Japanese stocks climbed after President Donald Trump signed an executive order implementing his trade agreement with Japan, with a maximum 15% tariff on most of its products, including autos.
The Topix Index rose 0.8% to 3,105.31 as of the market close in Tokyo, while the blue-chip heavy Nikkei 225 Stock Average advanced 1% to 43,018.75 The yen was up 0.2% to 148.36 against the dollar.
Relief for aerospace and automobile imports will become effective within seven days, according to the executive order. Export-related sectors such as the electric appliances and wholesale trading companies were the largest contributors to the Topix.
With some progress made on the tariffs on automobiles, “investors are mainly targeting export-related sectors,” said Hiroki Takei, a strategist at Resona Holdings Inc. Technology stocks with high exposure to AI-related demand also saw gains in Japan on Broadcom Inc.’s earnings “which gave the market greater optimism about the sustainability of the AI boom in advanced products,” he added.
Toyota Motor Corp. contributed the most to the Topix Index gain, increasing 2%. Out of 1,677 stocks in the index, 1,125 rose and 491 fell, while 61 were unchanged.
“News that the deal is finally locked in at a 15% max rate pretty much takes that last risk off the table,” said Phillip Wool head of portfolio management at Rayliant Global Advisors Ltd. “Along those lines, this should be seen as good news for the auto sector, where tariff risk has weighed most heavily.”
According to a poll of nine market participants, the Nikkei 225 is projected to rise an average of 10% over the next 12 months from its most recent record high of 43,714.31 reached last month. The benchmark could climb as much as 28% from Friday’s close under the most bullish forecast.
