Asian stocks rise as Japan jumps on tariff relief

Representative image

Asian stocks rose Friday as Japanese shares jumped on easing trade tensions with the US and technology stocks advanced after earnings.

The MSCI Asia Pacific Index rose 0.5% and is poised for a fifth consecutive day of gains. The Nikkei-225 index jumped 2.1%, after Japan’s chief trade negotiator said the US agreed to end so-called stacking on universal tariffs and cut car levies at the same time. SoftBank Group Corp. and Sony Group Corp. led gains among tech companies after earnings.

Ten-year Treasuries were little changed and the dollar gained against its Group-of-10 peers. Oil headed for the biggest weekly loss since June.

Asian shares are on track for their best week since June, buoyed by growing speculation of a Federal Reserve interest-rate cut, even as tariff headlines continue to jolt sentiment. In his latest trade salvo, President Donald Trump escalated tensions by targeting India and imposing a 39% levy on Swiss exports to the US, while saying he’s “getting very close to a deal” with China.

“Traders are looking at the tariffs facing countries like India and Switzerland and are identifying Japan as being in pretty good shape in comparison,” said Tim Waterer, chief market analyst at KCM Trade. Investors “are now thinking that Japan is in comparatively good stead at 15%.”

The US will amend the executive order to end stacking and order the car tariff cut at the same time, Akazawa said. He didn’t offer a specific timing for the move. Shares in Toyota Motor Corp., Honda Motor Co. and other carmakers jumped on the comments.

Akazawa said the US will also pay back tariffs that were overpaid due to stacking.

Technology companies also helped the rally in Japan stocks. SoftBank shares surged to a record after it swung to a quarterly profit thanks to gains from Nvidia Corp. and startups, an affirmation for Masayoshi Son’s bets on artificial intelligence. Sony shares extended gains after the technology firm posted upbeat earnings, boosting its operating income guidance for the full year.

Elsewhere, China’s central bank may inject long-term liquidity into the market in the second half of the year through a timely reserve requirement ratio (RRR) cut, according to a report by the Shanghai Securities News Friday, citing analysts.

Meanwhile, Trump signaled new sanctions on Russia could land as early as Friday. Treasury Secretary Scott Bessent also added that China levies “could be on the table” over the buying of Russian oil.

The gains in Asia came after the S&P 500 closed Thursday little changed, halting a rally that drove stocks to the brink of a record.

Whether or not the blistering rally in American equities is about to cool, some big firms have warned clients to prepare for a near-term pullback amid sky-high valuations. Added to bulls’ worries is seasonality. August and September have historically been the two worst months for the S&P 500.

“We talk about the potential for ‘air pockets’ in this current environment based primarily on headline risk, which remains elevated in our view,” said Dan Wantrobski at Janney Montgomery Scott. “This renders them vulnerable to pullbacks as we enter the second half of 2025.”

Meantime, Fed Governor Christopher Waller is emerging as a top candidate to serve as the central bank’s chair among President Trump’s advisers as they look for a replacement for Jerome Powell, according to people familiar with the matter.

Trump said he had chosen Council of Economic Advisers Chairman Stephen Miran to serve as a Fed governor. The US president said that Miran, who will need to be confirmed by the Senate, would only serve the expiring term of Adriana Kugler, which expires in January.

“Having more dovish Federal Reserve governor on the table is definitely better,” said Ivy Ng, a CIO at DWS, said in a Bloomberg TV interview. “But in the end, the Federal Reserve is still more data driven, so we focus a lot on the economic data.”