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Time of India
8 hours ago
- Business
- Time of India
Nikkei leads Asian gains: Japan-US trade deal sparks optimism; tariff ease boosts investor sentiment
Representative image (TOI) Asian markets surged on Wednesday, led by the rally in Japanese shares, after US President Donald Trump announced a trade deal with Japan that eased tariffs and boosted investor sentiments. Japan's Nikkei surged 2.6% on Wednesday, driven by a rally in automaker stocks after news that the auto tariff would be cut to 15% from a proposed 25%. Mazda Motor soared 17%, while Toyota rose 11%, reported the news agency Reuters. Meanwhile, Japanese government bonds fell, with 10-year yields jumping 8.5 basis points to 1.585%, as easing trade uncertainty opened the door for potential rate hikes by the Bank of Japan. The agreement includes a mellowed 15 percent tariff on Japanese exports to the US, as against the threatened 25 per cent. Trump announced the trade deal late on Tuesday. "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 added. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Many Are Watching Tariffs - Few Are Watching What Nvidia Just Launched Seeking Alpha Read More Undo Trump did not provide further details on the investment plan, but claimed the deal "will create hundreds of thousands of jobs." Sentiments were further lifted by the additional deals announced with Indonesia and the Philippines, raising optimism that other countries would soon reach an agreement soon, leading to a broader trade relief amid tariff tension. Manilla will have to pay a 19 percent tariff on exports to Washington. Tariffs on Indonesian exports were also cut, from 32 percent to 19 percent. "Expectations for a breakthrough were low, so Trump's announcement delivers a mild upside surprise - providing near-term relief for Japanese equities," said Charu Chanana, chief investment strategist at Saxo, reported news agency Reuters. "Strategically, the deal allows Japan to sidestep immediate tariff escalation, while Trump's attention shifts elsewhere," he added. Even as Trump's self-imposed August 1 deadline for trade deal nears with not many deals in the basket to show, the equity markets have been running high in recent weeks on the hope that countries would eventually reach an agreement before the time runs out. Japan had remained among the few major economies in finalizing a trade agreement, despite multiple visits to the US by trade envoy Ryosei Akazawa, a delay that had weighed on investor confidence in Tokyo. Yen saw a muted reaction, inching up just 0.1% to 146.42 per dollar. Market caution lingered as Prime Minister Shigeru Ishiba was reportedly weighing whether to step down, depending on the trade deal's impact, according to the Yomiuri newspaper, according to Reuters. President Trump also said that EU representatives would arrive Wednesday for trade talks. With the agreement on car shipments secured, PM Ishiba said, 'We are the first (country) in the world to reduce tariffs on automobiles and auto parts, with no limits on volume,' reported news agency AFP. While trade envoy Ryosei Akazawa posted on X - "Mission accomplished." However, he later clarified that the 50 percent tariffs on steel and aluminum were not included in the deal. Despite the deal, experts have issued caution. Stefan Angrick of Moody's Analytics warned it's 'unlikely to be the final chapter in a saga that has bruised Japan's economy,' reported AFP. 'Japan's apparent 'win' is not that clear-cut; the country faced US tariffs in the low single digits before April and a 10 percent tariff since mid-April. It's unclear when the new tariff rate will take effect,' he wrote. Angrick added, 'It's too early to assess the economic ramifications based on the superficial information available at the moment; the most that can be said at this point is that the 15 percent tariff is worse than what Japan had but better than what was threatened.' Meanwhile, US treasury secretary Scott Bessent announced plans to meet with his Chinese counterparts in Stockholm next week, ahead of a mid-August deadline when US tariffs on Beijing could increase again. While, across Asia, Hong Kong extended its 2025 rally to reach its highest level since late 2021. Other markets, including Shanghai, Sydney, Singapore, Taipei, Seoul, Mumbai, and Bangkok, also saw strong buying activity. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Yahoo
9 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
The Mainichi
10 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.
