Hegseth calls Japan indispensable in the face of Chinese aggression

TOKYO (AP) — U.S. Defense Secretary Pete Hegseth called Japan on Sunday an "indispensable partner" in deterring growing Chinese assertiveness in the region and announced upgrading the U.S. military command in Japan to a new "war-fighting headquarters."

Hegseth, who is on his first Asia trip with Japan as his second stop, also stressed the need for both countries to do more to accelerate the strengthening of their military capability as the region faces China’s assertive military actions and a possible Taiwan emergency.

“Japan is our indispensable partner in deterring Communist Chinese military aggression,” Hegseth said at the beginning of his talks with Japan’s Defense Minister Gen Nakatani in Tokyo. "The US is moving fast, as you know, to reestablish deterrence in this region and around the world."

His comments come as an assurance at a time when Japan has been worried about how U.S. engagement in the region may change under President Donald Trump's “America First” policy, Japanese defense officials said, speaking on condition of anonymity, citing protocol. Trump has also threatened to impose trade tariffs on Japan, a key U.S. ally, sparking more concern.

The two sides agreed to accelerate plans to jointly develop and produce missiles such as Advanced Medium-Range Air to Air Missiles, or MRAAM, and consider producing SM-6 surface-to-air missiles, to help ease a shortage of munitions, Nakatani said. The ministers also agreed to speed up the process involving the maintenance of U.S. warships and warplanes in Japan to strengthen and complement Japanese and U.S. defense industries.

Japan and the U.S. decided in July to upgrade the command and control of the Japanese military as well as U.S. forces in the East Asian country, under the Biden administration, a major structural change aimed at bolstering joint operational and response capabilities. Japan is home to more than 50,000 U.S. troops.

Tokyo last week launched the Japan Joint Operations Command, or JJOC, whose mission is to coordinate Japanese Ground, Maritime and Air Self-Defense Forces, in a significant action to further strengthen capabilities to respond to contingencies and better cooperate with the U.S.

Hegseth announced Sunday the upgrading of its current command, U.S. Forces Japan, by placing a unified operational commander to function as a joint force headquarters to liaise with its Japanese counterpart to serve as “war-fighting headquarters” to bolster speed and capability of their troops’ joint operations.

The Pentagon chief said the reorganization of U.S. troops is a step to better prepare for a possible conflict. America and Japan both work for peace, but “we must be prepared,” he said.

The Japanese defense officials say they are not expecting a significant change in their responsibilities or an increase in U.S. troops in Japan.

Hegseth and Nakatani told a joint news conference that they have also agreed on the need to beef up Japan’s defense posture on the Southwestern islands, which are in critical locations along the disputed areas in the East China Sea and near Taiwan to further step up deterrence against China.

He stressed the need to have “sustaining, robust, ready and credible deterrence” in the Indo-Pacific, including across the Taiwan Strait, as “Japan would be on the frontlines of any contingency we might face in the western Pacific.”

China claims Taiwan as its own territory. The U.S. is obligated under a 1979 law to provide Taiwan with sufficient military hardware and technology to deter invasion, and its arm sales to Taiwan have always drawn strong opposition from Beijing.

On Saturday, he joined the U.S.-Japan joint memorial to honor the war dead in the Battle of Iwo Jima as they marked the 80th anniversary of the end of one of the fiercest battles of World War II, praising the strong alliance between the former enemies.

Before landing in Japan, Hegseth stopped in the Philippines where he also ensured Trump’s commitment to step up ties with the Southeast Asian country that faces maritime disputes with Beijing.

U.S. Secretary of Defense Pete Hegseth gives his opening speech at the beginning of his meeting with Japanese Prime Minister Shigeru Ishiba at the prime minister's office in Tokyo Sunday, March 30, 2025. (Stanislav Kogiku/Pool Photo via AP)

U.S. Secretary of Defense Pete Hegseth, center left, shakes hands with Japanese Prime Minister Shigeru Ishiba at the prime minister's office in Tokyo Sunday, March 30, 2025. (Stanislav Kogiku/Pool Photo via AP)

U.S. Secretary of Defense Pete Hegseth, left, shakes hands with Japanese Prime Minister Shigeru Ishiba at the prime minister's office in Tokyo Sunday, March 30, 2025. (Stanislav Kogiku/Pool Photo via AP)

