Asia: Tokyo's Nikkei leads rally after Japan-US trade deal
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 Aug 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 on Tuesday that officials had agreed to a 'massive' deal that would include a 15 per cent tariff on imports from Japan, down from the previously threatened 25 per cent.
The pact also saw the 25 per cent levy on autos - a major export to the United States - slashed to 15 per cent.
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
'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, US$550 Billion Dollars into the United States, which will receive 90 per cent 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 per cent, thanks to soaring automakers.
Tokyo and Mitsubishi rocketed around 12 per cent and Nissan jumped more than nine per cent.
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 per cent, while tariffs on Indonesia were slashed from 32 per cent to 19 per cent.
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. AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
20 minutes ago
- Straits Times
Epstein furore undermines public trust, Republican election hopes, two US lawmakers say
Find out what's new on ST website and app. The US President has failed to distract attention from the Epstein controversy six months into his second term. WASHINGTON - The uproar over disgraced financier and sex offender Jeffrey Epstein could undermine public trust in the Trump administration, as well as Republican hopes of retaining control of Congress in the 2026 midterm elections, two US lawmakers said on July 27. Republican Representative Thomas Massie and Democratic Representative Ro Khanna, who want the House of Representatives to vote on their bipartisan resolution requiring full release of the government's Epstein files, said the lack of transparency is reinforcing public perceptions that the rich and powerful live beyond the reach of the judicial system. 'This is going to hurt Republicans in the midterms. The voters will be apathetic if we don't hold the rich and powerful accountable,' Mr Massie, a hardline conservative from Kentucky, told NBC's 'Meet the Press' program. Republicans hope to add to their current 219-212 House majority - with four seats currently vacant - and 53-47 Senate majority in November 2026, although the US political cycle traditionally punishes the party of the sitting president during midterm elections. The Washington Post reported late on July 27 that Mr Trump was increasingly frustrated with his administration's handling of the furore around Epstein. Even so, the president was hesitant to make personnel changes to avoid creating a 'bigger spectacle' as his top officials underestimated the outrage from Mr Trump's own base over the issue, the newspaper reported, citing unnamed sources. Mr Khanna said Attorney General Pam Bondi triggered 'a crisis of trust' by saying there was no list of Epstein clients after previously implying that one existed. The change in position unleashed a tsunami of calls for her resignation from Mr Trump's Maga base. 'This is about trust in government,' the California Democrat told 'Meet the Press.' 'This is about being a reform agent of transparency.' President Donald Trump, who on July 27 announced an EU trade deal in Scotland , has been frustrated by continued questions about his administration's handling of investigative files related to Epstein's criminal charges and 2019 death by suicide in prison. Mr Massie and Mr Khanna believe they can win enough support from fellow lawmakers to force a vote on their resolution when Congress returns from its summer recess in September. But they face opposition from Republican leaders including House Speaker Mike Johnson, who sent lawmakers home a day early to stymie Democratic efforts to force a vote before the break. Mr Johnson, who also appeared on NBC's 'Meet the Press,' said he favours a non-binding alternative resolution that calls for release of 'credible' evidence, but which he said would better protect victims including minors. 'The Massie and Khanna discharge petition is reckless in the way that it is drafted and presented,' Mr Johnson said. 'It does not adequately include those protections.' Mr Massie dismissed Mr Johnson's claim as 'a straw man' excuse. 'Ro and I carefully crafted this legislation so that the victims' names will be redacted,' he said. 'They're hiding behind that.' Mr Trump has tried and failed so far to distract attention from the Epstein controversy six months into his second term. On July 26, Mr Trump repeated his claims without evidence that 2024 Democratic presidential nominee Kamala Harris and other Democrats should be prosecuted over payment for endorsements from celebrities including Oprah Winfrey, Beyonce and the Reverend Al Sharpton. Last week he accused former President Barack Obama of 'treason' over how the Obama administration treated intelligence about Russian interference in US elections nine years ago, drawing a rebuke from an Obama spokesperson. Republican Senator Lindsey Graham, a staunch Trump ally, said on July 27 that Ms Tulsi Gabbard, Mr Trump's director of national intelligence, had found new information that investigators initially discovered no evidence of Russian election interference but changed their position after Mr Obama told them to keep looking. 'I'm not alleging he committed treason, but I am saying it bothers me,' Mr Graham told 'Meet the Press.' Democratic Representative Jason Crow dismissed Ms Gabbard's claims, telling the 'Fox News Sunday' program that the national intelligence director had turned herself into 'a weapon of mass distraction'. The Department of Justice has said it is forming a strike force to assess Ms Gabbard's claims. REUTERS
Straits Times
20 minutes ago
- Straits Times
US, China to launch new talks on tariff truce extension, easing path for Trump-Xi meeting
