tokyo stocks skyrocket after us-japan trade deal

2025-07-23 general

tokyo, Wednesday, 23 July 2025.
tokyo stocks surged on wednesday following the announcement of a us-japan tariff agreement. the nikkei average jumped over 800 yen, exceeding 40,000. this surge reflects increased investor confidence. president trump announced the deal, stating japan would invest 550 billion us dollars in the united states. bond futures plummeted as investors favored stocks. the yen initially strengthened before stabilizing. the market views the agreement as more favorable than expected.

Market overview

The tokyo stock market responded strongly to the us-japan trade agreement [1]. The nikkei average futures in the us chicago market also saw a substantial increase [2]. The september contract rose to the 40,300 yen level, which is over 700 yen higher than the previous day’s settlement value of 39,610 yen 690 [2]. This surge in futures trading indicates positive expectations among investors regarding the near-term performance of japanese equities [2].

Bond market reaction

In contrast to the stock market’s enthusiasm, the domestic bond market experienced a sharp decline [3]. The september futures contract opened at 138.00 yen, a decrease of 0.60 yen from the previous day [3]. It further declined to 137.87 yen [3]. This sell-off in bonds reflects a shift in investor sentiment towards riskier assets like stocks, driven by the perception that the tariff agreement is less severe than initially feared [3]. The increase in the nikkei average led to increased selling of domestic bonds, which are generally considered safer assets [3].

Currency fluctuations

The yen experienced some volatility following the announcement. Initially, the dollar briefly fell to the 146 yen range [4][7]. Specifically, the dollar weakened from the upper 146 yen range to the lower 146 yen range [7]. As of 9:29 am, the dollar was trading between 146.19 and 146.23 yen, down 1.52 yen or 1.02% [4]. The day’s trading range saw a high of 146.90 yen and a low of 146.19 yen [4]. These currency movements reflect the market’s immediate reaction to the news and subsequent adjustments [alert! ‘further analysis needed to determine long-term currency trends’].

Tariff agreement details

President trump announced that the mutual tariffs with japan would be set at 15% [1][3][7]. In addition to the tariff agreement, japan is expected to invest 550 billion us dollars (approximately 80 trillion yen) in the united states [1][5][7]. trump described this agreement as potentially the “largest deal ever” [7]. The tariff reduction from a previous 25% [5] to 15% is viewed by the market as a positive development, reducing trade barriers and fostering greater economic cooperation between the two countries [GPT].

Sector specific impact

Automobile stocks experienced significant buying interest following the announcement [1]. toyota motor corporation’s stock rose by as much as 10% at one point [1]. This surge in automobile stocks suggests that investors anticipate the reduced tariffs will benefit japanese automakers by making their products more competitive in the us market [GPT]. The positive market reaction to the trade agreement highlights the interconnectedness of trade policy and stock valuations, particularly for export-oriented industries [GPT].

Bronnen

stock market tariff agreement