Nikkei Soars After Trump Announces Trade Deal with Japan

The Nikkei stock index experienced a significant surge on Wednesday morning, briefly climbing over 1,000 points. This increase followed an announcement by U.S. President Donald Trump regarding a substantial trade agreement with Japan. A reciprocal tariff was reduced to 15 percent, down from the previous 25 percent.

At 10:30 a.m., the 225-issue Nikkei Stock Average saw a rise of 946.36 points, equivalent to a 2.38 percent increase compared to Tuesday's closing. The broader Topix index also showed gains, increasing by 70.26 points, or 2.48 percent.

The positive market sentiment was reflected across various sectors, with auto shares experiencing a notable increase. This was attributed to reports indicating a reduction in the U.S. tariff on automobiles, which had been in place since April. The tariff on Japanese cars was also set to decrease to 15 percent from 27.5 percent.

According to Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., the market's positive reaction stemmed from the relatively swift announcement of the trade deal following the recent national election. The expectation had been that the Japan-U.S. tariff negotiations would be prolonged.