Trump Lowers Japan Auto Tariffs, Sparks Nikkei Rally

President Trump signed an executive order lowering tariffs on Japanese automobile imports from 27.5% to 15%, formalizing an agreement that includes a $550 billion Japanese investment commitment in American projects and a pledge to increase purchases of American products such as cars and rice. This move aims to reduce the American trade deficit with Japan and create new opportunities for U.S. businesses, especially benefiting American automakers. The announcement boosted Asian markets, with Japan's Nikkei 225 index rising to a more than two-week high and crossing the 43,000 mark, driven by gains in Japanese auto and chip-related shares. Market strategists noted that the lower tariffs improved investor sentiment and technical indicators suggest the Nikkei could reach 44,000 soon. The agreement also signals a broader U.S. policy to incentivize semiconductor production onshore, with warnings of tariffs on chip imports from companies not relocating to the U.S., further lifting the region's semiconductor sector. Overall, the tariff reduction and investment package have been well received by both markets and trade negotiators as a step toward easing trade tensions and encouraging economic cooperation.