Japan stocks jump, bonds slide after Trump says trade deal reached
TOKYO: Japanese automaker shares led the Nikkei share average higher on Wednesday, while bonds slid after U.S. President Donald Trump said he had reached a trade deal with Tokyo.
The Nikkei leapt 2% in early trading, with the Tokyo Stock Exchange's transport equipment index surging 7%. Toyota Motor soared 10%.
Benchmark 10-year Japanese bond futures tumbled as much as 0.92 yen to 137.68 yen, the lowest since March 28.
Trump on Tuesday said the U.S. and Japan had struck a trade deal that includes a 15% tariff that will be levied on U.S. imports from the Asian country. - Reuters Trading ideas: TNB, Bursa, HI Mobility, KIP REIT, UUE, Pestec, Jati Tinggit, SL Innovation, SC Estate, Majuperak, Oasis, Pavilion REIT
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
a minute ago
- The Star
News Analysis - Philippines gets minor US tariff cut, but defence ties remain intact
MANILA: Philippine President Ferdinand Marcos Jr flew to Washington on Sunday (July 20), hoping to turn warm diplomatic ties with the US into tangible economic gains. But instead of a breakthrough, he is returning to Manila with a modest concession: a 1-percentage point cut in the reciprocal tariff rate on Philippine exports to the US, from 20 per cent to 19 per cent. In exchange, the Philippines agreed to remove tariffs on key American goods, including cars. It was not the outcome Manila had hoped for. The new rate is still higher than the 17 per cent announced in April by US President Donald Trump, and analysts say it spotlights the Philippines' limited bargaining power when dealing with an unpredictable but transactional US partner. Philippine trade negotiators had initially aimed to secure a free trade agreement or a bilateral comprehensive economic partnership deal. 'Well, that's how negotiations go,' Marcos told reporters hours after Trump announced the revised tariff rate on his Truth Social platform. 'When we arrived here in Washington, the tariff rate was 20 per cent... so we tried very hard to see what we can do,' he added, referring to the 1-percentage-point decrease. That cut came at a cost. Marcos confirmed the Philippines would open up previously protected sectors, including car imports from the US. Other American goods set to receive zero tariffs are still being determined. The Philippines also committed to buying more US products such as soya beans, wheat and medication, which Marcos framed as a move to help Filipinos access more affordable essential goods. US Secretary of State Marco Rubio said on July 23 that the US is set to give the Philippines some US$60 million (S$76 million) in foreign assistance funding to support energy, maritime and economic growth programmes. Rubio said the State Department also plans to work with the US Congress to allocate US$15 million to support investments and job creation along the Luzon Economic Corridor, a trilateral initiative with Japan and the Philippines launched in April 2024 to boost infrastructure and connectivity across Manila and surrounding provinces. Lopsided deal? Still, the asymmetry in the deal is hard to ignore. While Trump praised Marcos as a 'strong negotiator' during their joint press conference ahead of their bilateral meeting, he also quipped that the Philippine President was 'negotiating too tough', hinting that a larger concession had been left on the table. The result, analysts say, was not a clear win for Manila, but a strategic compromise. Dr Aries Arugay, visiting senior fellow at the ISEAS – Yusof Ishak Institute in Singapore and chairman of the University of the Philippines' Political Science Department, described the outcome as underwhelming. 'We are worse off than the original' position of the Philippines, he told The Straits Times, noting that South-east Asian neighbours like Vietnam and Indonesia had secured steeper tariff reductions from the Trump administration. 'Marcos was really hoping to make economic gains out of this trip. Unfortunately... the general outcome was not really what was expected,' Dr Arugay said. For Washington, success in this negotiation was always going to be measured differently. Trump appeared content with the outcome, and he did not press the Philippines to increase its defence spending, as he has done with other allies. Manila may have accepted the limited economic gain to preserve goodwill with its treaty ally amid rising tensions with Beijing over the South China Sea, said Georgi Engelbrecht, senior analyst for the Philippines at the International Crisis Group. 