FILE PHOTO: The American and Chinese flags are photographed on the negotiating table, during a bilateral meeting between the United States and China, in Geneva, Switzerland, May 10, 2025. KEYSTONE/EDA/Martial Trezzini/Handout via REUTERS/ File Photo STOCKHOLM - Top U.S. and Chinese economic officials will resume talks in Stockholm on Monday to try to tackle longstanding economic disputes at the centre of a trade war between the world's top two economies, aiming to extend a truce by three months and keeping sharply higher tariffs at bay. China is facing an August 12 deadline to reach a durable tariff agreement with President Donald Trump's administration, after Beijing and Washington reached preliminary deals in May and June to end weeks of escalating tit-for-tat tariffs and a cut-off of rare earth minerals. Without an agreement, global supply chains could face renewed turmoil from U.S. duties snapping back to triple-digit levels that would amount to a bilateral trade embargo. The Stockholm talks come hot on the heels of Trump's biggest trade deal yet with the European Union on Sunday for a 15% tariff on most EU goods exports to the U.S., including autos. The bloc will also buy $750 billion worth of American energy and make $600 billion worth of U.S. investments in coming years. No similar breakthrough is expected in the U.S.-China talks but trade analysts said that another 90-day extension of a tariff and export control truce struck in mid-May was likely. An extension of that length would prevent further escalation and facilitate planning for a potential meeting between Trump and Chinese President Xi Jinping in late October or early November. A U.S. Treasury spokesperson declined comment on a South China Morning Post report quoting unnamed sources as saying the two sides would refrain from introducing new tariffs or other steps that could escalate the trade war for another 90 days. Top stories Swipe. Select. Stay informed. Singapore Not feasible for S'pore to avoid net‑zero; all options to cut energy emissions on table: Tan See Leng Singapore With regional interest in nuclear energy rising, S'pore must build capabilities too: Tan See Leng Singapore New Mandai North Crematorium, ash-scattering garden to open on Aug 15 Singapore Tanjong Katong Road sinkhole did not happen overnight: Experts Singapore Sewage shaft failure linked to sinkhole; PUB calling safety time-out on similar works islandwide Singapore Science Journals: Lessons from weird fish sold in Singapore's wet markets World US and EU clinch deal with broad 15% tariffs on EU goods to avert trade war Asia Displaced villagers at Thai-Cambodian border hope to go home as leaders set to meet for talks Trump's administration is poised to impose new sectoral tariffs that will impact China within weeks, including on semiconductors, pharmaceuticals, ship-to-shore cranes and other products. "We're very close to a deal with China. We really sort of made a deal with China, but we'll see how that goes," Trump told reporters on Sunday before European Commission President Ursula von der Leyen struck their tariff deal. DEEPER ISSUES Previous U.S.-China trade talks in Geneva and London in May and June focused on bringing U.S. and Chinese retaliatory tariffs down from triple-digit levels and restoring the flow of rare earth minerals halted by China and Nvidia's H20 AI chips and other goods halted by the United States. So far, the talks have not delved into broader economic issues. They include U.S. complaints that China's state-led, export-driven model is flooding world markets with cheap goods, and Beijing's complaints that U.S. national security export controls on tech goods seek to stunt Chinese growth. "Geneva and London were really just about trying to get the relationship back on track so that they could, at some point, actually negotiate about the issues which animate the disagreement between the countries in the first place," said Scott Kennedy, a China economics expert at the Center for Strategic and International Studies in Washington. "I'd be surprised if there is an early harvest on some of these things but an extension of the ceasefire for another 90 days seems to be the most likely outcome," Kennedy said. U.S. Treasury Secretary Scott Bessent has already flagged a deadline extension and has said he wants China to rebalance its economy away from exports to more domestic consumption -- a decades-long goal for U.S. policymakers. Analysts say the U.S.-China negotiations are far more complex than those with other Asian countries and will require more time. China's grip on the global market for rare earth minerals and magnets, used in everything from military hardware to car windshield wiper motors, has proved to be an effective leverage point on U.S. industries. TRUMP-XI MEETING? In the background of the talks is speculation about a possible meeting between Trump and Xi in late October. Trump has said he will decide soon on a landmark trip to China, and a new flare-up of tariffs and export controls would likely derail planning. Sun Chenghao, a fellow at Tsinghua University's Center for International Security and Strategy in Beijing, said that a Trump-Xi summit would be an opportunity for the U.S. to lower the 20% tariffs on Chinese goods related to fentanyl. In exchange, he said the Chinese side could make good on its 2020 pledge to increase purchases of U.S. farm products and other goods. "The future prospect of the heads of state summit is very beneficial to the negotiations because everyone wants to reach an agreement or pave the way in advance," Sun said. Still, China will likely request a reduction of multi-layered U.S. tariffs totaling 55% on most goods and further easing of U.S. high-tech export controls, analysts said. Beijing has argued that such purchases would help reduce the U.S. trade deficit with China, which reached $295.5 billion in 2024. REUTERS