Business Recorder
11 hours ago
- Business
- Business Recorder
Nikkei surges in boost to Asia as Trump announces Japan trade deal
SYDNEY: A rally in Japanese shares led Asian markets on Wednesday after President Donald Trump announced a trade deal with Japan and fuelled hopes of more to come, tempering the disappointment from U.S. earnings that highlighted the drag from higher tariffs. Trump late on Tuesday said a trade deal with Tokyo will include Japan paying a lower 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. 'Expectations for a breakthrough were low, so Trump's announcement delivers a mild upside surprise — providing near-term relief for Japanese equities,' said Charu Chanana, chief investment strategist at Saxo. 'Strategically, the deal allows Japan to sidestep immediate tariff escalation, while Trump's attention shifts elsewhere.' Japan's Nikkei jumped 2.6% on Wednesday as shares of automakers surged on news the deal lowers the auto tariff to 15%, from a proposed 25%. Mazda Motor rallied 17% while Toyota Motor jumped 11%. Japanese government bonds slid, with the yields for 10-year JGBs up a whopping 8.5 bps at 1.585%, as the reduced uncertainty helped to clear the path for the Bank of Japan to resume interest rate hikes. The reaction in the yen was more muted, eking out a small 0.1% gain to 146.42 per dollar . Traders are on edge as Japanese Prime Minister Shigeru Ishiba was planning to soon decide whether to step down after assessing the outcome of the trade deal, Yomiuri newspaper said. Trump also said representatives from the European Union are coming for trade negotiations on Wednesday. That stirred hopes for a deal with Europe, as markets were worried about broader EU countermeasures amid receding signs of a trade agreement with Washington. EUROSTOXX 50 futures rose 0.8%, while Wall Street futures , were up about 0.1%. 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 edged up 0.3% and Hong Kong's Hang Seng index gained 0.5%. MSCI's broadest index of Asia-Pacific shares outside Japanadvanced 0.6%. Overnight, Wall Street closed mixed as investors assessed a spate of earnings that pointed to signs that Trump's trade war is hitting corporate profit margins. General Motors tumbled 8.1% after the automaker reported a $1 billion hit from tariffs to its quarterly results. Shares of RTX dropped 1.6% after the aerospace and defense giant took a hit from tariffs despite strong demand for its engines and aftermarket services. Investors are now waiting for results from Tesla and Google's parent Alphabet the Magnificent 7 stocks that have driven much of the market rally fuelled by AI optimism. In the foreign exchange market, moves are a little muted with the dollar holding onto overnight losses along with lower Treasury yields. The dollar index was flat at 97.45, having slipped 0.4% overnight for its third straight day of declines. The euro dipped 0.1% to $1.1739 after rising 0.5% overnight. Benchmark 10-year U.S. Treasury yields ticked up 2 basis points to 4.3559%, after slipping 3 bps overnight, as Trump continued to lash out at Federal Reserve Chair Jerome Powell for not cutting interest rates, although Bessent said there was no need for him to step down immediately. Bessent did say the Fed's vital independence on monetary policy is threatened by its 'mandate creep' into non-policy areas and he called on the U.S. central bank to conduct an exhaustive review of those operations. Oil prices gained a little on Wednesday. U.S. crude rose 0.4% to $65.60 per barrel, while Brent was at $68.88 per barrel, up 0.4%. Spot gold prices were steady at $3,429 an ounce.