U.S. Secretary of Defense Pete Hegseth, left, gives his opening speech at the beginning of his meeting with Japanese Prime Minister Shigeru Ishiba at the prime minister's office in Tokyo Sunday, March 30, 2025. (Stanislav Kogiku/Pool Photo via AP)

U.S. Secretary of Defense Pete Hegseth, left, shakes hands with Japanese Prime Minister Shigeru Ishiba at the prime minister's office in Tokyo Sunday, March 30, 2025. (Stanislav Kogiku/Pool Photo via AP)

Japan's Defense Minister Gen Nakatani, right, and U.S. Secretary of Defense Pete Hegseth attend a joint news conference at the Ministry of Defense in Tokyo Sunday, March 30, 2025. (Kiyoshi Ota/Pool Photo via AP)

Japan's Defense Minister Gen Nakatani, right, and U.S. Defense Secretary Pete Hegseth, second left, meet at the Ministry of Defense in Tokyo Sunday, March 30, 2025. (Kiyoshi Ota/Pool Photo via AP)

Japan's Defense Minister Gen Nakatani speaks with U.S. Defense Secretary Pete Hegseth, unseen, during their meeting at the Ministry of Defense in Tokyo Sunday, March 30, 2025. (Kiyoshi Ota/Pool Photo via AP)

U.S. Defense Secretary Pete Hegseth speaks with Japan's Defense Minister Gen Nakatani during their meeting at the Ministry of Defense in Tokyo Sunday, March 30, 2025. (Kiyoshi Ota/Pool Photo via AP)

Japan's Defense Minister Gen Nakatani, right, and U.S. Defense Secretary Pete Hegseth shake hands while posing for photographs prior to their meeting at the Ministry of Defense in Tokyo Sunday, March 30, 2025. (Kiyoshi Ota/Pool Photo via AP)

Japan's Defense Minister Gen Nakatani, right, and U.S. Defense Secretary Pete Hegseth meet at the Ministry of Defense in Tokyo Sunday, March 30, 2025. (Kiyoshi Ota/Pool Photo via AP)

Japan's Defense Minister Gen Nakatani, center, and U.S. Defense Secretary Pete Hegseth, foreground, react after reviewing an honor guard during a welcome ceremony at the Ministry of Defense in Tokyo Sunday, March 30, 2025. (Kiyoshi Ota/Pool Photo via AP)

Japan's Defense Minister Gen Nakatani, left, and U.S. Defense Secretary Pete Hegseth, right, review an honor guard during a welcome ceremony at the Ministry of Defense in Tokyo Sunday, March 30, 2025. (Kiyoshi Ota/Pool Photo via AP)

Japan's Defense Minister Gen Nakatani, left, and U.S. Defense Secretary Pete Hegseth, right, review an honor guard during a welcome ceremony at the Ministry of Defense in Tokyo Sunday, March 30, 2025. (Kiyoshi Ota/Pool Photo via AP)

Japan's Defense Minister Gen Nakatani, right, and U.S. Defense Secretary Pete Hegseth review an honor guard during a welcome ceremony at the Ministry of Defense in Tokyo Sunday, March 30, 2025. (Kiyoshi Ota/Pool Photo via AP)

Japan's Defense Minister Gen Nakatani, left, and U.S. Defense Secretary Pete Hegseth review an honor guard during a welcome ceremony at the Ministry of Defense in Tokyo Sunday, March 30, 2025. (Kiyoshi Ota/Pool Photo via AP)

NEW YORK (AP) — Stocks wavered on Wall Street Friday to kick off the new year as early gains led by technology stocks failed to hold up.

The S&P 500 rose 0.2% after shifting between small gains and losses throughout the morning. The benchmark index is coming off a gain of more than 16% in 2025.

The Nasdaq composite rose 0.1%. The Dow Jones Industrial Average rose 289 points, or 0.6%, as of 2:32 p.m. Eastern.

Major indexes are closing a mostly tepid, shortened holiday week. Markets were closed Thursday for New Year’s Day.

Markets in Europe and Asia made strong gains. Indexes in Britain and South Korea hit records.

Technology stocks were steering the market, especially companies with a focus on artificial intelligence, continuing the trend that pushed the broader market to records in 2025.

Nvidia jumped 1.4% and was the biggest force trying to push the market higher. Broadcom rose 0.4%. But a 0.7% drop from Apple and a 2.4% fall for Microsoft helped to counter those gains.

