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Reuters
an hour ago
- Automotive
- Reuters
European, Japan stocks surge after US-Japan trade deal
LONDON/SYDNEY, July 23 (Reuters) - European shares climbed on Wednesday, buoyed by hopes of a trade agreement between the European Union and United States after Japan struck a deal that lowers tariffs on its autos, sending Japanese stocks to a one-year high. President Donald Trump on Tuesday said a trade deal with Tokyo will include Japan paying a lower-than-threatened 15% tariff on shipments to the U.S. It followed an agreement with the Philippines that will see the U.S. collect a 19% tariff rate on imports from there. Trump also said EU representatives were coming for trade negotiations on Wednesday. That stirred hopes for a deal with Europe, even as the EU was reportedly refining countermeasures in case of a deadlock before the August 1 deadline. Euro STOXX 600 (.STOXX), opens new tab jumped 1%, with auto shares (.SXAP), opens new tab surging 3.6%. UK shares (.FTSE), opens new tab hit a record high, climbing 0.5%. The trade deal news has "raised hopes that the U.S. might be about to reach deals with other countries that avoid the higher tariffs on August 1," Deutsche Bank analysts wrote in a note. On Wall Street, S&P 500 futures were up 0.2%, while Nasdaq futures added 0.1%. Japan's Nikkei (.N225), opens new tab climbed 3.7% as automaker shares surged on news the deal would cut the U.S. auto tariff to 15%, from a proposed 25%. Mazda Motor (7261.T), opens new tab rose 18%, while Toyota Motor (7203.T), opens new tab jumped 14%. South Korean automakers also rose as the Japan deal fuelled optimism over potential progress in tariff negotiations between South Korea and the United States. The dollar remained weak, having lost ground overnight. It traded flat at 146.71 yen after sliding 0.5% on Tuesday. The dollar index , which tracks the currency against major peers, was little changed at 97.48. Analysts noted the trade deal reduced a major risk to the fragile Japanese economy, providing more scope for the Bank of Japan to raise interest rates to fight inflation. That hit the bond market, with yields for 10-year JGBs rising 8.5 basis points to 1.585%. Japan's Prime Minister Shigeru Ishiba denied reports he planned to step down following a bruising upper house election defeat. Ishiba said media reports that he had already decided to resign were "completely unfounded." In another positive development, U.S. and Chinese officials will meet in Stockholm next week to discuss an extension to the August 12 deadline for negotiating a trade deal, Treasury Secretary Scott Bessent said. Chinese blue-chips (.CSI300), opens new tab rose 0.7% before losing steam, and MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab added 1.2%. U.S. corporate earnings reports were showing signs that Trump's trade war was hitting profit margins. General Motors (GM.N), opens new tab tumbled 8.1% after the automaker reported a $1 billion hit from tariffs to its quarterly results. Investors are awaiting results from Tesla (TSLA.O), opens new tab and Google's parent Alphabet (GOOGL.O), opens new tab - two of the Magnificent 7 stocks that have driven much of the market rally fuelled by AI optimism. Elsewhere, the euro dipped 0.1% to $1.1737, after rising 0.5% the previous day. The European Central Bank is expected to hold rates steady on Thursday after eight consecutive rate cuts. Oil prices nudged higher, helped by rising prices for diesel in the U.S., where stockpiles are at their lowest levels for this time of the year since 1996. U.S. crude rose 0.3% to $65.48 per barrel, while Brent was at $68.77 per barrel, up 0.2%.
Yahoo
4 hours ago
- Business
- Yahoo
Morning Bid: Surprise Japan trade deal gets others' hopes up
A look at the day ahead in European and global markets from Stella Qiu Just as U.S. corporate earnings are starting to show some negative impact from higher tariffs, President Donald Trump stole market attention by announcing a trade deal with Japan, pleasantly surprising investors. That had everyone hoping for more - certainly the prospects of an agreement between the U.S. and the European Union have improved now, with representatives from the 27-member bloc coming to Washington for more talks on Wednesday. European stock futures rose 1.1% as a result of the optimism. South Korea is studying the Japan deal as its officials fly to the U.S. for more trade talks. U.S. and Chinese officials are meeting next week in Stockholm to discuss an extension to the tariff deadline. The Japan deal included reduced 15% tariffs for auto exports to the U.S., down from 25% before. That lifted shares of Japanese automakers, with Toyota Motor jumping 15% and Mazda Motor rallying 17%. The broader benchmark Nikkei soared 3.2% to the highest in a year, while the benchmark 10-year Japanese government bond yield jumped 9 basis points as the reduced uncertainty helped to clear the path for the Bank of Japan to resume interest rate hikes. The dollar initially dipped against the yen but was last up 0.2% to 146.9 yen after the local Mainichi newspaper reported Prime Minister Shigeru Ishiba has made up his mind to resign following losses in Sunday's upper house election. Trade news aside, investors will be watching earnings reports later in the day from Tesla and Google's parent Alphabet, two of the Magnificent 7 stocks that have driven much of the market rally due to AI optimism. So far, U.S. earnings have been mixed as investors scrutinise them for any signs of a slowdown in the U.S. economy and impact from Trump's tariffs. General Motors tumbled 8.1% after the automaker reported a $1 billion hit from tariffs to its quarterly results. Key developments that could influence markets on Wednesday: - Eurozone consumer confidence flash for July - U.S. earnings from Alphabet, Tesla, IBM Sign in to access your portfolio