Japan Today
4 days ago
- Automotive
- Japan Today
Japan voters see little hope for tariff reprieve in car maker Mazda's hometown
Mazda Motor employees walk at the company's main plant in Fuchu-cho, Hiroshima Prefecture, on July 15. By Tamiyuki Kihara and Tom Bateman When car maker Mazda sneezes, everyone catches a cold, say people in its hometown of Hiroshima in western Japan, but these days, auto parts maker Yuji Yamaguchi fears a deep chill is on the way. "If Mazda builds fewer cars, our orders will drop," said Yamaguchi, whose 110-year-old firm, Nanjo Auto Interior, has almost 1,000 employees making door panels and other parts for the automaker, which accounts for more than 90% of its sales. "The key thing is whether we can remain profitable with lower volumes." The economic engine of Hiroshima, a manufacturing hub 800 km (500 miles) southwest of Tokyo, Mazda faces U.S. tariffs of 25% on automobiles, a dispiriting prospect for an electorate already battling inflation and a weak economy. Mazda Motor brand cars are displayed at a car dealership in Hiroshima. Image: REUTERS/Issei Kato Japan votes on Sunday in an upper house election that looks set to weaken the grip on power of Prime Minister Shigeru Ishiba, who has failed to win a tariff reprieve from the United States, its closest ally and a crucial trade partner. "I have no expectations for the Japanese government anymore," said Yamaguchi, a great-grandson of Mazda founder Jujiro Matsuda. "I'm past frustration and have just resigned myself to things." As people in Hiroshima and other auto manufacturing regions, brace for the inevitable fall-out from tariffs, Yamaguchi said he had little hope the government could turn the tide. President Donald Trump has given no sign of relenting on his tariffs, and has even hinted at raising those against Japan. Mazda, which saw U.S. sales fall 18.6% in May on the year and by 6.5% in June, is one of the Japanese car makers most exposed to U.S. tariffs. Imports bring in the bulk of Mazda's American sales, but the importance of the wider industry for Japan is almost impossible to overstate. After Japan ceded global leadership in chips and consumer electronics, its auto industry has grown to make up about 28% of the roughly $145 billion worth of goods shipped to the United States last year. There are more than 68,000 companies in Japan's auto supply chain, a July survey by research firm Teikoku Data Bank showed, and the JAMA industry group says they employ 5.6 million people, or about 8% of the labour force. "A supply chain is hard to rebuild once broken," said Hideki Tsuchikawa, research head at Teikoku Databank's branch in Hiroshima, which his firm estimates is home to more than 2,000 auto suppliers. "Automobiles are a core national industry. Government support is essential." The tariffs could cost Mazda and other smaller Japanese automakers U.S. market share lost to bigger rivals, said Julie Boote, an autos analyst at Pelham Smithers Associates in London. Mazda, headquartered in Hiroshima, where it has assembly plants, has so far declined to give a full-year earnings outlook, citing the uncertainty of tariffs. In a statement, Mazda told Reuters its top priority was to protect suppliers, dealers and employees as it looked to overcome the tariff impact. It anticipated significant impact in the short term, the company said, adding it was taking all possible steps, such as asking for government countermeasures. 'NO OVERTIME, NO DRINKING' It is hard to say whether the uncertainty will further deepen voter anger over time, or how much opposition parties will be able to chip away at Ishiba's support as they look to tap into voter discontent. For the auto industry there seems to be no recourse except to return to a well-worn playbook of cost-cutting perfected during Japan's years of stop-start economic growth. No overtime means no extra money for drinking, said Koji Sasaki, the 54-year-old owner of a bar in the town of Fuchu close to Mazda's headquarters, where the automaker's employees usually form the bulk of customers. Their numbers have dropped in recent months, with some regulars apologizing for making fewer visits, he said. Drinking in Sasaki's bar on a recent July evening was company veteran Toshiyuki Shimizu, 45, who said Mazda had already cut back on overtime and business travel for employees. "We used to bring junior staff along on business trips, but now I often go alone," said Akira Ichigi, a 32-year-old Mazda colleague, adding that the limits denied junior employees valuable experience acquired on such trips. Mazda has set up a tariff strategy team that was meeting each week in Hiroshima, said one company insider, speaking on condition of anonymity. But Mazda faced constraints in finding ways to tackle the tariffs from a labour shortage in the United States, that kept it from boosting capacity at its sole plant there, operated with Toyota, the source added. Mazda said overtime cuts and a business travel review were part of its drive to cut 100 billion yen in costs. Essential travel continued, but it was evaluating whether accompanying staff were necessary, it said. The company set up a team to monitor tariffs and was working with suppliers and dealers, it said, adding that key to increasing supply to the U.S. market were its efforts to tackle labour shortages and strengthen the supply chain. For now, parts supplier Yamaguchi said he was not considering specific steps to counter the tariffs. "In business, we need to have long-term vision," Yamaguchi said, likening the moment to the COVID-19 pandemic, when his company posted a loss in 2020 but returned to profit the next year by working to boost efficiency rather than cutting costs. "If we don't invest in 2025, we might miss opportunities." © Thomson Reuters 2025
