Asian markets surge as US trade deal prospects brighten
Japan’s US trade pact lifts yen, fuels Asian rally
Asian markets kept the week’s upward momentum on Thursday, buoyed by optimism that other economies will follow Japan’s breakthrough with the United States. In the weeks since the Trump administration began pressing for trade deals, investors have been piling bets that governments will ultimately conclude pacts before the August‑1 deadline.
Japan cuts tariffs, sparks hope for wider trade easing
Russia‑ate yen gained after Japan announced a deal to reduce sweeping tariffs from 25 % to 15 %, a cut that also includes the country’s vital automobile sector. The breakthrough fed speculation that similar accords were already in the pipeline.
EU edging toward a parallel agreement
Analysts report that Brussels could secure tariff reductions to 15 %—from a threatened 30 %—with a trade blanket that would waive duties on aircraft, spirits and medical devices. US Treasury Secretary Scott Bessent said negotiations were moving forward, with talks scheduled later between the bloc’s chief trade negotiator and his American counterpart.
Equity boost, but a 30 % tariff trigger looms
Failure to reach a deal could trigger Trump’s 30 % levies on August 1 and send markets into turmoil, analysts warned. France has insisted that Brussels deploy its anti‑coercion instrument, which would allow import‑export restrictions on goods and services. Neil Wilson at Saxo Markets cautioned that this could “effectively kill trade” between the two, but for the moment expectation seems to be veering toward a deal.
Markets stay upbeat after record S&P 500, Nasdaq run
After a record day for the S&P 500 and Nasdaq on Wall Street, Asia picked up the baton and ran. Tokyo jumped 2 % to a two‑year high; Hong Kong continued its standout year with another advance. Shanghai, Seoul, Singapore, Wellington, Taipei and Manila also rose.
Political context: Prime Minister Ishiba denies resignation talks
Traders are also keeping an eye on developments in Tokyo after Prime Minister Shigeru Ishiba denied discussing a resignation with party elders on Wednesday, as speculation about his future intensified following a weekend election debacle.
Yen gains, next BOJ policy meeting tops investors’ list
Despite the saga, the yen extended its gains, briefly touching 145.86 per dollar as the trade deal allows investors to turn their attention to the Bank of Japan’s policy meeting next week, hoping for guidance on its next interest‑rate hike. The unit had been sitting around 147.90 before the deal. Bank officials have held off rocking the boat on the issue amid tariff uncertainty, but observers say the agreement can allow them to reconsider lifting in October.
Key figures at around 0230 GMT
- Tokyo – Nikkei 225: +2.0 % at 41 983.50 (break)
- Hong Kong – Hang Seng Index: +0.3 % at 25 606.58
- Shanghai – Composite: +0.2 % at 3 588.11
- Dollar/yen – ‑0.3 % at 146.06 yen from 146.47 yen on Wednesday
- Euro/dollar – ‑0.4 % at $1.1772 from $1.1777
- Pound/dollar – +0.3 % at $1.3582 from $1.3579
- Euro/pound – ‑0.2 % at 86.66 pence from 86.68 pence
- West Texas Intermediate – +0.3 % at $65.47 per barrel
- Brent North Sea Crude – +0.3 % at $68.71 per barrel
- New York – Dow: +1.1 % at 45 010.29 (close)
- London – FTSE 100: +0.4 % at 9 061.49 (close)
