Good morning and welcome back to FirstFT Asia. In today’s newsletter:

• US and Japan announce first projects under $550bn deal

• China’s push to develop brain implant tech

• The truth about population decline

Washington and Tokyo have unveiled the first three industrial projects in the US to receive financing under a $550bn deal struck last year that protected Japan from the worst of President Donald Trump’s tariffs.

What to know: The plans, worth a combined $36bn, followed months of negotiations and marked the first step in Japan’s commitment to act as chief financier for projects in critical sectors of the US economy. The biggest of the projects is a $33bn, 9.2 gigawatt natural gas power plant in Ohio, led by Japan’s SoftBank Group, which Trump described on his Truth Social platform on Tuesday as the “largest in history”. The other two are a $2.1bn deepwater crude oil export facility in Texas and a $600mn synthetic industrial diamond factory in Georgia.

The $550bn deal: Under the trade pact signed in July, Japan pledged to invest in, provide loans or offer state-backed loan guarantees for $550bn of projects in the US by 2029, the end of Trump’s second term. In exchange, Trump agreed to reduce tariffs on Japanese exports, which would have hit Japan’s all-important automotive industry especially hard, from 25 per cent to 15 per cent. Should Japan delay or decide not to invest in the projects, it faces punishment in the form of raised tariffs or “catch-up” payments. Read the full story.

Here’s what else we’re keeping tabs on today:

• South Korea: A Seoul court will deliver its verdict in former president Yoon Suk Yeol’s insurrection trial over his failed attempt to impose martial law in 2024. Yoon faces the death penalty or life imprisonment if convicted.

• US foreign policy: Trump convenes the first meeting of his Board of Peace in Washington.

• Economic data: Australia publishes January employment data and Malaysia reports monthly inflation figures.

• Monetary policy: Central banks in Indonesia and the Philippines announce interest rate decision.

How should you navigate global economic risks this year? Join us today for a live Ask an Expert Q&A with Chris Giles, the FT’s economics commentator. Post your question here.

Five more top stories

1. Spain has become the first country to openly mark its claim in the race to succeed Christine Lagarde as president of the European Central Bank. Madrid’s move came hours after the FT reported that a person familiar with Lagarde’s thinking expects her to leave before her eight-year term as president expires in October 2027. Here’s more on the ECB succession race.

2. Trump has renewed his attack on UK Prime Minister Keir Starmer’s plan to transfer ownership of the Chagos Islands to Mauritius, as he highlighted the potential use of the Diego Garcia military base in any strikes on Iran.

3. Saudi Arabia’s state-owned AI company Humain has invested $3bn into Elon Musk’s xAI. The investment deepens Riyadh’s ties with the tech billionaire as the kingdom attempts to diversify its economy and become a global AI hub.

• More AI news: David Silver, one of Britain’s top AI researchers, is raising $1bn for a new company aiming to build “superhuman intelligence” in a deal led by Sequoia Capital.

4. A top White House official has said Federal Reserve economists should be “disciplined” for publishing a report showing US businesses and consumers were shouldering the bulk of the costs from Donald Trump’s tariffs. The comments from Kevin Hassett, director of the National Economic Council, were the Trump administration’s latest broadside against the Fed.

5. Volkswagen has attracted bids from top private equity funds including Blackstone, EQT and CVC for its Everllence division, bolstering its plans to sell off the shipping engines unit. The division is being valued at between €5bn and €6bn by prospective buyers.

News in-depth

China’s push to foster medical technology champions to rival US groups such as Elon Musk’s Neuralink is beginning to show results, with one Shanghai start-up moving to human trials within a few years of its founding. NeuroXess, which develops brain chips that enable communication between people and machines, recently reported that a paralysed patient was able to control a computer cursor within five days of implantation.

We’re also reading . . . 

• Imran Khan: In his bitter fight with his jailers in Pakistan, the country’s former cricket captain and prime minister has received the backing of his former opponents on the pitch.

• ‘Alone in Japan’: Tom Feiling’s new book on Japan’s demographic crisis presents a compelling argument about a society in need of urgent change.

• Cuba: The country’s private sector is thriving as a two-tier economy takes root in a once-egalitarian society. Michael Stott reports from Havana.

Chart of the day

A favourite argument why declining fertility rates are potentially catastrophic is that “dependency ratios” — the proportion of people over 65 to those aged 15-64 — will soar. But this argument and others about the dangers of falling fertility deserve much closer scrutiny, writes Martin Wolf.

Take a break from the news . . . 

The pashmina is back. The cashmere shawl had its heyday in the ’90s when it was elevated to It-girl-staple status by the likes of Gwyneth, Nicole and Marie-Chantal of Greece. Now it’s back finding favour with a younger cohort of A-listers and influencers and being deployed in imaginative ways.