Global Markets React to U.S.-Japan Tariff Agreement

Global stock markets exhibited mixed reactions on Friday following the announcement of a U.S.-Japan trade agreement. Tokyo's Nikkei 225 surged 1.9% after Japan resolved a tariff discrepancy with the U.S., positively impacting major automakers like Toyota and Honda, which saw stock increases of 3.5% and 4%, respectively. In contrast, other Asian markets experienced declines: Hong Kong's Hang Seng fell 0.9%, the Shanghai Composite shed 0.1%, and South Korea's Kospi dropped 0.6%. European markets also showed varied performance, with Germany's DAX losing 0.3%, France's CAC 40 adding 0.3%, and Britain's FTSE 100 edging less than 0.1% lower. U.S. stock futures indicated modest gains following a mixed session on Thursday, where the Nasdaq composite rose 0.3% to a record high, driven by gains in Apple and some computer chip makers. Apple rose 3.2% after announcing an additional $100 billion investment in U.S. manufacturing over the next four years. Advanced Micro Devices and Nvidia also saw gains after President Donald Trump imposed 100% tariffs on imported semiconductors but exempted companies with significant U.S. investments. The U.S.-Japan trade agreement, announced on July 23, 2025, reduced tariffs on Japanese auto imports to 15% from a previous 27.5%. In return, Japan committed to a $550 billion investment in the U.S., including purchases of Boeing planes, increased defense spending, and agricultural imports. Japanese Prime Minister Shigeru Ishiba praised the agreement, stating the tariffs are "the lowest rate ever applied among countries that have a trade surplus with the U.S." However, the deal excludes Japanese steel and aluminum exports, which remain subject to a 50% tariff. The Bank of England cut its main interest rate on Thursday to bolster the sluggish U.K. economy. In other dealings on Friday, U.S. benchmark crude oil gained 16 cents to $64.04 per barrel, while Brent crude was up 19 cents at $66.61 per barrel. The U.S. dollar rose to 147.66 Japanese yen from 147.13 yen, and the euro slipped to $1.1639 from $1.1667.