(Reuters) -President Donald Trump said the U.S. and Japan had struck a trade deal that includes a lower 15% tariff that will be levied on U.S. imports from the country, including autos.
In a post on Truth Social, Trump said the deal would include $550 billion of Japanese investments in the United States.
COMMENTS
SHOTARO MORI, SENIOR ECONOMIST, SBI SHINSEI BANK, TOKYO:
"As Bank of Japan Governor Kazuo Ueda had previously indicated expectations of tariffs exceeding 10%, the 15% rate falls within the BOJ's anticipated range. Now that the rate is finalised, attention will turn to economic data to be released from August onward, particularly Q2 GDP and corporate earnings. If corporate earnings for April–June are not too weak, the BOJ could move to raise interest rates as early as in October."
CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:
"The deal - which sets a much lower tariff rate on Japanese imports including autos - looks to be a positive outcome for Japan. The brief and small lift in the JPY may suggest a US-Japan trade deal was somewhat in the price before the announcement. Concerns about higher Japanese government spending and borrowing also continue to keep downward pressure on the JPY. The 40-year JGB auction later today may be the next source of volatility for the JPY."
CHRISTOPHER WONG, CURRENCY STRATEGIST, OCBC BANK, SINGAPORE:
"There was some knee-jerk reaction to the trade deal, but largely the moves have stabilised with the dollar/yen trading near its 10- or 11-day low. With tariff uncertainty out of the way for Japan, we keep our eyes peeled on two risks going forward for the dollar/yen - political risks if (Prime Minister Shigeru) Ishiba still holds on and if there are any changes to credit rating, dependent on the country's fiscal health."
CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE:
"Expectations for a breakthrough were low, so Trump’s announcement delivers a mild upside surprise — providing near-term relief for Japanese equities. The reduced 15% tariff, down from the previously flagged 25%, is meaningful and should lift sentiment in export-driven sectors, even if the fine print, especially on autos, remains critical. Markets will largely discount the $550 billion FDI headline as political theatre rather than a tradable catalyst.
"Strategically, the deal allows Japan to sidestep immediate tariff escalation, while Trump's attention shifts elsewhere."
KRISTINA CLIFTON, SENIOR ECONOMIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:
"We don't know all the details yet, apart from just that he will place a 15% tariff on imports from Japan.
"It's a lower rate than what President Trump announced on Liberation Day, so to that end, it's a better outcome than potentially they could've seen. Steel, aluminium, and also cars are important exports for Japan, so it'll be interesting to see if there's any specific carve-outs for those."
HIROFUMI SUZUKI, CHIEF CURRENCY STRATEGIST, SMBC, TOKYO:
"This is good news for the Japanese economy.
"There are reports that automobiles will also be subject to a 15% tariff, which is clearly good news. I don't think this alone will lead to a Bank of Japan rate hike next week, but the possibility of a rate hike between September and October has increased. This will create pressure to buy the yen."
(Reporting by Reuters Asia bureaus; Compiled and edited by Subhranshu Sahu)
