The Nikkei 225 rose 0.26% to close at 39,689, while the broader Topix Index added 0.17% to 2,817 on Tuesday, recouping some losses from the previous session after US President Donald Trump announced that Japan will face a 25% tariff starting Aug. 1, allowing more time for negotiations. While lower than the earlier threat of a 35% levy, the new rate remains significantly higher than the baseline 10% tariff imposed on most countries, adding pressure on Tokyo to reach a trade deal with Washington. Japanese Prime Minister Shigeru Ishiba said Japan will continue negotiations with the US in pursuit of a mutually beneficial agreement. On the domestic front, data showed Japan’s current account surplus exceeded expectations in May, offering additional support to sentiment. Among the notable gainers were Fujikura (+5.5%), Furukawa Electric (+6.5%), Sanrio (+4%), Advantest (+2.5%), and Tokyo Electric Power (+6.2%).
The Shanghai Composite rose 0.7% to close at 3,497 while the Shenzhen Component gained 1.47% to 10,588 on Tuesday, with mainland stocks settling at multi-month highs as Trump announced new tariff rates on 14 countries and extended the deadline to Aug. 1, allowing more time for negotiations. However, tensions remained as Beijing warned Washington against reigniting trade frictions by reinstating tariffs on Chinese goods next month. China also threatened retaliation against countries that cooperate with the US in efforts to exclude it from global supply chains. On the domestic front, investors were cautious ahead of key inflation and trade data due later this week, which could offer further insight into the economic fallout from shifting US-China trade dynamics. Technology stocks led the gains, with strong performances from Foxconn Industrial (+10%), Zhongji Innolight (+7.2%), and Sungrow Power (+9.5%).
The BSE Sensex was nearly flat, trading around 83,461 in early deals on Tuesday, marking its second straight session of muted movement, as traders remained cautious amid uncertainty over US trade policies. Market participants continued to monitor US-India trade negotiations following President Trump's announcement of new tariffs targeting several trading partners. Caution also prevailed ahead of the release of consumer and producer price data from India's top trading partner, China, amid persistently weak domestic demand in the mainland. Investors were also awaiting the release of the Fed’s meeting minutes for guidance on the central bank’s monetary policy path. Gains in the tech, financial services, and banking sectors offset declines in auto and healthcare. Kotak Mahindra surged 3.5% and NTPS rose 1.1%, while Titan plunged 5.2%, and HCL Tech fell 1.0%.
