Nikkei pulls Asian rally after Japan-US trade deal

Japanese Automakers Rally as US Tariffs Drop to 15%

Stocks in Tokyo climbed sharply after the United States and Japan signed a trade agreement that reduced the tariff on imported cars from 25 % to 15 %. The deal was announced on Tuesday as part of a broader effort to ease the high levies that President Trump had threatened earlier in the year.

Market Response

• the Nikkei 225 surged 2.7 % to 40,868.01
• the Nikkei 225 was the highest level since the summer of 2024
• the yen strengthened to 146.20 per dollar, up from 146.66
• Japanese automotive stocks rose: Mitsubishi +12 % and Nissan +9 %

Broader Trade Developments

President Trump highlighted that the agreement would allow the United States to receive 90 % of the profits from a projected $550 billion investment in Japan, aiming to create hundreds of thousands of jobs. The Japanese Prime Minister said he would need to examine the details before speaking publicly.

Asia‑Pacific Market Moves

• Hong Kong’s Hang Seng Index up 0.6 %
• Shanghai’s Composite Index up 0.5 %
• Singapore and Taipei also posted gains
• Seoul remained flat and Wellington dipped slightly

Wall Street Context

The move was part of a larger positive day in the United States, where the S&P 500 hit a new peak, and the Nasdaq ended its six‑day record streak. Investors are also anticipating earnings reports from Google’s parent Alphabet, Tesla, and Intel.

Key Economic Indicators

• West Texas Intermediate crude up 0.3 % at $65.52 per barrel
• Brent North Sea Crude up 0.3 % at $68.79 per barrel
• Euro/dollar down to $1.1740 from $1.1755
• Pound/dollar down to $1.3525 from $1.3532