'I have a feeling (the Marcos government) was also thinking the priority is to keep Trump close to us, and what we can get is what we can get... It's not perfect, but it could have been worse,' Engelbrecht told ST. Strong military ties Still, the Philippines was able to reaffirm its longstanding defence ties with the US, one of the key goals of Marcos' trip. In that sense, both Dr Arugay and Engelbrecht said Marcos achieved what he needed: a reaffirmation of military cooperation with the US, no public scolding from Trump, and enough progress to signal continuity in the alliance – even if it fell short of a clear economic win. Both Trump and Marcos voiced support for a planned US-funded ammunition production and logistics hub in Subic, a former US military base turned freeport zone located north-west of Manila. Touting America's military stockpiles, Trump said the ammunitions hub is 'very important' and part of broader US efforts to bolster its posture in the Indo-Pacific, where Washington is locked in a rivalry for influence with China. Marcos cast the project as part of his administration's 'self-reliant defence programme', aimed at modernising the Armed Forces of the Philippines and reducing dependence on foreign suppliers. 'It will help the Philippine modernisation of the military,' said Dr Arugay, but added that it also 'really reinforces American presence in the country through the EDCA sites'. He was referring to the Filipino military bases that American troops have access to under the Enhanced Defence Cooperation Agreement. The US initially had access to five bases, but Marcos expanded that to nine in 2023. The proposed ammunition facility, initiated under the Biden administration with bipartisan support in the US Congress, is not without risks. Its location in Subic places it within striking distance of the South China Sea, raising concerns over potential escalation. But Engelbrecht downplayed those fears, saying: 'China's not going to launch a rocket just because of that alone.' What matters more is Philippine control over how such facilities are used, he added. 'These are still Philippine bases. Marcos would still need to green-light any activity that the US wants to do,' Engelbrecht said. Despite failing to get a steeper tariff cut, Marcos was the first South-east Asian leader to meet Trump at the White House since his re-election in 2024. That alone sent a signal that Marcos remains a reliable US partner, said the analysts. Yet the challenge moving forward is clear: The Philippines cannot afford to rely on the US alone. 'The Philippines must hedge and diversify, like Indonesia did with its EU trade deal,' said Engelbrecht. Dr Arugay agreed, saying: 'The Marcos administration should not put all its strategic economic and security eggs in the US basket. We must look for new markets.' - The Straits Times/ANN
The Star
31 minutes ago
- The Star
Has luxury fashion lost its appeal? Signs of shopper fatigue persist
Handbags for sale in the window of a Dior boutique in Paris. Photo: Bloomberg LVMH and Kering are expected to report another drop in quarterly sales, deepening investor worries about a prolonged downturn in the US$400bil (approximately RM1.7tril) luxury market as brands face the threat of hefty US import tariffs. The results, kicking off with LVMH on Thursday (July 24), will likely show that any revival in demand for pricey fashion in the key US and Chinese markets remains elusive. Uncertainty unleashed by US president Donald Trump's trade war has caused volatility in stock markets, weighing on consumer confidence. Trump's threat of 30% tariffs on imported EU goods risks hurting luxury houses that make products in France and Italy. They will be wary of lifting prices for US consumers after signs that previous rounds of price hikes slowed demand. "The level of price increases has been too much" at a number of brands, alienating the "aspirational" middle-income shoppers, said Caroline Reyl, head of premium brands at Pictet Asset Management. Read more: Fashion's new power move? Turning away from influencers and the overhyped Decline in sales LVMH's fashion and leather goods division, home to Louis Vuitton and Dior, is expected to show sales down 6% year-on-year, its fourth consecutive quarterly decline, according to a Visible Alpha consensus forecast. Gucci, Kering's