Straits Times
4 hours ago
- Business
- Straits Times
Trump tariff deals bring some clarity for Asia, the world's manufacturing base
Businesses with complex supply chains across Asia can start to game out how they'll shift operations to minimise the hit to sales. SYDNEY – After months of uncertainty, US President Donald Trump's latest tariff deals are providing clarity on the broad contours of a new trade landscape for the world's biggest manufacturing region, Asia. Mr Trump on July 22 announced a deal with Japan that sets tariffs on the nation's imports at 15 per cent, including for autos – by far the biggest component of the trade deficit between the countries. A separate agreement with the Philippines set a 19 per cent rate, the same level as Indonesia agreed and a percentage point below Vietnam's 20 per cent baseline level, signaling that the bulk of South-east Asia is likely to get a similar rate. At the same time, US Treasury Secretary Scott Bessent said he'll meet his Chinese counterparts in Stockholm next week for their third round of talks aimed at extending a tariff truce and widening the discussions. That suggests a continuing stabilisation in ties between the world's two largest economies after the US recently eased chip curbs and China resumed rare earths exports. 'We're getting along with China very well,' Mr Trump told reporters on July 22. 'We have a very good relationship.' Throw it all together and a level of predictability is finally emerging after six months of tariff threats that had at one point jacked up tariff levels to 145 per cent on China and near 50 per cent on some smaller Asian exporters. Investors cheered the moves, with Asian shares rising the most in a month. Japan's Nikkei index jumped 3.2 per cent, with Toyota Motor and other carmakers leading the gains. Top stories Swipe. Select. Stay informed. Singapore S'pore's domestic recycling rate drops to all time low of 11% Singapore HDB launches 10,209 BTO and balance flats, as priority scheme for singles kick in Business Singapore's digital banks finding their niche in areas like SMEs as they narrow losses in 2024 Asia Japan Prime Minister Ishiba to resign by August, Mainichi newspaper reports World Trump says US will charge 19% tariff on goods from Philippines, down from 20% Singapore Two found dead after fire in Toa Payoh flat Singapore 2 foreigners arrested for shop theft at Changi Airport Singapore Ports and planes: The 2 Singapore firms helping to keep the world moving Although the latest deals bring some relief, key questions remain. The Trump administration is still considering a range of sectoral tariffs on goods like semiconductors and pharmaceuticals that will be critical for Asian economies including Singapore, Taiwan and India – countries for which the US have yet to announce tariff rates or deals. South Korea is also more exposed to sectoral tariffs, even though the Japan deal provides a potential template for new President Lee Jae Myung. As Mr Trump moves quickly on talks with countries accounting for the bulk of the US trade deficit, he has said he may hit around 150 smaller countries with a blanket rate of between 10 per cent and 15 per cent. With some certainty on tariff levels now emerging, businesses with complex supply chains across Asia and still reliant of the US consumer can start to game out how they'll shift operations to minimise the hit to sales. For US consumers who have so far been spared the tariff ticket shock, economists warn there's likely to be some pass through in the months ahead. The front-loading of shipments from Asia to the US to get ahead of the incoming levies will likely slow once the new rates kick in. While there's relief that tariff rates for South-east Asian economies and 15 per cent for Japan are lower than some of Trump's earlier threats, the reality is that they're far higher than they were before he took office. The latest deals 'continue the trend of tariff rates gravitating towards the 15-20 per cent range that President Trump recently indicated to be his preferred level for the blanket rate instead of 10 per cent currently,' Barclays analysts including Brian Tan wrote in a note. That skews risks to GDP growth forecasts for Asia 'to the downside,' they wrote. Federal Reserve chair Jerome Powell has argued he wants to see where tariffs land and how they filter through the economy before cutting interest rates – much to the annoyance of Mr Trump. For now, Mr Trump is hailing a win on trade, and investors seem overall relieved. BLOOMBERG
Business Times
4 hours ago
- Business
- Business Times
Trump deals bring some clarity for world's manufacturing base
