical to establishing the broader applicability of our results. Future studies with larger sample sizes, more refined genetic instruments, deeper understanding of the relevant biological pathways, and explicit inclusion of multi-ethnic cohorts may uncover associations that were not detected in our current analysis and strengthen the generalizability of the observed relationships.

US President Donald Trump signed an executive order ending a global tariff exemption used by shoppers of low-cost goods.

The order, signed on Wednesday, comes into force on 29 August and broadens earlier presidential action that specifically targeted cheap products from China and Hong Kong to now cover the rest of the world.

The de minimis exemption had allowed goods valued at $800 or less to enter the US without paying any tariffs. US consumers relied on the exemption to buy cheap clothes and household items from online commerce sites like Shein and Temu.

The White House says the global exemption was being used to “evade tariffs and funnel deadly synthetic opioids” to the US.

The administration already ended the de minimis exemption for Chinese goods on 2 May but the rest of the world was spared until now.

While China accounted for the vast majority of shipments using this exemption, Canada and Mexico were also significant sources of low-cost goods being shipped into the US, which had been exempt from duties.

When the new rules into force, packages will face the same tariff rate as that of traditional goods from the country of origin.

Congress had planned to end the de minimis exemption for all countries when it passed the One Big Beautiful bill earlier the month. But an end to the global exemption wasn’t set to come into force until July 2027.

Trump used emergency presidential powers to override the deadline set by Congress and move it significantly forward to a month from now. This was done “to deal with national emergencies and save American lives and businesses now,” the White House said.

The White House said opioid smugglers were using the de minimis exemption to send illicit drugs into the US because they were less likely to be checked by customs officials.

It also said some shippers were circumventing duties by falsely reporting the country of origin for goods entering the US.

The rule does not affect personal items Americans carry with them from foreign travel valued at $200 or less and it does not affect gifts valued at $100 or less.

• Order Backlog came to € 45 billion. Book-to-Bill ratio at 1.3x
• Revenues and EBITA growth in line with expectations and the sustainable growth path envisaged in the Industrial Plan
• Net Result before extraordinary transactions € 273 million (+44.4% vs 1H2024)
• Improvement of Free Operating Cash Flow (FOCF), demonstrating the effectiveness of the actions undertaken
• Group Net Debt improves to € 2,173 million (-27.6% vs 1H2024)

^{(*) Not including the contribution from the Underwater Armaments & Systems (UAS) business (like-for-like perimeter)
(**) 2024 restated figure as a result of the revision of the KPI with reference to the valuation of strategic investments}

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Leonardo’s Board of Directors, convened today under the Chairmanship of Stefano Pontecorvo, examined and unanimously approved 2025 first half results. “Execution of the Industrial Plan is progressing in line with the Group’s strategic priorities. First-half 2025 results confirm the Group’s solid industrial momentum, with a further reduction in debt, validating the effectiveness of the actions undertaken. Based on first half performance and growth expectations, we have revised our 2025 guidance upwards, setting new targets for orders, FOCF, and net debt. We are strengthening our competitive positioning across domestic and international markets, reaffirming our role as a leading player in the ongoing consolidation of the Defense industry. The development of joint ventures with Rheinmetall and Baykar is advancing, and the GCAP program has entered its operational phase. Recent M&A transactions in the cybersecurity domain mark another step forward in the expansion of our product portfolio, underscoring our commitment to inorganic growth“, stated Roberto Cingolani, Chief Executive Officer and General Manager of Leonardo.

1H2025 financial results

The good performance of the Group continued in the first six months of 2025, with the gradual strengthening of its competitive positioning in both domestic and international markets supported by a further growth of volumes and a solid profitability. The good performance of the period, compared with the same period of the prior year, is even more significant inasmuch as it does not include the contribution from the Underwater Armaments & Systems (UAS) business, which had been recognised under the Defence Electronics & Security sector until 2024 and sold to Fincantieri in early 2025. 

In the first six months of 2025 New Orders reached €bil. 11.2 (+8.9% compared to the figure of the comparative period, +9.7% on a like-for-like perimeter), confirming the continuing strengthening of the core businesses as a result of the commercial successes and good positioning of the Group’s products, technologies and solutions, as well as the ability to effectively cover key markets in a market environment where demand for security remains high. The book-to-bill stood at 1.3.

