Nikkei jumped over 2% on today, breaking above the 41k level for the first time in a year after the US and Japan confirmed a long-anticipated trade deal. Investor sentiment was buoyed by the breakthrough, which reduces the threat of harsher tariffs that were set to take effect on August 1.
The agreement, publicly confirmed by both US President Donald Trump and Japanese Prime Minister Shigeru Ishiba, includes a 15% blanket tariff on Japanese imports—down from the initially threatened 25%. Japan’s chief negotiator Ryosei Akazawa called the outcome “#Mission Accomplished” in a social media post.
Trump hailed the deal as “perhaps the largest Deal ever made,” claiming Japan will invest USD 550B into the US and that Americans would receive “90% of the Profits.” Under the terms of the agreement, Japan will further open its markets to US goods, including cars, trucks, rice, and agricultural products. On the other hand, Ishiba indicated that the auto tariff rate will drop to 15% from the current 25% imposed globally.