AsiaOne
20 minutes ago
- AsiaOne
US and EU avert trade war with 15% tariff deal, World News
TURNBERRY, Scotland — The US struck a framework trade agreement with the European Union on Sunday (July 27), imposing a 15 per cent import tariff on most EU goods — half the threatened rate — and averting a bigger trade war between the two allies that account for almost a third of global trade. US President Donald Trump and European Commission President Ursula von der Leyen announced the deal at Trump's luxury golf course in western Scotland after an hour-long meeting that pushed the hard-fought deal over the line, following months of negotiations. "I think this is the biggest deal ever made," Trump told reporters, lauding EU plans to invest some US$600 billion (S$768 billion) in the United States and dramatically increase its purchases of US energy and military equipment. Trump said the deal, which tops a US$550 billion deal signed with Japan last week, would expand ties between the trans-Atlantic powers after years of what he called unfair treatment of US exporters. Von der Leyen, describing Trump as a tough negotiator, said the 15 per cent tariff applied "across the board", later telling reporters it was "the best we could get." "We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability," she said. The agreement mirrors key parts of the framework accord reached by the US with Japan, but like that deal, it leaves many questions open, including tariff rates on spirits, a highly charged topic for many on both sides of the Atlantic. The deal, which Trump said calls for US$750 billion of EU purchases of US energy in coming years and "hundreds of billions of dollars" of arms purchases, likely spells good news for a host of EU companies, including Airbus, Mercedes-Benz and Novo Nordisk, if all the details hold. German Chancellor Friedrich Merz welcomed the deal, saying it averted a trade conflict that would have hit Germany's export-driven economy and its large auto sector hard. German carmakers, VW, Mercedes and BMW were some of the hardest hit by the 27.5 per cent US tariff on car and parts imports now in place. The baseline 15 per cent tariff will still be seen by many in Europe as too high, compared with Europe's initial hopes to secure a zero-for-zero tariff deal. Bernd Lange, the German Social Democrat who heads the European Parliament's trade committee, said the tariffs were imbalanced and the hefty EU investment earmarked for the US would likely come at the bloc's own expense. Trump retains the ability to increase the tariffs in the future if European countries do not live up to their investment commitments, a senior US administration official told reporters on Sunday evening. The euro rose around 0.2 per cent against the dollar, sterling and yen within an hour of the deal's being announced. Mirror of Japan deal Carsten Nickel, deputy director of research at Teneo, said Sunday's accord was "merely a high-level, political agreement" that could not replace a carefully hammered out trade deal: "This, in turn, creates the risk of different interpretations along the way, as seen immediately after the conclusion of the US-Japan deal." While the tariff applies to most goods, including semiconductors and pharmaceuticals, there are exceptions. The US will keep in place a 50 per cent tariff on steel and aluminium. Von der Leyen suggested the tariff could be replaced with a quota system; a senior administration official said EU leaders had asked that the two sides continue to talk about the issue. Von der Leyen said there would be no tariffs from either side on aircraft and aircraft parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials. "We will keep working to add more products to this list," von der Leyen said, adding that spirits were still under discussion. A US official said the tariff rate on commercial aircraft would remain at zero for now, and the parties would decide together what to do after a US review is completed, adding there is a "reasonably good chance" they could agree to a lower tariff than 15 per cent. No timing was given for when that probe would be completed. The deal will be sold as a triumph for Trump, who is seeking to reorder the global economy and reduce decades-old US trade deficits, and has already reached similar framework accords with Britain, Japan, Indonesia and Vietnam, although his administration has not hit its goal of "90 deals in 90 days." US officials said the EU had agreed to lower non-tariff barriers for automobiles and some agricultural products, though EU officials suggested the details of those standards were still under discussion. [[nid:720501]] "Remember, their economy is US$20 trillion... they are five times bigger than Japan," a senior US official told reporters during a briefing. "So the opportunity of opening their market is enormous for our farmers, our fishermen, our ranchers, all our industrial products, all our businesses." Trump has periodically railed against the EU, saying it was "formed to screw the United States" on trade. He has fumed for years about the US merchandise trade deficit with the EU, which in 2024 reached US$235 billion, according to US Census Bureau data. The EU points to the US surplus in services, which it says partially redresses the balance. Trump has argued that his tariffs are bringing in "hundreds of billions of dollars" in revenues for the US while dismissing warnings from economists about the risk of inflation. On July 12, Trump threatened to apply a 30 per cent tariff on imports from the EU starting on Aug 1, after weeks of negotiations failed to reach a comprehensive trade deal. The EU had prepared countertariffs on 93 billion euros (S$140 billion) of US goods in the event a deal to avoid the tariffs could not be struck. [[nid:720506]]
