Japan-US Trade Deal Cuts Auto Tariffs to 15%, Boosts Markets

The recent trade deal between the United States and Japan, announced by President Donald Trump and confirmed by Japanese officials, has been broadly welcomed by markets and analysts as a positive development amid political uncertainty in Japan. The agreement sets reciprocal tariffs on Japanese auto exports to the U.S. at 15%, down from the previous 25%, which has lifted Japanese equities including automakers like Toyota and Mazda, and boosted the Nikkei index and Japanese bond yields. Bank of Japan Deputy Governor Shinichi Uchida described the deal as a significant step forward that reduces uncertainty for Japanese firms, although caution remains regarding the potential economic impact of tariffs. Japanese Prime Minister Shigeru Ishiba expressed optimism that the agreement would foster job creation, high-quality production, and contribute positively to the global economy, despite his party's recent electoral setbacks. The deal is also expected to pressure other countries competing for U.S. markets to negotiate similar tariff reductions. Overall, the trade agreement has helped ease risk premiums and improved market sentiment, signaling potential further cooperation on tariffs and investments between major economies.