Those technology companies are among the most valuable companies in the world and their outsized valuations give them more influence on the market's direction. That includes sometimes pushing the market up and down from hour to hour.

Technology companies have been a major focus because of advancements in artificial intelligence technology and the potential for growth within the sector. Wall Street has been betting that demand for computer chips and other items needed for data centers will help justify the big investments from technology companies and their pricey stock values.

Tesla fell 2.6% after reporting falling sales for a second year in a row.

Furniture gained ground following President Donald Trump's move to delay increased tariffs on upholstered furniture. RH rose 9.5% and Wayfair rose 6.3%.

E-commerce giant Alibaba climbed 4.3% and Baidu, maker of the Ernie chatbot, jumped 9.4% in Hong Kong after it said it plans to spin off its AI computer chip unit Kunlunxin, which would list shares in Hong Kong early in 2027. The plan is subject to regulatory approvals.

Crude oil prices were mostly stable. Prices for U.S. crude oil fell 0.1% to $57.38 per barrel. The price of Brent crude, the international standard, fell 0.1% to $60.77 per barrel.

The price of gold fell 0.2%.

Treasury yields held steady in the bond market. The yield on the 10-year Treasury rose to 4.19% from 4.17% late Wednesday. The yield on the two-year Treasury, which moves more closely with expectations for what the Federal Reserve will do, held at 3.48% from late Wednesday.

Wall Street will move past the mostly quiet holiday season after Friday. The first full week of the new year will include several closely watched economic updates. They will also be some of the last big updates the Fed sees before its next meeting at the end of January.

Next week will feature private reports on the status of the services sector, which is the largest part of the U.S. economy, along with consumer sentiment. Government reports on the job market will also be released. They will all help paint a clearer picture of how various parts of the U.S. economy closed out 2025 and where it might be headed in 2026.

The Fed has had a more difficult task because of the complex shifts within the economy. It cut interest rates three times toward the end of 2025, partly to help counter a weakening jobs market. But inflation remains above its target rate of 2% and cutting interest rates could add more fuel to rising prices. Consumers have already expressed more caution amid the squeeze from stubborn inflation and the U.S. trade war with much of the world has added more uncertainty.

The Fed has already signaled concern and caution. Wall Street is betting that the central bank will hold its benchmark interest rate steady at its January meeting.

AP Business Writer Elaine Kurtenbach contributed to this report.

Trader Jonathan Mueller works on the floor of the New York Stock Exchange, Friday, Jan. 2, 2026. (AP Photo/Richard Drew)

Specialists Patrick King, left, and Douglas Johnson work on the floor of the New York Stock Exchange, Friday, Jan. 2, 2026. (AP Photo/Richard Drew)

Trader Vincent Napolitano, foreground, works with colleagues on the floor of the New York Stock Exchange, Friday, Jan. 2, 2026. (AP Photo/Richard Drew)

Trader Fred Demarco works on the floor of the New York Stock Exchange, Friday, Jan. 2, 2026. (AP Photo/Richard Drew)

Trader Jonathan Mueller works on the floor of the New York Stock Exchange, Friday, Jan. 2, 2026. (AP Photo/Richard Drew)

Trader Michael Capolino works on the floor of the New York Stock Exchange, Friday, Jan. 2, 2026. (AP Photo/Richard Drew)

A screen shows the Korea Composite Stock Price Index (KOSPI) as participants applaud during the opening ceremony of the 2026 trading year at the Korea Exchange in Seoul, South Korea, Friday, Jan. 2, 2026. (AP Photo/Lee Jin-man)

Dancers in traditional costumes perform to celebrate the opening for the 2026 trading year outside of the Korea Exchange in Seoul, South Korea, Friday, Jan. 2, 2026. (AP Photo/Lee Jin-man)

A worker walks near a screen showing the Korea Composite Stock Price Index (KOSPI) after the opening ceremony of the 2026 trading year at the Korea Exchange in Seoul, South Korea, Friday, Jan. 2, 2026. (AP Photo/Lee Jin-man)

South Korean financial officers celebrate the opening for the 2026 trading year outside of the Korea Exchange in Seoul, South Korea, Friday, Jan. 2, 2026. (AP Photo/Lee Jin-man)

Dancers in a bull-shaped costume perform to celebrate the opening for the 2026 trading year outside of the Korea Exchange in Seoul, South Korea, Friday, Jan. 2, 2026. (AP Photo/Lee Jin-man)