In 2024, Japan Inc's foreign direct investment into the US hit a record high of US$77.3 billion amid efforts to hedge against slowing Chinese growth and deflation.

But America hasn't seen anything yet as Japan seeks to shield itself from an even bigger economic wildcard: Donald Trump's trade war wrath as the US president makes Asia the first stop on his tariff revenge tour.

Last week, Japanese Prime Minister Shigeru Ishiba pledged to boost his nation's overall investment in the US to about $1 trillion from $783 billion at the start of 2024.

To put that titanically large number in perspective, it's almost the same amount of Tokyo's US Treasury security holdings. And it raises an obvious question: Does Japan Inc really think the US economy is a buy, or are CEOs handing over the corporate version of ransom payments in hopes the Trump 2.0 presidency doesn't crush them?

Odds are, it's far more the latter than the former. Though the tariff arms race Trump is launching is mostly about China, Japan is right in the center of the collateral damage zone. And Ishiba's Oval Office visit on February 7 served as a reminder of the perils of trusting "Trumponomics."

As Ishiba flew back from Washington, he claimed to have a "deal" with Trump on Nippon Steel's effort to acquire US Steel. Initially, Team Ishiba sold it as Nippon having exclusive access to invest in the iconic American company. Now, that notion seems more spin than reality.

Standing next to Ishiba at the White House, Trump essentially hinted that the Nippon-US Steel agreement was more rhetorical than tangible. Nippon, he said, is "going to do a big investment. I didn't want [US Steel] purchased, but investment I love. I'm okay with it, sure."

Nevertheless, Ishiba's nation seems okay with a 22% increase in Japan's 2023-level bet on the US. Japanese companies are eying opportunities in sectors including semiconductors, artificial intelligence, autos and transportation equipment, liquefied natural gas, chemicals, manufacturing-related research and development, infrastructure, finance and others.

This is despite Trump 2.0 taking a wrecking ball to the financial guardrails that keep it on the road. The ways in which Trump aims to slash taxes, run roughshod over the rule of law, increase government opacity and meddle with the US Federal Reserve's independence could all imperil America's credit rating.