BEIJING (Reuters) -Chinese Vice Premier Liu He had a "constructive" virtual dialogue with U.S. Treasury Secretary Janet Yellen on Tuesday, with both sides agreeing to better coordinate macro policies, according to China's commerce ministry.

Celebrating U.S. Independence Day, President Joe Biden on Monday said freedoms in America were under assault and urged citizens to engage in "principled patriotism" while the country faced economic challenges and national divisions.

China will set up a state infrastructure investment fund worth 500 billion yuan ($74.69 billion) to spur infrastructure spending and revive a flagging economy, two people with knowledge of the matter told Reuters on Tuesday.

The German government will be able to buy stakes in energy companies buckling under the cost of soaring gas import prices, according to draft legislation seen by Reuters, as Berlin bolsters its defences in a deepening economic war with Moscow.

Japan's real wages extended a decline in May to post the biggest year-on-year drop in nearly two years, government data showed on Tuesday, as consumer inflation hovering near a seven-year-high outpaced nominal wage growth, reducing households' spending power.

Germany's government will have the power to take stakes in utilities and impose emergency levies on consumers under proposed legal changes now under discussion, three sources told Reuters, as Berlin moves to beef up energy security.