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Investing.com-- Most Asian stocks rose on Wednesday, with Japan’s Nikkei 225 rallying to a one-year high after U.S. President Donald Trump announced a trade deal with the country, which will entail lower trade tariffs.
But broader gains in regional markets were somewhat quashed by weakness in technology shares, which fell tracking overnight losses in their U.S. peers, especially chipmakers.
Still, the S&P 500 eked out a record high on Tuesday, while S&P 500 Futures rose 0.2% in Asian trade.
Nikkei 225 rallies to 1-yr high, automakers surge on Japan-U.S. trade deal
The Nikkei 225 index and TOPIX indexes traded about 2.7% higher by 22:08 ET (02:08 GMT), after initially advancing over 3%. Both indexes reached their strongest level since July 2024.
Trump said in a social media post that his administration had signed a “massive” trade deal with Japan, setting U.S. tariffs on the country at 15%, which is lower than the 25% threatened earlier. Trump also said that Japan will invest $550 billion in the U.S., and will open its markets to more U.S. automobiles and agricultural products.
A host of reports also showed that Trump will lower his automobile tariffs to 15% for 25% for Japanese firms, but will maintain his steel and aluminum tariffs at 50%.
Japanese automakers were the best performers on the Nikkei, with majors Toyota Motor (NYSE:TM) Corp (TYO:7203) and Honda Motor Co Ltd (TYO:7267) both rallying as much as 10%.
The U.S. trade deal brings some much-needed clarity for Japanese exporters, although the 15% tariff is still expected to present some headwinds for external demand.
Still, news of the trade deal helped investors look past heightened political uncertainty in Japan, after Prime Minister Shigeru Ishiba’s party suffered a bruising defeat in recent upper house elections.
Asia stocks mostly upbeat, chipmakers lag
Broader Asian stocks mostly advanced on Wednesday, as optimism over the Japan agreements spurred bets that more countries will sign deals with Washington before an August 1 deadline.
But tech shares, specifically chipmakers, fell tracking overnight losses in their U.S. peers. Weak current-quarter guidance from Texas Instruments Incorporated (NASDAQ:TXN) also weighed, as did a recent report that Japan’s SoftBank Group Corp. (TYO:9984) and OpenAI were struggling to launch their $500 billion AI venture.
South Korea’s KOSPI fell 0.2%, lagging its peers. Singapore’s Straits Times index also traded sideways after recently racing to record highs.
Australia’s ASX 200 rose 0.6%, recovering from sharp losses earlier this week and coming back in sight of a record high.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.2% each, while Hong Kong’s Hang Seng index rose 0.6%.
Gift Nifty 50 Futures for India’s Nifty 50 index rose 0.1%, pointing to a positive open for the index. Markets were also holding out for a U.S.-India trade deal, although recent reports said it may not materialize before August 1.