Shares of Japanese car manufacturers soared on Wednesday, with Toyota rising by 11 per cent and Honda climbing 9 per cent, following U.S. President Donald Trump’s announcement of a trade agreement with Japan that involves a 15% tariff.
Meanwhile, other auto stocks like Nissan rose more than 7 per cent, and Mazda Motor saw a sharp jump of over 16 per cent. Mitsubishi Motors also climbed more than 12 per cent.
South Korean automaker Hyundai’s shares increased by over 5 per cent on the news, while Kia recorded a modest rise of 0.2 per cent.
On the other hand, Japan’s Nikkei 225 jumped 2.5 per cent to reach 40,731.86 as of 0121 GMT, driven by an 8.4 per cent surge in the Tokyo Stock Exchange’s transport equipment index.
U.S. – Japan trade deal
NHK stated the new 15 per cent tariff rate would apply to Japanese vehicles, though it remains uncertain whether the lower rate will be extended to automakers from other countries.
U.S. President Trump had earlier declared a 25 per cent tariff on all imported vehicles on March 26, which took effect on April 2.
Auto exports to the U.S. are vital to Japan’s economy, accounting for 28.3 per cent of total exports in 2024, as per customs data.
On Tuesday, Trump announced on Truth Social that he had struck the “largest Deal ever” with Japan, which includes 15 per cent “reciprocal” tariffs on Japanese goods entering the U.S.
Trump also stated that Japan has agreed to invest $550 billion in the U.S., with America receiving “90 per cent of the Profits.”
Additionally, he mentioned that Japan would open its market to more U.S. products, including cars, trucks, rice, and other agricultural items.
(With inputs from agencies)
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