Japan loses control in parliament, Iran resumes nuclear talks, Hamas may exit Gaza truce—geopolitical risks loom over global markets.
Middle East on Edge, Iran Resumes Nuclear Talks, Japan Faces Political Crisis
On July 21, 2025, the world witnessed a series of major geopolitical shifts that could significantly impact global markets. Hamas threatened to withdraw from ceasefire talks, Iran unexpectedly agreed to resume nuclear negotiations, while Japan slipped into a “minority government” status after the latest election.
Hamas Threatens to Exit Ceasefire Negotiations with Israel
Hamas announced it is considering pulling out of ongoing ceasefire negotiations with Israel following several unproductive rounds. Tensions in Gaza are escalating as mediators struggle to find common ground. The threat of renewed conflict is closely watched by investors and analysts worldwide.
Iran Agrees to Resume Nuclear Negotiations with Europe
Iran’s Foreign Ministry confirmed it will host a new round of nuclear talks with representatives of the E3 group (UK, France, Germany) on November 25 in Istanbul. The agenda will focus on reviving the 2015 nuclear deal, including nuclear restrictions and lifting of economic sanctions. This development is seen as a positive step amid prolonged nuclear tensions.
Japan Slips into Minority Government in Both Houses
Following the Upper House election, Japan’s ruling coalition – the Liberal Democratic Party (LDP) and Komeito – has officially lost control of both the Lower and Upper Houses. Combined with significant yen volatility, Japan’s financial markets now face increased concerns over fiscal risks and the outcome of upcoming Japan–US trade negotiations.
Some experts believe Prime Minister Shigeru Ishiba may face pressure to resign if he fails to form a new coalition soon.
US Economic Outlook and Global Policy Developments
According to CME “Fed Watch” data, the US Federal Reserve has a 95.3% probability of holding interest rates steady in July. Meanwhile, President Trump is aggressively pursuing new trade policies, intensifying pressure on US–China relations. Two scenarios suggest a possible direct meeting between Trump and Chinese President Xi Jinping at the APEC 2025 summit.
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