Source: Sharecast
Trump signed an executive order on Thursday lowering the tariff on Japanese auto imports to 15% from 27.5%, while confirming a $550bn Japanese investment package in US projects.
He also warned that chip imports from firms not relocating production to the US would soon face tariffs, lifting sentiment in the region’s semiconductor sector.
Patrick Munnelly, market strategy partner at TickMill, noted that “a surge in Wall Street stocks extended into Asia, supported by further signs of a cooling labour market that heightened expectations for a Federal Reserve interest rate cut this month.
“Asian stock markets gained, with mainland China's markets bouncing back after a decline on Thursday.”
Most markets rise as investors digest latest tariff news
In Tokyo, the Nikkei 225 climbed 1.09% to 43,042.50, led by strong gains in Sumitomo Dainippon Pharma, up 10.56%, Konica Minolta, ahead 6.05%, and Nikon Corporation, which gained 5.79%.
The broader Topix index rose 0.82% to 3,105.31.
Munnelly said “Japanese shares climbed following Trump's issuance of an executive order to formalise his trade agreement with Japan.
“Treasuries remained stable after the prior day’s increase, with the sensitive US two-year yield hovering close to a one-year low.”
Chinese equities also rallied, with the Shanghai Composite up 1.24% at 3,812.51 and the Shenzhen Component surging 3.89% to 12,590.56.
Zhejiang HangKe Technology soared 19.99%, Beijing Piesat Information Technology added 14.57% and ArcSoft Corporation rose 10.79%.
Hong Kong’s Hang Seng Index advanced 1.43% to 25,417.98, supported by Xinyi Solar, which rose 7.54%, Sino Biopharmaceutical, up 6.2%, and Hang Lung, which gained 6.13%.
In Seoul, the Kospi 100 edged 0.07% higher to 3,241.37.
HD Hyundai Marine Solution jumped 7.58%, while Hyundai Electric Energy Systems and Hyundai Heavy Industries each climbed nearly 5%.
The S&P/ASX 200 in Sydney rose 0.51% to 8,871.20, boosted by Mesoblast, up 6.53%, Regis Resources, which gained 5.6%, and Genesis Minerals, ahead 5.51%.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 added 0.69% to 13,223.53, with KMD Brands surging 10%, Eroad rising 4% and Vista Group International advancing 3.63%.
Munnelly added that “money markets are almost entirely pricing in a Fed rate cut, with at least two cuts projected by the year's end.
“The dollar weakened against its group-of-10 peers, while gold prices increased.”
In currency markets, the dollar was last down 0.22% on the yen to trade at JPY 148.16, while it lost 0.39% against the Aussie to AUD 1.5283, and retreated 0.53% from the Kiwi, changing hands at NZD 1.7015.
Oil prices were lower, with Brent crude futures last down 0.09% on ICE at $66.93 per barrel, and the NYMEX quote for West Texas Intermediate easing 0.16% to $63.38.
Munnelly observed that “oil prices dropped for a third consecutive day, heading for a weeklong decline ahead of an OPEC+ meeting that may approve another increase in supply.”
Japanese households spend more over sweltering summer
In economic news, Japanese household spending rose in July as extreme summer heat drove a surge in electricity use, though consumers cut back on food purchases.
Data from the internal affairs ministry showed average spending per household of two or more people stood at JPY 305,694 - up 1.4% in real terms from a year earlier.
It marked the third consecutive monthly increase in household expenditure.
Electricity bills climbed 11% as households relied more heavily on air conditioning.
Expenditures on automobiles also jumped 28.5% compared with a year earlier, when Japanese automakers were struggling with a data-falsification scandal.
Food spending, however, fell 1.8%, the second straight monthly decline.
Rice purchases dropped 20% as higher prices forced households to buy less or switch to cheaper alternatives.
Ministry officials said the heatwave encouraged households to spend more overall, but consumers remained cautious on food and other daily necessities.
Reporting by Josh White for Sharecast.com.