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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Japanese Prime Minister Fumio Kishida has said he will step down as leader of the ruling Liberal Democratic party in September, ending a three-year premiership and months of speculation over his ability to survive following a political funding scandal and rising living costs.

At a press conference on Wednesday, Kishida said he would not seek re-election at next month’s internal contest for the LDP’s presidency, which in effect grants the holder the position of Japanese prime minister.

“The first and clearest step to show that the LDP is changing is for me to step down,” said Kishida. “I will not be running in the upcoming presidential election.”

The decision follows months of low approval ratings and a political funding scandal that forced Kishida to sack four cabinet ministers last year.

Kishida, 67, came to power in October 2021 with a promise of establishing a “New Capitalism”. But approval ratings for his administration fell well below the 30 per cent level that has felled previous Japanese leaders.

The yen strengthened 0.3 per cent to ¥146.43 per dollar while equities were mixed. The country’s benchmark Topix index edged up 0.5 per cent while the more exporter-oriented Nikkei 225 shed 0.2 per cent.

Kishida’s successor will be Japan’s third prime minister since the late Shinzo Abe, who stepped down in 2020 and was the country’s longest-serving prime minister.

By pulling out of the LDP leadership race, Kishida opens the way for multiple candidates to compete for the position.

Speculation among political analysts has already centred on former trade minister Toshimitsu Motegi and former foreign minister Taro Kono. Kishida told reporters that “it is important to show a new face of the LDP in this leadership race”.

The LDP has not announced when the election will be held, but people close to the ruling party have said it is likely to be around September 20.

Additional reporting by William Sandlund in Hong Kong

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Home Depot has slashed its outlook for sales, the latest sign that US consumers are pulling back at a time of high interest rates.

The home hardware retailer said comparable sales would fall by 3 to 4 per cent this year, steeper than its previous forecast of a 1 per cent decline.

The cut to Home Depot’s guidance comes after years of strong inflation stretched the finances of US households. Companies from McDonald’s to Disney have already revealed growing caution by consumers.

A key factor weighing on Home Depot’s sales has been higher interest rates, said Richard McPhail, chief financial officer. The Federal Reserve has lifted benchmark rates from zero to more than 5 per cent in the past two years in an effort to quell inflation.

Many Home Depot customers are homeowners, and they often finance large projects with debt, McPhail said. Since mid-2023 they have been holding back.

“They have this deferral mindset waiting for the cost of borrowing to go down,” McPhail said in an interview.

However, in the first half of 2024, “our customers are now telling us that general economic uncertainty is weighing on their minds just as much as higher interest rates”, McPhail said. “If you think about the crowding-out that inflation is creating in durable goods, unemployment is beginning to tick up again, [and] just general unease is having an influence on our customers.”

Homeowners who took out mortgages when rates were lower are in many cases staying put. As many big repairs occur when homes change hands, the decrease in turnover has “taken out what’s likely over $10bn in demand in our market”, McPhail added.

The pressure on sales follows double-digit growth early in the pandemic, as households with surplus savings — and many employees working from home — splashed out on major renovations.

Between fiscal 2019 and 2022, Home Depot’s sales grew by $47bn to $157.4bn. The company has more than 2,300 stores in North America.

Home Depot’s sales totalled $43.2bn in the second quarter that ended in late July, the company said on Tuesday, up 0.6 per cent year on year.

Comparable sales, which cover stores open for at least a year, declined 3.3 per cent in the quarter. During the quarter Home Depot closed a deal to acquire SRS Distribution, a building supply company for professional contractors, at an enterprise value of $18.25bn. 

Home Depot’s net profit was $4.6bn, beating estimates but 2.1 per cent lower than the same quarter a year ago, as costs rose.

Shares of Home Depot reversed early declines to close 1.2 per cent higher on Tuesday in New York.

Happy Tuesday. Here’s your Tuesday Tech Drop, the past week’s top stories from the intersection of politics and the all-inclusive world of technology.

‘But [his] emails!’

Roger Stone, a longtime adviser to Donald Trump who helped to push the fake electors scheme, told the Washington Post that one of his email accounts was reportedly compromised by a cyberattack that was targeting the Trump campaign. The news surrounding this hack has been moving quickly, so let’s review the sequence of events so far. 