main earner which is undergoing an overhaul, has struggled for twice as long and is seen reporting sales down nearly a quarter from a year earlier. After two years of slowing sales, unease about the health of the industry is growing, with customers baulking at higher price tags. Shares of LVMH are down nearly 27% since the start of this year, while shares of Kering are down 15%. Shares of Hermes and Richemont, which cater to mostly wealthy clients, were little changed, with the former down 0.9% and the latter up 1.6% over the same period. LVMH, Europe's most valuable listed company as recently as January, has slipped to fifth place. "It seems that investors are starting to worry about the long-term structural attractiveness of the industry," UBS analysts said last week. Sales of handbags – previously a growth engine – have been weak as shoppers opt for timeless, investment-grade jewellery. Brands including Dior, Gucci and Chanel have recruited new designers, but it takes time for fresh styles to enter stores. Read more: Less-expensive luxury fashion brands are slowly gaining ground, but why? Lower-priced products Brands like Louis Vuitton and Prada are offering more products below $1,000, like a new hybrid ballerina-sneaker shoe, for example, and emphasising beauty products, said Bain consultants. But that carries risks. "The aspirational skew of the brand is unhelpful currently," said HSBC analysts, highlighting problems at Louis Vuitton. "Some inconsistencies, we feel, are likely starting to have consumers wonder." Consensus forecasts peg organic sales of LVMH down 3%, while Kering is seen down 13%; Hermes and Prada are expected to show a 10% rise, as Prada's Miu Miu label takes market share from rivals. Kering will report its results on July 29, while Hermes and Prada are due to report on July 30. – Reuters
The Star
31 minutes ago
- The Star
Ringgit extends gains as govt initiatives, US-Japan trade deal lift sentiment
KUALA LUMPUR: The ringgit extended its gains against the US dollar at Wednesday's close, lifted by the latest fiscal support measures announced by the government as foreign funds flocked into the local equity market, said an analyst. The local currency was also supported by optimism following the US-Japan trade deal which boosted Asian equity and foreign exchange markets across the board. At 6 pm, the ringgit rose to 4.2255/2300 versus the greenback compared with Tuesday's close of 4.2300/2370. Earlier today, Prime Minister Datuk Seri Anwar Ibrahim unveiled a new round of fiscal support measures aimed at alleviating living costs, stimulating domestic consumption and boosting household spending ahead of the upcoming National Day and Malaysia Day celebrations. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the one-off RM100 cash aid for Malaysians aged 18 and above, given through MyKad under the RM2 billion Sumbangan Asas Rahmah (SARA) programme, would help support economic growth in the second half of 2025. "In a way, it's like a mini fiscal stimulus at a time when external uncertainties have become apparent. Such proactive move bodes well for the ringgit in the near term,' he told Bernama. Meanwhile, SPI Asset Management managing partner Stephen Innes said the ringgit was supported by regional tailwinds after US President Donald Trump struck a "massive' trade deal with Japan on Tuesday, which included cutting US tariff on the latter to 15 per cent from 25 per cent. Innes noted that the deal has boosted market optimism which lifted stocks and Asian currencies including the ringgit. "There is growing speculation that if Japan could secure softer terms, Malaysia might also seek similar concessions before the Aug 1 deadline,' he added. However, the ringgit was weaker against a basket of other major currencies at the close. It slipped versus the Japanese yen to 2.8837/8870 from 2.8690/8739 at Tuesday's close, weakened vis-a-vis the British pound to 5.7230/7291 from 5.7088/7183 yesterday, and fell versus the euro to 4.9586/9639 from 4.9512/9594. The local note was also easier against some regional peers. It was flat against the Indonesian rupiah at 259.1/259.5 compared with 259.1/259.7 at yesterday's close. However, it slid vis-à-vis the Singapore dollar to 3.3071/3109 from 3.3011/3071 on Tuesday, depreciated versus the Thai baht to 13.1370/1567 from 13.0899/1172 previously, and inched down against the Philippine peso to 7.42/7.44 from 7.41/7.43. - Bernama
