Written by The Banking Post
Asian equities advanced sharply on Wednesday, led by a 2.6% rally in Japan’s Nikkei index after U.S. President Donald Trump unveiled a trade deal with Tokyo—offering tariff relief and igniting hopes for broader regional cooperation.
Under the deal, Japan will face a reduced 15% tariff on shipments to the United States, notably easing pressure on automakers. Mazda soared 17%, while Toyota gained 11% on the announcement. Market strategists view the agreement as a strategic win for Japan, allowing it to sidestep an imminent tariff escalation.
The news also spurred expectations for future trade breakthroughs, as Trump signaled upcoming negotiations with the European Union and disclosed talks between U.S. and Chinese officials in Stockholm next week.
Japanese government bond yields climbed 8.5 basis points to 1.585%, reflecting a shift in sentiment and potential for tighter monetary policy by the Bank of Japan. The yen remained stable, edging up 0.1% to 146.42 against the dollar amid speculation around Prime Minister Shigeru Ishiba’s political future.
MSCI’s Asia-Pacific ex-Japan index rose 0.6%, with modest gains across Chinese blue-chips and Hong Kong’s Hang Seng. EUROSTOXX 50 futures rose 0.8%, while U.S. stock futures posted marginal gains.
Despite upbeat trade developments, Wall Street closed mixed overnight as earnings revealed ongoing damage from tariffs. General Motors plunged 8.1% due to a $1 billion tariff hit, while RTX fell 1.6% amid cost pressures.
Investors now await earnings from AI-fueled tech giants Tesla and Alphabet. Meanwhile, the dollar index remained flat after slipping for three straight days, and benchmark 10-year Treasury yields ticked up to 4.3559%.
Oil prices gained modestly, with Brent crude at $68.88 and U.S. WTI at $65.60 per barrel. Gold held steady at $3,429 per ounce.