Revenues came to €bil. 8.9 showing a significant increase (+11.7% compared to the figure of the comparative period, +12.9% on a like-for-like perimeter), and EBITA was €mil. 581 (+10.9% compared to the restated (^*) figure of the comparative period, +15.0% on a like-for-like perimeter), in line with expectations and the sustainable growth path envisaged in the Industrial Plan of Leonardo. 
Free Operating Cash Flow, negative for €mil. 408 as a result of the usual interim trend that is characterised by cash absorptions in the first part of the year, showed an improvement (+18.7% compared to the figure of the previous half year, +19.0% on a like-for-like perimeter) demonstrating the effectiveness of the actions undertaken. The FOCF performance and the consideration received as part of the sale of the UAS business, equal to about €mil. 446, result in a positive effect on the Group Net Debt, down by about 27.6% compared to 30 June 2024.

^{(*) The figure for the comparative period is presented in restated form as a result of the revision of EBITA, starting from the 2024 Financial Statements, with reference to the valuation of strategic investments.}

Key Performance Indicators (KPIs) 

^{(*) The 2024 figure is presented in restated form as a result of the revision of the KPI with reference to the valuation of strategic investments. Specifically, starting from the 2024 Financial Statements, the share of net result of strategic investees, which is already recognised within the Group’s EBITA as part of their valuation at equity, now no longer includes any non-recurring, extraordinary or non-routine items in the income statement; in line with Leonardo’s policies and the approach already applied to companies consolidated on a line-by-line basis, these items are deducted from EBITA in order to show profit margins that are not affected by volatility elements. The revision described above impacted also EBITDA and the performance indicators ROS and ROI, while it had no effects on other indicators.} 

As indicated above, following the finalisation of the sale to Fincantieri of the Underwater Armaments & Systems (UAS) line of business, occurred on 14 January 2025, the figures of the first six months of 2025 do not include the contribution from such business that, vice versa, was recognised within the Defence Electronics & Security sector until 2024. In order to make the Group’s operational performance more comparable, for some performance indicators we report below the figure of the comparative period – and the related change compared to the current period – excluding the contribution of the UAS business (like-for-like perimeter):

^{(*) 2024 restated figure as a result of the revision of the KPI with reference to the valuation of strategic investments.}

2025 Guidance 

The good performance of the Group continued in the first half of the year, with a gradual strengthening of its competitive position in both domestic and international markets, supported by further volume growth and solid profitability.
The increased demand for defence and security, linked to the geopolitical scenario, generates positive outlook for the defence sector.
In this context, based on the performance recorded in the six months to June and the revision of estimates for the second half of the year, in light of greater visibility on the prospects for order acquisition, the Group updates its full year 2025 Guidance as disclosed in March 2025 as follows:

• Increase in new order intake guidance from ca. € 21 billion to ca. € 22.25 – 22.75 billion, factoring in the acquisition of jumbo orders
• Upward revision of the FOCF guidance from ca. € 870 million to ca. € 920-980 million, as a result of good operating performance and cash advances related to additional orders
• Reduction of the Group’s Net Debt, from ca. € 1.6 billion to ca. € 1.1 billion thanks to the positive impact of stronger cash generation and the postponement to 2026 of some M&A transactions expected during the year
• The guidance in terms of revenues of approximately €18.6 billion and EBITA of approximately € 1,660 million are confirmed

This is summarised in the table below:

^{Based on USD/€ exchange rate at 1.08 and €/GBP exchange rate at 0.86
(1)    Based on the current assessments of the impacts of the geopolitical situation also on supply chain, inflationary levels and the global economy, subject to any further significant effects.
(2)    Assuming the increased dividend payments of €0.52 per share, M&A transaction of ca. €100 million, DRS shareholders remuneration, new leasing contracts and other minor movements.}

Commercial performance

• New Orders reached €bil. 11.2, highlighting an increase compared to the first six months of 2024 (+8.9%, +9.7% on a like-for-like perimeter), driven by Defence Electronics & Security, especially the European component, and by the excellent performance of Aeronautics (+53.4% against the comparative period). The contribution to new orders from Space and Cyber & Security Solutions was also increasing. The level of new orders for the six months is equal to a book to bill (the ratio of New orders to Revenues for the period) of about 1.3. 
• The Order Backlog came to €bil. 45 ensuring a coverage in terms of production exceeding 2.5 years.

