HONG KONG: Tokyo’s stock market led a broad Asian rally on Wednesday after Japan and the United States finalized a trade agreement that significantly reduces tariffs on key exports, including automobiles.
The deal, announced by former US President Donald Trump, lowers levies on Japanese cars to 15%, down from a previously threatened 25%, sparking a surge in shares of major automakers.
The Nikkei 225 climbed more than 3% to a one-year high, with Toyota soaring over 15%, Mitsubishi Motors up nearly 14%, and Nissan gaining close to 10%.
The yen also strengthened to 146.20 against the dollar, though it pared some gains after a Bank of Japan official signaled no immediate plans for rate hikes.
Trump hailed the agreement as “perhaps the largest Deal ever made,“ claiming Japan would invest $550 billion in the US, generating “Hundreds of Thousands of Jobs.”
Japanese Prime Minister Shigeru Ishiba emphasized the breakthrough, stating, “We are the first in the world to reduce tariffs on automobiles and auto parts, with no limits on volume.”
However, analysts cautioned that the deal’s long-term impact remains uncertain. Moody’s Analytics economist Stefan Angrick noted, “Japan’s apparent ‘win’ is not that clear-cut,“ pointing out that tariffs had previously been in the low single digits before rising to 10% earlier this year.
The optimism extended beyond Japan, with Manila and Jakarta stocks rallying after the US also reached agreements with the Philippines and Indonesia, reducing tariffs on their goods.
The developments fueled hopes that more trade deals could emerge before Trump’s August 1 deadline, though negotiations with the EU and South Korea remain unresolved.
Elsewhere in Asia, Hong Kong’s benchmark index hit its highest level since late 2021, while Shanghai, Sydney, Singapore, Taipei, Seoul, Mumbai, and Bangkok all posted gains.
The rally followed a strong session on Wall Street, where the S&P 500 reached another record high.
Investors are now awaiting earnings reports from tech giants, including Google parent Alphabet, Tesla, and Intel, for further market direction. - AFP
