Japan's Nikkei Stock Average Slips as US Futures Fall, Investors Eye Israel-Iran Ceasefire
The Nikkei .N225 was down 0.1% at 38,750.47 by the midday break, after flitting between modest gains and losses.
The broader Topix .TOPX fell 0.34% to 2,771.93.
'The market had already factored in the gains of U.S. stocks last night subsequent to a ceasefire announcement,' said Naoki Fujiwara, senior fund manager at Shinkin Asset Management.
The Nikkei snapped a three-day losing streak to end higher on Tuesday after U.S. President Donald Trump announced the ceasefire agreement late Monday.
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Japan Times
2 hours ago
- Japan Times
Vietnam steals a march and leaves Japan in a tough spot on U.S. tariffs
A tariff deal negotiated between the United States and Vietnam has set a high bar for Japan, which has made no concrete progress over 11 weeks of intense trade talks with Washington and has earned itself the ire of U.S. President Donald Trump in the process. 'Even after a round of negotiations like this, it's clear that some tariffs will remain,' said Akihiko Yasui, research director at Mizuho Research and Technologies, in discussing the Vietnam deal. 'And more importantly, it was the higher-rate tariffs that were in fact on the table.' In a Truth Social post on Wednesday, Trump said a 20% tariff will be imposed on Vietnamese exports to the U.S., lower than the original 46% "reciprocal" tariff announced on April 4. Goods transshipped to the U.S. via Vietnam will be subject to a 40% levy. American exports to Vietnam will be allowed to enter the country duty-free. 'It will be a great deal of cooperation between our two countries,' Trump wrote. Japan has all along insisted that tariffs introduced by the Trump administration be rolled back as a precondition to a deal. The U.S. has countered that the only subject up for negotiation is the reciprocal tariffs, now at 10% but set to rise to 24% for Japan on July 9. The Vietnam deal confirmed that the U.S. stance hasn't changed and that a wide gap remains between the positions of Japan, which has yet to make any major concessions, and the U.S., which is demanding big concessions in exchange for a lowering of the higher reciprocal rate. 'In Japan's case, there's very little that the U.S. can point to and say, 'We won this.' That makes the situation quite difficult for Japan,' said Yasui. 'Japan doesn't have much to concede, and even what we could get in return doesn't strike at the core of our interests.' The United States has reported two other trade deals, one with the United Kingdom and the other with China, but they were quite unique and of limited value in gauging the stance U.S. negotiators would take with other countries. The U.K. runs a trade deficit with the U.S., while the China deal involved a number of special considerations, not the least of which is the country's lock on certain rare earths. Vietnam's position is closer to that of many other countries still in talks with the U.S., including Japan. It has a huge trade surplus with the U.S., has been accused of using nontariff barriers and has no ace to play in negotiations. Trade officials in the United States remain optimistic but guarded and vague when discussing talks with Japan. In a CNBC interview on Wednesday, U.S. Deputy Treasury Secretary Michael Faulkender said that the U.S. anticipates making announcements on the negotiations with some other countries before the July 9 deadline. 'Japan is among those that we have had a number of conversations,' Faulkender said. 'We continue to make good progress with them and hope to have an announcement shortly on the progress that we have made.' He also said that if countries move to address nontariff barriers, that could 'change the calculus for us on where our tariff barrier ends up.' Trump himself has been signaling more of a hard line. He personally slammed Japan for three days running this week, saying that it's "spoiled" and complaining about its unwillingness to accept U.S. vehicles and rice. On Tuesday, he said that tariffs on Japanese imports could be taken as high as 35%. The United States might demand a cap on the number of Japanese vehicles exported to the United States if no deal can be reached soon, according to a Wall Street Journal article on Wednesday. Japan has remained silent regarding Trump's verbal onslaught and has stuck to its talking points. On Tuesday, Prime Minister Shigeru Ishiba reiterated in three different settings that Japan sees investment in the United States as the best way to address its trade surplus with the country. The Trump administration has placed an additional 25% tariff on vehicles and auto parts and a 50% tariff on steel and aluminum, and the 10% baseline reciprocal tariff on most other goods. The ball is in Japan's court now, Yasui said. But the U.S. demands require Japan to make concessions that are nearly politically impossible. 'Trump has been dropping hints — about rice, for example. But if Japan's position is, 'We have elections, we can't touch rice,' or 'We can't use agriculture to save auto exports,' then that basically means we're out of ammo,' Yasui said. 'This really is a political judgment,' he went on. 'It is not that Japan can't do anything. The issue is whether Japan chooses to make such decisions or prepares itself for a long-term standoff.'
