Tokyo stocks rally after US-Japan trade deal slashes tariffs, energizing investor sentiment on Wednesday. Markets surged after news broke that Washington and Tokyo reached a long-anticipated agreement.
The Nikkei soared over two percent as investors cheered the breakthrough. Major automakers led the gains. Toyota and Mitsubishi both jumped around 12 percent, while Nissan surged more than nine percent.
The rally came as the yen strengthened. The currency climbed to 146.20 per dollar, improving from nearly 148 on Tuesday. Recent political stability and trade optimism have helped the yen regain momentum.
Tokyo stocks rally after US-Japan trade deal slashes tariffs, including the crucial 25% levy on Japanese cars. The new agreement cuts that rate to 15 percent, softening a major export blow.
President Donald Trump announced the deal on his Truth Social platform. “Perhaps the largest Deal ever made,” he wrote. He also claimed Japan would invest $550 billion into the U.S. and the U.S. would “receive 90% of the profits.”
While he offered few details, Trump promised the deal would create “hundreds of thousands of jobs.”
Japanese Prime Minister Shigeru Ishiba said he would review the deal before making public comments. Trade envoy Ryosei Akazawa declared “Mission accomplished” on X, formerly Twitter.
Markets were already buoyant in the weeks leading to Trump’s August 1 deadline. Still, uncertainty around Japan’s delayed deal had weighed on Tokyo stocks. Now that pressure has eased.
Tokyo stocks rally after US-Japan trade deal slashes tariffs, joining a broader regional upswing. Shares in Manila and Jakarta also climbed. Trump announced separate trade deals with the Philippines and Indonesia, reducing their tariffs to 19 percent.
Investors hope additional agreements could emerge before next Friday’s deadline. However, talks with the European Union and South Korea remain unresolved.
Meanwhile, U.S. Treasury Secretary Scott Bessent said he would meet Chinese officials in Stockholm next week. The mid-August deadline for renewed U.S.-China tariffs still looms.
In other Asian markets, Hong Kong extended its 2025 surge, reaching its highest level since late 2021. Shanghai, Sydney, Singapore, and Taipei all posted gains. Seoul was flat, while Wellington edged lower.
Wall Street also contributed to global optimism. The S&P 500 hit a fresh peak, although the Nasdaq snapped a six-day record streak. Traders are now watching earnings reports from Alphabet, Tesla, and Intel.
Overall, the easing of tariff fears has sparked a wave of bullish sentiment across equity markets. Auto-heavy economies like Japan stand to benefit most, as global supply chains stabilize and trade tensions cool.
