Asian Markets Surge: Nikkei Up 3%, Trump Tariffs Deal Announced

Asian markets rally, with Japan's Nikkei up over 3%, after the US and Japan announce a deal on President Trump's tariffs. The agreement calls for a 15% import duty on goods from Japan, down from the 25% Trump had threatened. Hong Kong's Hang Seng and the Shanghai Composite index also rise, while the S&P 500 inched to a new record on Tuesday despite mixed profit reports. General Motors dropped 8.1% despite reporting a stronger profit for the spring.

Asian markets rallied on Wednesday, with Japan's Nikkei index surging over 3% following the announcement of a trade deal between the United States and Japan. The agreement, announced by U.S. President Donald Trump, calls for a 15% import duty on goods from Japan, down from the 25% tariff that Trump had threatened [1]. This development has provided near-term relief for Japanese equities, according to Charu Chanana, chief investment strategist at Saxo [1].

The Nikkei index, which opened new tab jumped 2.6%, was led by automakers such as Mazda Motor (7261.T) and Toyota Motor (7203.T), which saw their shares rise by 17% and 11%, respectively [1]. Japanese government bonds slid, with 10-year JGB yields increasing by 8.5 basis points to 1.585% [1]. The yen also experienced a small gain, appreciating by 0.1% to 146.42 per dollar [1].

In addition to the Japan-US trade deal, U.S. and Chinese officials will meet in Stockholm next week to discuss an extension to the August 12 deadline for negotiating a trade deal [1]. This development has fueled optimism in the Asian markets, with Chinese blue-chips (.CSI300) and Hong Kong's Hang Seng index (.HSI) edging up by 0.3% and 0.5%, respectively [1]. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) advanced 0.6% [1].

Meanwhile, Wall Street closed mixed on Tuesday, with investors assessing a spate of earnings that pointed to the impact of higher tariffs on corporate profit margins [1]. General Motors (GM.N) tumbled 8.1% after reporting a $1 billion hit from tariffs to its quarterly results [1]. Shares of RTX (RTX.N) also dropped 1.6% despite strong demand for its engines and aftermarket services [1]. Investors are now waiting for results from Tesla (TSLA.O) and Google's parent Alphabet (GOOGL.O), the Magnificent 7 stocks that have driven much of the market rally fueled by AI optimism [1].

In the foreign exchange market, the dollar held onto overnight losses, with the dollar index flat at 97.45 after slipping 0.4% overnight [1]. The euro dipped 0.1% to $1.1739 after rising 0.5% overnight [1]. Benchmark 10-year U.S. Treasury yields ticked up 2 basis points to 4.3559%, after slipping 3 bps overnight [1]. Oil prices gained a little, with U.S. crude rising 0.4% to $65.60 per barrel and Brent at $68.88 per barrel, up 0.4% [1]. Spot gold prices were steady at $3,429 an ounce [1].

References:
[1] https://www.reuters.com/business/autos-transportation/global-markets-wrapup-2-2025-07-23/
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3TJ21O:0-nikkei-rally-buoys-asian-shares-as-trump-announces-japan-trade-deal/
[3] https://financialpost.com/pmn/business-pmn/asian-traders-optimistic-as-sp-500-record-holds-markets-wrap