US-Japan trade deal lifts Tokyo's Nikkei above 41,000 to a one-year high

Tokyo's Nikkei 225 index rose almost 4 percent after the United States and Japan announced a trade deal, climbing above 41,000 to its highest level in a year (trading in the week ending 23 July 2026).

Under the agreement, the US tariff on Japanese cars and auto parts falls from 27.5 percent to 15 percent, and in return Japan has pledged 550 billion dollars of investment and loans in the US economy and agreed to open its market to imports of trucks, rice and some agricultural goods. Automakers led the rally, with Toyota up more than 14 percent and Honda nearly 11 percent.

US Treasury Secretary Scott Bessent warned that the deal will be reviewed every three months and that a 25 percent tariff could return if investment pledges lag. The easing of trade tensions between the two large economies, at a time when West Asia geopolitical risk is weighing on global markets, helped improve risk sentiment across Asian equities.