Business performance

• Revenues (€bil. 8.9) increased compared to the first six months of 2024 (+11.7%) in all the business sectors, despite the change in the perimeter related to the sale of the UAS business (+12.9% on a like-for-like perimeter). Worth noting is the contribution from the Defence Electronics & Security, Helicopters and Aeronautics.
• EBITA (€mil. 581), increased significantly compared to the first six months of 2024 in almost all sectors (+10.9% against the restated figure), reflects the growth of volumes and the solid performance of the Group’s businesses. The period was particularly affected by the result of the Helicopters and the Defence Electronics and Security sectors, which more than offset the drop in Aeronautics, which was affected by the expected performance of the Aerostructures and of the strategic investee GIE ATR. An improvement was also reported by the Space sector, which started to benefit from the efficiency-improvement actions on the manufacturing segment of the Space Alliance. The good performance of the Group is even more evident if we exclude the contribution of the UAS business from the comparative figure (+15.0% on a like-for-like perimeter).
• EBIT (€mil. 432) was affected by the improvement of EBITA and reported an increase compared to the first half-year of 2024 (+10.8%). Non-recurring costs stood at a level close to that of the previous year and reflected the accruals for litigation on international legacy programmes, including the NH90 one. 
• The Net Result before extraordinary transactions (€mil. 273, +44.4% compared to the first six months of 2024) benefitted from the performance of EBIT and from the improvement of the net financial costs.
• The Net Result (€mil. 542) showed a decrease against the comparative figure (€mil. 555) which included the capital gain (€mil. 366) recognised following the fair value measurement of the Telespazio group performed for the purpose of the line-by-line consolidation of the latter. The data for the first six months of 2025, equal to €mil. 542, included, in addition to the Net Result before extraordinary transactions, the capital gain recognised following the sale of the UAS business to Fincantieri, equal to about €mil. 283, partially offset by the costs of the disposals finalized in the previous periods. 

Financial performance 

• FOCF in the first six months of 2025, negative for €mil. 408, showed an improvement compared to the performance of the previous year’s comparative period (negative for €mil. 502, negative for €mil. 504 on a like-for-like perimeter), confirming the positive results reached thanks to the effect of initiatives to strengthen operational performance and collection cycle, a careful investment policy in a period of business growth with stringent priorities, an efficient financial strategy and the management of working capital. The figure, which is however impacted by the usual interim trend characterised by cash absorptions during the first part of the year, is also affected, compared with the first six months of 2024, by higher dividends received, higher investments and an acceleration in supplier payments to underpin the growth path.
• The net change in loans and borrowings included the repayment, occurred in March 2025, of the bonded loan of Leonardo S.p.a. issued in 2005 and amounting to €mil. 500, which reached its natural maturity date, partially offset by the drawing of the €mil. 260 Sustainability-Linked loan granted by the European Investment Bank (EIB).

The Group Net Debt, equal to €mil. 2,173, decreased by about €bil. 0.8 against June 2024 thanks to the strengthening of the Group’s cash generation and to the cash-in of the total amount of €mil. 446 arising from the sale of the UAS business. 

Compared to 31 December 2024 (€mil. 1,795) the figure increased mainly as a result of the abovementioned FOCF performance, net of the effect of the abovementioned sale of the UAS business, in addition to the dividends paid for an amount of €mil. 327 (€mil. 296 of which related to Leonardo S.p.a., which, in line with that communicated on the occasion of the “2025-2029 Industrial Plan”, paid a dividend almost doubled compared to the 2024 data equal to € 0.52 per share in 2025 vs € 0.28 per share in 2024.

Changes in the Group Net Debt

 

 

Key performance indicators by Sector

Leonardo confirms its growth path in all core Sectors of its business. The business sectors are commented on below in terms of business and financial performance:

^{(*) 2024 restated figure as a result of the revision of the KPI with reference to the valuation of strategic investments.
(**) 2024 figure not including the contribution from the Underwater Armaments & Systems (UAS) business (like-for-like perimeter)}