Japan's Nikkei share average climbed on Tuesday, propelled by a sharp rally for carmakers after US President Donald Trump hinted about granting the sector some kind of tariff reprieve.
The Nikkei gained 1% to 34,321.92, with the top eight performers all carmakers or auto component manufacturers. The broader Topix added 1.3%.
Toyota surged 5.2% in the morning session, buoying the Tokyo Stock Exchange's auto and parts maker index by 4.6%, making it the standout performer among the bourse's 33 industry groupings.
Sumitomo Electric Industries led individual gains with a 6.6% jump, followed closely by a 5.9% climb in Denso, a key supplier within the Toyota Group.
Speaking on Monday at the White House, Trump said he was considering a modification to the 25% tariffs imposed on foreign car and car parts imports from Mexico, Canada and other places. The tariffs could raise the costs of a car by thousands, and Trump said car companies "need a bit of time because they're going to make them here".
Japan carmakers propel Nikkei after Trump hints at tariff relief
Image: Kevin Dietsch/Getty Images
Japan's Nikkei share average climbed on Tuesday, propelled by a sharp rally for carmakers after US President Donald Trump hinted about granting the sector some kind of tariff reprieve.
The Nikkei gained 1% to 34,321.92, with the top eight performers all carmakers or auto component manufacturers. The broader Topix added 1.3%.
Toyota surged 5.2% in the morning session, buoying the Tokyo Stock Exchange's auto and parts maker index by 4.6%, making it the standout performer among the bourse's 33 industry groupings.
Sumitomo Electric Industries led individual gains with a 6.6% jump, followed closely by a 5.9% climb in Denso, a key supplier within the Toyota Group.
Speaking on Monday at the White House, Trump said he was considering a modification to the 25% tariffs imposed on foreign car and car parts imports from Mexico, Canada and other places. The tariffs could raise the costs of a car by thousands, and Trump said car companies "need a bit of time because they're going to make them here".
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Despite the surge in auto-sector shares and concerns over potential trade policy reversals from Trump, the Nikkei's second straight 1% gain is likely a welcome relief for investors. Last week, they were whipsawed by extreme market swings, with alternating days of sharp sell-offs and rebounds of up to 9%.
"For the first time in a while, trading is back to what you would call normal ranges," said Kazuo Kamitani, a strategist at Nomura Securities.
At the same time he cautioned market moves may pick up again with earnings season in Japan and the US gathering pace this week.
Japan and the US are also due to begin trade talks on Thursday in Washington.
"Trump says the aim is to get factories moved to the US," said Kamitani.
"Is that market friendly? I would say no."
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