• Aug. 10: Politico reports it received internal Trump campaign documents from someone calling themselves “Robert,” describing some of their contents but not sharing them. 
• Aug. 10: Team Trump says it has been hacked and accuses Iran of perpetrating the hack without offering proof. Meanwhile, the campaign tries to shame news outlets not to publish anything resulting from the hack — the polar opposite of Trump’s stance on hacks that targeted Hillary Clinton’s campaign in 2016. 
• Aug. 12: NBC News confirms the Washington Post reports that the FBI is probing the hack, alongside similar attempts made on the Biden-Harris campaign. Officials from what is now the Harris-Walz campaign said there is no evidence that any hacking attempt on it has been successful. The Post also interviews Stone, who says multiple email accounts of his were hit with cyberattacks. The Post’s sources allege Stone’s email was used to send Trump campaign officials a bogus link that could compromise the recipient’s emails, too.

The juicy story here is that one of the most mischievous and aggressively outspoken figures in Trump’s orbit was the one whose private communications appears to have compromised — and possibly compromised others in the Trump campaign, as well.

But a notable subplot is the media’s markedly different response to hacked campaign documents when they come into their hands directly, as compared to the 2016 feeding frenzy over private communications stolen from the Clinton campaign and made public by Wikileaks. The Associated Press is out with a story on the media outlets that have thus far chosen not to publish documents they’ve received as a result of the hack. 

Remember when Trump literally called on Russia to “find” missing Clinton emails and declared his love for WikiLeaks? 

Now Trump is benefitting from a restraint that neither he nor the media have afforded other politicians in a similar situation. Joy Reid called out this double standard on Monday’s episode of The ReidOut. 

Seniors learning about A.I.

Across the country, seniors are getting some training about the budding age of artificial intelligence — learning how the technology can benefit them and how it can be used to deceive and manipulate them. Class is in session. 

Read more from in the Associated Press. 

Musk was warned

Elon Musk received a warning from the European Union ahead of the digital debacle he hosted for Republican presidential nominee Donald Trump on his social media platform X on Monday. The E.U. warned Musk not to run afoul of its rules around the spread of illegal content and disinformation on large social media platforms — a fitting warning, given his role in spreading the disinformation that recently fueled far-right riots in the U.K. 

Read my colleague Anthony Fisher’s take on the Trump-Musk conversation here on MSNBC.com. 

Team Trump tries to take TikTok by storm

The Trump campaign wants to make its candidate into a TikTok star as part of an effort to rehabilitate his public image — but Vice President Kamala Harris’ popularity with young people on the app is throwing a wrench in their plans. 

Read more at The Washington Post. 

Nadler pushes for X probe

New York Rep. Jerrold Nadler has called on Republican House Judiciary Chairman Jim Jordan to probe allegations of political censorship on social media platform X. Elon Musk, who has endorsed Trump, has allowed the platform to spread misinformation about Harris, while liberal accounts supporting her have been suspended and labeled as spam in what some believe is an effort to help Trump. 

Read more at The Verge.

OpenAI warning

OpenAI, the creators of popular artificial intelligence-enabled chatbot ChatGPT, issued a warning about people becoming emotionally dependent on its voice mode. It’s an eerie warning, and we should all be cautious of the ways we can grow attached to our devices. But there’s reason to question this sort of Big Tech fatalism: A.I. experts have warned that this kind of apocalyptic, future-oriented focus can mystify the conversation around real harms artificial intelligence can — and does — pose in the present.

Read more at The Hill. 

Khanna’s crypto outreach

Rep. Ro Khanna, D-Calif., has been acting as a sort of liaison between crypto enthusiasts and the White House, seeking to thread the needle between promoting regulation and assuaging concerns from the largely wealthy, regulation-resistant power brokers in the crypto community. 

Read more at CryptoSlate. 

Trump’s A.I. lie

Trump’s latest lie about Harris — that her campaign used A.I. to generate images of her crowds — is an attempt to convince his followers to reject reality and lay the groundwork to question the election results should he lose this November. Read my latest blog post on it here.