Japan Leads Asia Higher as Tariff Talks Boost Carmakers – Europe Market Wrap

Asian shares rose as carmakers in Japan gained on optimism that the country will be able to secure lower auto tariffs in negotiations with the US.

The MSCI Asia Pacific Index rose 0.3% with Japan’s Topix Index gaining 1%. Toyota, which reports earnings Thursday, jumped 2.2%. Oil rose for the first time in five days, while a gauge of the dollar dipped. Treasuries edged lower with the yield on the 10- year rising 1 basis point to 4.22%. Equity-index futures for the US and Europe advanced 0.3%.

Indian stocks were little changed after the central bank kept the benchmark interest rate steady, as policymakers assess the impact of US President Donald Trump’s tariff shock on the country. Asian chip- related stocks and some pharmaceutical companies fell after Trump said he will announce levies on the sectors “within the next week or so.”

Japan’s chief trade negotiator Ryosei Akazawa is heading to Washington as Tokyo aims to urge the US to proceed with a cut to car tariffs as promised in last month’s trade deal. Tariff headlines are once again dominating with Trump saying he was “getting very close to a deal” with China, and India bracing for pain from Trump’s threats.

US Stocks are consolidating after their recent rally amid concerns over the direction of interest rates and weak economic data. After a soft jobs data Friday, the latest economic indicators have since complicated the Federal Reserve’s balancing act between taming inflation and supporting growth.

The US services sector effectively stagnated in July as firms – faced with tepid demand and rising costs – reduced headcount. The data, released Tuesday, painted a picture of a sluggish service economy wrestling with the fallout of higher tariffs, cautious consumers and uncertainty stemming from Trump’s policies.

Asian chip-related stocks declined after a stream of negative news, including a Taiwanese probe into an alleged theft of Taiwan Semiconductor Manufacturing Co.’s trade secrets. Shares of the chipmaker fell 1.7% Wednesday. Also, Advanced Micro Devices Inc. warned that its access to die crucial China market remains uncertain. Super Micro Computer Inc. tumbled after its results missed expectations.

Meanwhile, Trump also suggested he would impose increased tariffs on additional countries buying energy from Russia – including China – after saying earlier Tuesday that he would raise levies on Indian exports within 24 hours.

India is racing to contain die economic fallout from the threatened tariffs, which has left officials in New Delhi feeling unsure of how to respond. In other tariff news, Swiss President Karin Keller-Sutter arrived in Washington to make a last-minute bid for a deal to lower the 39% tariff imposed last week by Trump.