Yomiuri Shimbun
2 hours ago
- Yomiuri Shimbun
UK PM Gives Full Backing to Reeves after Tearful Appearance in Parliament
LONDON, July 2 (Reuters) – British Prime Minister Keir Starmer's office rushed to give finance minister Rachel Reeves his full backing on Wednesday after she appeared in tears in parliament following a series of U-turns on welfare reforms that blew a hole in her budget plans. Reeves looked exhausted and appeared to brush away tears during the half-hour session of Prime Minister's Questions in the House of Commons. Her spokesperson said it was a personal matter. British borrowing costs rose and the pound fell as the weekly question-and-answer session unfolded on TV, with market analysts saying the moves reflected fears that Reeves would be replaced, throwing the government into further turmoil. Asked about Reeves, a Treasury spokesperson said: 'It's a personal matter, which – as you would expect – we are not going to get into.' Starmer's press secretary told reporters: 'The chancellor is going nowhere, she has the prime minister's full backing.' In an interview pre-recorded on Wednesday and scheduled to air on Friday, Starmer told the BBC's Nick Robinson that Reeves would be chancellor 'for a very long time to come.' The pressure on Reeves comes after the government managed to pass its welfare reform bill, but only after it removed measures that would have led to savings in the long run. Reeves has repeatedly emphasized her commitment to self-imposed fiscal rules, limiting the amount Britain will borrow to try to build the confidence of investors. But that ambition collided with Labour members of parliament who were opposed to the scale of the cuts to welfare, and who said Reeves was being cruel in pushing for billions of pounds of savings from some of the most vulnerable people in society. Opposition politicians and economists said the decision to sharply scale back the welfare reforms meant the government would have to raise taxes or cut spending elsewhere to balance the public finances in the annual budget later this year. LOOKING MISERABLE One Labour member of parliament, who asked not to be named, said Reeves was upset after an argument with the House of Commons speaker Lindsay Hoyle. A spokesperson for Hoyle declined to comment. The opposition Conservative Party leader Kemi Badenoch singled out Reeves during the weekly set-piece parliamentary session, in which lawmakers put questions to the prime minister in often-raucous exchanges, saying: 'She's pointing at me, she looks absolutely miserable.' Reeves animatedly gestured back. Badenoch said: 'She is a human shield for his incompetence. In January, he said that she would be in post until the next election. Will she really?' Starmer then responded that Badenoch would not be in her job by then, but did not explicitly back Reeves. The appearance of Reeves in tears put British government bonds on track for their biggest daily selloff since October 10, 2022, when financial markets were still reeling from former Prime Minister Liz Truss's decision to announce big, unfunded tax cuts. The pound fell almost 1% on Wednesday. Starmer's press secretary later said the prime minister had expressed his confidence in Reeves many times and did not need to repeat it every time a political opponent speculated on her position. The Treasury spokesperson said Reeves would be working out of Downing Street on Wednesday afternoon. Asked if Reeves had offered her resignation, Starmer's press secretary said: 'no.'
Nikkei Asia
3 hours ago
- Nikkei Asia
South Korea wraps up talks toward potentially biggest-ever defense deal
Polish soldiers ride the South Korean-made K2 Black Panther tank during training in Poland on June 24. © Reuters STEVEN BOROWIEC SEOUL -- South Korea's weapons development authority announced the completion of negotiations for what is said to be the biggest deal in the history of the country's arms industry, marking a step forward for the ascending weapons manufacturer. The Defense Acquisition Program Administration said in a news release on Wednesday that Hyundai Rotem, a privately owned South Korean company, had concluded talks with Poland to supply K2 tanks. The agency did not disclose the size of the contract, but in a research report, Mirae Asset Securities valued it at $6.7 billion for the provision of 261 tanks.
