Asia stocks: Japan hits record high on US tariff relief, others trend lower

Investing.com-- Japanese stocks outpaced their Asian peers on Friday after Tokyo won some clarity and relief from Washington on its trade tariffs, while most other regional markets retreated as the U.S. levies took effect. 

Regional markets took middling cues from a mixed overnight session on Wall Street, as markets digested Trump’s tariffs and speculated over who could be named as the next Federal Reserve Chair. ESU25 were mildly positive in Asian trade. 

Nikkei rallies, TOPIX hits record on some tariff relief; Softbank and Sony rally 

Japan’s Nikkei 225 surged 2.2%, while the TOPIX rose 1.7% to a record high. 

Japanese trade negotiator Ryosei Akazawa indicated on Thursday that the effective U.S. tariff rate on Japanese goods will be capped at 15%. His comments helped quell earlier fears that the levy would be added on to already existing tariffs on Japanese goods, which could have presented a much higher effective tariff than the indicated 15%. 

Akazawa’s comments pointed to some relief for Japanese exporters. 

The Nikkei’s Friday rally was also spurred by sharp gains in Sony Corp (TYO:6758) and SoftBank Group Corp. (TYO:9984), as both technology giants clocked standout earnings for the June quarter.

Sony (NYSE:SONY) hiked its annual guidance on expectations of a smaller tariff impact than initially feared. SoftBank clocked a bumper profit on a strong run-up in its artificial intelligence investments. 

Thursday’s tariff news also helped shares of Toyota Motor (NYSE:TM) Corp (TYO:7203) surge 3.8% on Friday, largely offsetting weak earnings and a guidance cut from the world’s biggest automaker. Toyota is extremely sensitive to U.S. tariffs due to its large export volumes to the country. 

Weaker-than-expected Japanese household spending data released on Friday pointed to some cooling in inflation, which in turn could give the Bank of Japan less impetus to hike interest rates. 

Asia stocks dither as Trump tariffs take hold 

Broader Asian markets were far less upbeat, as Trump’s tariffs took effect from Thursday, imposing import duties ranging from 10% to as high as 50% on regional economies.

While several Asian countries did hash out trade deals with the U.S., reducing their tariff levels, investors remained on edge over the economic impact of the duties, given that they will still weigh on demand for U.S.-bound exports. 

Australia’s ASX 200 fell 0.1%, with the country facing a 10% baseline tariff. South Korea’s KOSPI fell 0.3%, as the country faces a 15% tariff.

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes were flat, while Hong Kong’s Hang Seng fell 0.6% on weakness in tech stocks. Semiconductor Manufacturing International Corp (HK:0981), China’s biggest chipmaker, slid 5.2% in Hong Kong trade after logging underwhelming quarterly earnings. 

Futures for India’s Nifty 50 index pointed to a flat open, with the index nursing a muted performance this week. India was among the worst-hit by Trump’s tariffs, which kicked in at 25% on Thursday.

But Trump said India’s tariffs will rise to 50% in three weeks, as he chided the country’s continued buying of oil from Russia. 

Singapore’s Straits Times index fell 0.4%.