Trump announces deal with Japan, will pay 15% tariffs

Donald Trump announces a trade deal with Japan, which will invest $550 billion in the United States and will impose a 15% tariff. It's "perhaps the most important deal ever made. It will create thousands of jobs," Trump claims on his social media platform, Truth.

The Tokyo Stock Exchange's Nikkei index jumped more than 3% after the trade deal with the United States.

The Tokyo Stock Exchange is consolidating its gains in the wake of the 15% tariff agreement reached between Japan and the United States, lower than the 25% tariff threatened by US President Donald Trump starting August 1. The Nikkei index is up 3.59%, settling at 41,201.68 points. Auto stocks, targeted by 15% tariffs, are soaring, compared to the feared 25%: Toyota is up 15.2%, Honda is up 11.38%, Subaru is up 18.31%, and Nissan is up 9.07%. Bank stocks are also in the spotlight, given that the agreement provides for $550 billion in Japanese loans and investments in the United States, with Nomura Holding (+4.21%), Mizuho Financial (+5.21%), and Mitsubishi UFJFG (+5%) rising.

The new U.S.-Japan trade deal does not include defense spending, the Japanese negotiator clarified. "The agreement contains nothing regarding defense spending," Ryosei Akazawa told reporters. U.S. President Donald Trump had called on Japan, a close U.S. ally, to increase its military spending, and some speculated that this requirement would be included in a broader trade agreement.

Japan and the United States have reached a trade agreement under which tariffs on Japanese cars and other goods will be set at 15%, lower than the 25% initially threatened by US President Donald Trump. Prime Minister Shigeru Ishiba, speaking to the media, explained that Tokyo will also increase rice imports from the US within the limits of what is known as the "minimum access" quota, emphasizing the absence of concessions that could weaken the country's agricultural sector, concluding a bitter national debate. The agreement was reached after Japan's chief negotiator Ryosei Akazawa ("Mission accomplished," he wrote in a post on X) held another round of tariff talks in Washington, thus averting the tycoon's threatened 25% tariff on cars from Japan and other countries, with a similar "reciprocal" tariff rate of 25% specifically for Japan starting August 1. Trump, announcing the deal on social media, said that "Japan will invest, at my direction, $550 billion in the United States, which will receive 90% of the profits." He did not provide further details on the plan, but said the deal "will create hundreds of thousands of jobs." Ishiba clarified only that the figure refers to loans and investments.

Japanese Prime Minister Shigeru Ishiba has decided to announce his resignation by the end of August, based on the Liberal Democratic Party's analysis of Sunday's House of Councillors elections, which will be held in August. The vote, a debacle for Ishiba, saw the Jiminto-New Komeito coalition government lose its absolute majority in the chamber. The prime minister himself confided this to his closest aides, the Mainichi newspaper reported, in keeping with the latest developments, which also included the trade agreement with the US to avert reciprocal 25% tariffs starting August 1.