TOKYO: Japan’s Nikkei share average rose on Tuesday, buoyed by a weakening yen and as US President Donald Trump gave an additional three-week grace period for tariff negotiations.
The Nikkei gained 0.2% to 39,679.13 as of 0220 GMT.
The broader Topix added 0.1%.
On Monday, Trump began telling selected trade partners that they will see higher tariff rates from August 1, with the original three-month moratorium on “Liberation Day” reciprocal levies expiring on Wednesday.
Japan will now see a rate of 25%.
Prime Minister Shigeru Ishiba said his administration would continue negotiations with the White House to seek a mutually beneficial bilateral deal.
Initially touted by Trump’s team as a likely early success, talks with Tokyo remain stalled for weeks, largely over a 25% tariff on Japanese auto imports.
“It’s very clear that it be will very difficult” to overcome the obstacles to an agreement on autos, said the chief macro strategist at Sumitomo Mitsui DS Asset Management, Masayuki Kichikawa, who sees the 25% duty on the sector sticking.
Japan’s best outcome would be a lowering of the universal 25% rate to the baseline 10% the US is levying on all trading partners, he said.
According to Kichikawa, “there is no choice other than to wait and see” for now as the July 20 Japanese upper house elections leave Ishiba’s team little room to show flexibility in trade negotiations until after the result.
Japanese stocks rose on the day even after the tariff announcements, which also included South Korea along with a host of smaller nations, sent Wall Street sliding from record highs.
Japan’s heavyweight exporters were supported by a sharply weaker yen, with Trump’s new tariff rates spurring a broad rally in the US currency overnight.
A weaker yen inflates the value of overseas revenues.
The chip sector was a standout, with Advantest gaining 2.2% and Furukawa Electric jumping 7.7%.
Automakers advanced, with Mazda climbing 2.5% and Toyota up 0.5%.
However, shares of embattled Nissan slumped for a third day, shedding an additional 2.9%.
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