TOKYO: Japan’s Nikkei share average jumped to the highest in almost three months on Tuesday as the US and China agreed to temporarily slash harsh reciprocal tariffs, easing concerns that their trade war could trigger a global recession.
The Nikkei surged as much as 2.3% to 38,494.06 shortly after the open, a level last seen on February 21, before ending the day up 1.4% at 38,183.26.
Of the index’s 225 components, 145 rose, compared to 80 that fell. The broader Topix gained 1.1%.
Under the truce announced on Monday, the US will cut extra tariffs it imposed on Chinese imports last month to 30% from 145% for the next three months, while Chinese duties on US imports will fall to 10% from 125%.
But the pause did little to address the underlying schisms that led to the dispute, including the US trade deficit with China.
“For now, some of the uncertainty surrounding the global trade situation has been relieved,” said Maki Sawada, a strategist at Nomura.
“Tariffs were slashed more than expected,” she said. “US stagflation concerns have come down a notch.”
Shipping was the top performer among the Tokyo Stock Exchange’s 33 industry groupings, climbing 5.1%.
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