Japan's Topix rallies 2% to record high in trade deal afterglow
The Topix (.TOPX), opens new tab advanced as much as 2% to reach 2,984.25 for the first time ever. The Nikkei (.N225), opens new tab gained as much as 2% to 42,004.92, crossing the psychological 42,000 mark for the first time since July of last year.
The trade deal announced late on Tuesday by U.S. President Donald Trump reduced a reciprocal rate and autos-specific levies to 15%, from the 25% Washington had threatened previously.
The Topix transport equipment index (.ITEQP.T), opens new tab gained 1%, adding to the previous session's nearly 11% surge.
The rubber index (.IRUBR.T), opens new tab, which includes tyre makers, jumped 3.4% after advancing 2% a day earlier.
On Wednesday, the Topix gained 3.2% and the Nikkei climbed 3.5%.
"Given the swift and favourable tariff agreement, we view these updates to be positive for Japanese equities," Dan Hurley, portfolio specialist at T. Rowe Price, said in emailed comments, adding that he maintains a "constructive" view of the market on a three- to-five-year horizon.
"This trade deal with the U.S. reaffirms the relationship on both strategic and economic levels."
Banks stood out, with the sectoral Topix index (.IBNKS.T), opens new tab jumping 3.6% after a 4.4% rally on Wednesday.
Lenders have been buoyed by bets that the economic clarity offered by the tariff deal will allow the Bank of Japan to resume interest rate hikes later this year.
The central bank will meet on policy on Wednesday and Thursday of next week, but traders are eyeing October for a potential rate hike, putting the odds at about a coin toss.
Benchmark 10-year Japanese government bond yields stood at 1.6% on Thursday, matching the high from Wednesday, a level unseen seen since October 2008.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
3 minutes ago
- Reuters
China, India in talks to resume border trade after five-year gap, Bloomberg News says
Aug 14 (Reuters) - India and China are discussing resuming border trade of domestic goods after more than five years, Bloomberg News said on Thursday, citing officials in New Delhi familiar with the matter.
Reuters
6 minutes ago
- Reuters
DeepSeek's launch of new AI model delayed by Huawei chip issues, FT reports
Aug 14 (Reuters) - Chinese artificial intelligence company DeepSeek has delayed the release of its new model after failing to train it using Huawei's chips, highlighting the limits of Beijing's push to replace U.S. technology, the Financial Times reported on Thursday.
Reuters
6 minutes ago
- Reuters
CK Hutchison's $22.8 billion ports deal in focus as conglomerate reports results
HONG KONG, Aug 14 (Reuters) - Investors will look for comments from CK Hutchison ( opens new tab on the status of its $22.8 billion ports business sale to a consortium led by U.S. investment firm BlackRock (BLK.N), opens new tab when the Hong Kong conglomerate reports its results on Thursday. The ports-to-telecoms group will present its interim results at 5 p.m. (0900 GMT), offering analysts the first opportunity to quiz the management about the plan to sell the ports business since it was announced in March. Departing from its usual practice, CK Hutchison did not brief analysts or media about its 2024 earnings, released in March after it made public its plan to sell the business, which includes two ports along the strategic Panama Canal. Since the plan to sell 43 ports in 23 countries to a group led by BlackRock (BLK.N), opens new tab and Italian billionaire Gianluigi Aponte's family-run shipping firm MSC was announced, CK Hutchison has faced a firestorm of criticism from China. In the latest announcement on July 28, the conglomerate said it was in talks with the consortium pursuing its ports business to add a Chinese "major strategic investor" to the bid, after their exclusive talks ended. It said changes would be necessary to secure regulatory approval in relevant jurisdictions and that it would allow as much time as needed to achieve that. Sources have told Reuters the investor was COSCO ( opens new tab - one of the world's dominant, vertically integrated marine transportation firms. They said COSCO was seeking a bigger stake while the other parties in the consortium were keen to keep it a minority. While any stake by COSCO is not yet clear, an inclusion of a Chinese investor would alleviate China's national security concerns and have its blessing, the sources and other experts have said. COSCO did not respond to a request last month for comment. U.S. President Donald Trump had earlier called for the removal of Chinese ownership in the Panama Canal. More than 40% of U.S. container traffic, valued at roughly $270 billion annually, transits the Panama Canal. Shares of CK Hutchison eased 0.2% on Thursday ahead of the results, versus a 0.1% fall in the Hang Seng Index (.HSI), opens new tab. UBS forecast last month a 6% rise in underlying profit for the first six months, as ports and retail business growth and a weakening dollar offset the negative impact of oil prices. However, one-off losses, including from the completion of the 3UK merger, could weigh on the conglomerate's net profit. Morgan Stanley rated CK Hutchison "overweight" last month, citing potential strategic transactions, attractive valuation, and a strong balance sheet.
