European stocks rose sharply due to expectations for a trade agreement between the European Union and the U.S., along with Japan reaching a car tariff reduction agreement with Washington.
This agreement not only pushed Japanese stocks to their highest level in a year but also sent positive signals to the automotive sector and added momentum for other tariff negotiations in the region.
MAIN CONTENT
European and Japanese stocks soared thanks to the prospect of a new U.S.-Japan trade agreement.
The U.S. car tariff reduction agreement with Japan significantly revives the automotive industry in Japan.
Expectations for global tariff negotiations are boosting investor confidence and having a positive impact on the financial markets.
How does the U.S.-Japan agreement impact stocks and the market?
The trade agreement announced by President Donald Trump has helped the market react positively immediately. According to Reuters, reducing Japan's export car tariffs to below 15% from the initially proposed 25% has sparked hopes for similar agreements in the future.
The Euro STOXX 600 index rose by 1% along with a 3.6% surge in the automotive stock group, while stocks in the UK also reached record highs. Deutsche Bank noted that this agreement could pave the way for other trade agreements to avoid the high tariffs expected to take effect on August 1.
I just signed the largest trade agreement in history, potentially the largest with Japan.
Donald Trump, President of the United States, July 2025
On Wall Street, S&P 500 and Nasdaq futures saw slight gains, reflecting investor optimism about positive trade developments.
What is the impact of the trade agreement on Japan's economy?
This agreement helps mitigate major trade risks for Japan, opening up the possibility for the Bank of Japan to raise interest rates to control inflation. The automotive sector, which accounts for about 25% of exports to the U.S. and nearly 3% of Japan's GDP, is the sector that benefits the most.
Stock prices of major companies like Nissan, Toyota, and Honda all rose sharply, with Mazda recording an 18% increase and Toyota rising by 14%. This has pushed the Japanese stock market to a one-year high, bolstering confidence in economic recovery.
The trade agreement with the U.S. alleviates a major risk for the economy while facilitating a more flexible monetary policy.
Economist Luu Quang Minh, National Economics University, July 2025
The bond market reacted with the yield on 10-year Japanese government bonds rising by 8.5 basis points to 1.585%, indicating expectations for a more proactive monetary policy.
How will other tariff negotiations proceed in the near future?
Under the positive impact of the U.S.-Japan agreement, other countries, especially the European Union, are expected to push for tariff negotiations to reach an agreement before the August deadline. However, the EU is still preparing a plan to respond with tariffs if no results are achieved.
At the same time, the U.S. and China are expected to continue meeting in Stockholm next week to discuss the possibility of extending trade negotiations after the deadline of August 12, according to U.S. Treasury Secretary Scott Bessent.
The MSCI Asia-Pacific index (excluding Japan) rose by 1.2% due to positive trade expectations. China also saw a slight recovery with blue-chip stocks jumping 0.7% before adjusting.
How is the profit situation of U.S. companies affected by the trade war?
The latest profit report shows that the trade war has reduced the profit margins of many U.S. companies. General Motors fell sharply by 8.1% after reporting a one billion dollar loss due to tariffs.
Conversely, investors are expecting the business results of Tesla and Alphabet, two members of the 'Magnificent 7' stock group (which includes Apple, Meta, Amazon, Microsoft, Nvidia), which have led the market rally thanks to the AI wave.
Frequently asked questions
How does the U.S.-Japan trade agreement reduce car tariffs?
The agreement allows for a reduction in U.S. car tariffs applied to Japan to below 15% instead of the initially proposed 25%, helping Japanese car manufacturers save costs and enhance competitiveness.
How does this agreement affect the stock market?
Japanese automotive stocks surged, and the European stock index also rose due to expectations of expanded trade cooperation, boosting global investor confidence.
Will the tax cuts help Japan's economy recover sustainably?
This is a positive signal that helps reduce trade risks, allowing the Bank of Japan to flexibly adjust monetary policy to control inflation, but further monitoring of global economic developments is needed.
How will the European Union continue its trade policy?
The EU is preparing retaliatory measures if the negotiations with the U.S. do not yield results, while participating in tariff discussions to maintain benefits for the bloc.
What is the impact of the trade war with China and the U.S. currently?
Although tensions remain, negotiations will continue to extend time and mitigate negative impacts, somewhat supporting the financial markets in the Asia-Pacific region.
Source: https://tintucbitcoin.com/thoa-thuan-nhat-my-day-tich-tru-nhien-lieu/
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