Tokyo's Nikkei leads Asian rally after Japan-US trade deal

Japan Today

13 hours ago

Japanese car makers soared on news that US tariffs on the sector would be slashed from 25 percent to 15 percent
Tokyo stocks rallied with the yen Wednesday after Japan and the United States finally hammered out a trade deal to slash Donald Trump's tariffs, including those on the crucial car sector.
Investors were also cheered by news that Washington had reached agreements with Indonesia and the Philippines, stoking optimism that other countries will achieve deals to avoid the worst of the US president's levies.
Despite a lack of deals being made leading up to Trump's self-imposed August 1 cut-off date, equity markets have been on the march in recent weeks on optimism that governments will eventually get over the line.
Japan had been one of those yet to sign, despite a string of trips to Washington by trade envoy Ryosei Akazawa, dampening investor sentiment in Tokyo.
But Trump said Tuesday that officials had agreed to a "massive" deal that would include a 15 percent tariff on imports from Japan, down from the previously threatened 25 percent.
The pact also saw the 25 percent levy on autos -- a major export to the United States -- slashed to 15 percent.
"We just completed a massive Deal with Japan, perhaps the largest Deal ever made," Trump announced on his Truth Social platform.
"Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits."
He did not provide further details on the investment plan, but claimed the deal "will create Hundreds of Thousands of Jobs."
Japanese Prime Minister Shigeru Ishiba said that he needed to examine the deal before commenting.
Akazawa wrote on X: "Mission accomplished."
Traders poured back into the market, pushing the Nikkei up more than two percent thanks to soaring automakers.
Tokyo and Mitsubishi rocketed around 12 percent and Nissan jumped more than nine percent.
The yen strengthened to 146.20 per dollar -- compared with close to 148 Tuesday. The unit had already enjoyed a recent tick-up after Ishiba vowed to remain in office despite a devastating weekend election loss.
Trump also hailed an agreement with Manila that will see the toll on Philippine goods lowered by one percentage point to 19 percent, while tariffs on Indonesia were slashed from 32 percent to 19 percent.
Shares in Manila and Jakarta rose.
The announcements boosted hopes that other deals could be in the pipeline before next Friday's deadline, though talks with the European Union and South Korea remain elusive for now.
Still, US Treasury Secretary Scott Bessent said he would meet his Chinese counterparts in Stockholm next week for talks, as a separate mid-August deadline approaches for US levies on Beijing to snap back to steeper levels.
Elsewhere in Asia, Hong Kong built on its 2025 surge to hit its highest level since late 2021, while Shanghai, Sydney, Singapore and Taipei were also well up. Seoul was flat and Wellington dipped.
The advances came after a broadly positive day on Wall Street where the S&P 500 hit another peak but the Nasdaq snapped a six-day streak of records.
Eyes are also on the release of earnings from Google parent Alphabet and other tech giants including Tesla and Intel.
© 2025 AFP