Japan’s bond market is bracing for one of its most volatile weeks this year as a mix of political trouble, central bank signals, and U.S. drama come crashing in at the same time. According to Reuters,

Japan’s upper house election delivered deadlock over direction, exposing the nation’s fragile leadership and rising populist undercurrents in a political moment demanding clarity and strength.

Japan said on Tuesday the trade agreement it struck with the U.S. cleared uncertainties on U.S. trade policies but continued attention needs to be given to risks of those policies putting downward pressure on the Japanese economy.

Japan’s Prime Minister Shigeru Ishiba faces a tough test in an upper house election this month as his minority government struggles after its major defeat in last year’s snap election.

Unlike the European Union, the Japanese government has made no indication it plans to impose any kind of reciprocal tariff on the U.S.

Analysts at Bank of America said that the Japan deal "looks like a reasonable blueprint" for other auto-exporting countries like South Korea.

As part of a trade deal reached this week, Japan agreed to invest $550 billion in projects across strategic U.S. industries, including energy, semiconductor manufacturing and shipbuilding. The White House said Trump would have final say over where the money goes and that the U.S. would keep 90% of profits on any investments.

Trump may get a $550B investment vehicle similar to a sovereign wealth fund with an investment from the Japanese government.