[HONG KONG] After months of uncertainty, US President Donald Trump's latest tariff deals are providing clarity on the broad contours of a new trade landscape for the world's biggest manufacturing region. Trump on Tuesday (Jul 22) announced a deal with Japan that sets tariffs on the nation's imports at 15 per cent, including for autos, by far the biggest component of the trade deficit between the countries. A separate agreement with the Philippines set a 19 per cent rate, the same level as Indonesia agreed and a percentage point below Vietnam's 20 per cent baseline level, signalling that the bulk of South-east Asia is likely to get a similar rate. At the same time, US Treasury Secretary Scott Bessent said he will meet his Chinese counterparts in Stockholm next week for their third round of talks aimed at extending a tariff truce and widening the discussions. That suggests a continuing stabilisation in ties between the world's two largest economies after the US recently eased chip curbs and China resumed rare earths exports. 'We are getting along with China very well,' Trump told reporters on Tuesday. 'We have a very good relationship.' Throw it all together and a level of predictability is finally emerging after six months of tariff threats that had at one point jacked up tariff levels to 145 per cent on China and nearly 50 per cent on some smaller Asian exporters. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Investors cheered the moves, with Asian shares rising the most in a month and contracts for the S&P 500 up 0.2 per cent. The Nikkei-225 index in Japan jumped 3.2 per cent, with Toyota Motor and other carmakers leading the gains. Back in April, Trump hit the pause button on the steepest levies after a rare combination of weakening US stocks, bonds, and the US dollar showed investors were unnerved by his protectionist salvos. That bought time for policymakers from Tokyo, Manila and across the globe to negotiate more palatable deals. Although the latest deals bring some relief, key questions remain. The Trump administration is still considering a range of sectoral tariffs on goods such as semiconductors and pharmaceuticals that will be critical for Asian economies, including Taiwan and India, both of which have yet to announce tariff agreements with the US. South Korea is also more exposed to sectoral tariffs, even though the Japan deal provides a potential template for new President Lee Jae Myung. As Trump moves quickly on talks with countries accounting for the bulk of the US trade deficit, he has said he may hit around 150 smaller countries with a blanket rate of between 10 per cent and 15 per cent. With some certainty on tariff levels now emerging, businesses with complex supply chains across Asia and still reliant of the US consumer can start to game out how they will shift operations to minimise the hit to sales. For US consumers who have so far been spared the tariff ticket shock, economists warn there's likely to be some pass-through in the months ahead. The front-loading of shipments from Asia to the US to get ahead of the incoming levies will likely slow once the new rates kick in. While there's relief that tariff rates for South-east Asian economies and 15 per cent for Japan are lower than some of Trump's earlier threats, the reality is that they are far higher than they were before he took office. The latest deals 'continue the trend of tariff rates gravitating towards the 15 to 20 per cent range that US President Donald Trump recently indicated to be his preferred level for the blanket rate instead of 10 per cent currently', Barclays analysts including Brian Tan wrote in a note. That skews risks to GDP growth forecasts for Asia 'to the downside', they wrote. US Federal Reserve chair Jerome Powell has argued he wants to see where tariffs land and how they filter through the economy before cutting interest rates – much to the annoyance of Trump. For now, Trump is hailing a win on trade, and investors seem overall relieved. 'I just signed the largest trade deal in history, I think maybe the largest deal in history, with Japan,' Trump said at an event at the White House on Tuesday after announcing the deal on social media. 'It's a great deal for everybody.' BLOOMBERG
The Mainichi
5 hours ago
- Automotive
- The Mainichi
Tokyo stocks surge over 3% in morning after Japan-US tariff deal
TOKYO (Kyodo) -- Tokyo stocks soared more than 3 percent Wednesday morning after U.S. President Donald Trump said he had struck a "massive" trade deal with Japan, with the reciprocal tariff reduced to 15 percent from 25 percent. The 225-issue Nikkei Stock Average rose 1,278.52 points, or 3.21 percent, from Tuesday to 41,053.44, after hitting a one-year intraday high. The broader Topix index was up 88.23 points, or 3.11 percent, at 2,924.42. All industry sectors advanced on the top-tier Prime Market, with gainers led by transportation equipment, bank and pharmaceutical issues. The U.S. dollar briefly weakened to the lower 146 yen range in Tokyo as the Japan-U.S. trade deal helped ease concerns over the prospects for the Japanese economy, boosting the yen. At noon, the dollar fetched 146.93-94 yen compared with 146.62-72 yen in New York and 147.71-73 yen in Tokyo at 5 p.m. Tuesday. The euro was quoted at $1.1734-1736 and 172.41-45 yen against $1.1750-1760 and 172.31-41 yen in New York and $1.1685-1687 and 172.61-65 yen in Tokyo late Tuesday afternoon. Stocks climbed across the board, with auto shares surging after reports that the U.S. tariff on automobiles, imposed since April, will be cut to 15 percent from 27.5 percent for Japanese cars. Among automakers, Toyota Motor ended the morning up 13.7 percent at 2,837.5 yen, while Mazda Motor surged 17.7 percent to 993.9 yen. "Since the Japan-U.S. tariff negotiations had been expected to be prolonged, the market reacted positively as the trade deal was announced relatively soon after the national election" on Sunday, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co. Despite the sharp advance, Ichikawa warned of the impact of a possible change in Japan's political situation on the market, with some expecting Prime Minister Shigeru Ishiba to resign after his ruling coalition suffered a major setback in the House of Councillors election.
