Tokyo Stocks Soar on Confirmed US-Japan 15% Auto Tariff Deal

US President Donald Trump and Japanese Prime Minister Shigeru Ishiba announced a significant trade deal reducing US tariffs on Japanese automobiles from 25% to 15%, which sparked a surge in Japanese automaker stocks such as Toyota, Mitsubishi, Nissan, Honda, and Mazda. The agreement, hailed by Trump as the "largest deal ever," includes a promise of $550 billion in Japanese investment in the US and expanded market access for American goods, including automobiles and agricultural products. The tariff reduction, notably without shipment caps, has also positively influenced European automakers' shares, fueling optimism for similar US-EU trade negotiations. Despite the rally, analysts caution that the deal may not be final, as Japan's previous tariffs were lower, and global demand uncertainties remain. The US-Japan agreement, alongside deals with Indonesia and the Philippines, has bolstered investor confidence amid ongoing trade tensions and tariff uncertainties. This development underscores the strategic importance of auto exports, which constitute a significant portion of Japan's economy.