FX.co ★ Japanese Shares Trim Losses as Trade Deal Hopes Emerge

On Wednesday, the Nikkei 225 index dropped by 0.56% to conclude at 39,762, while the broader Topix Index saw a slight decline of 0.21% to settle at 2,826. This followed an initial deeper downturn mitigated somewhat by reassurances from Japanese officials concerning ongoing efforts to secure a mutually beneficial trade agreement with the United States. However, specifics on potential compromises were not furnished. U.S. President Donald Trump intensified the pressure, labeling the trade talks with Tokyo as "really hard" and intimating a potential increase in tariffs on Japanese imports to as high as 35%. This threat was based on dissatisfaction with Japan's limited purchases of American rice and automobiles, contributing to investor jitters. Further exacerbating market concerns, Federal Reserve Chair Jerome Powell noted that interest rates might have been reduced already if not for the inflationary pressures resulting from Trump's tariffs. Among the notable stocks seeing declines were Disco, which fell 3.7%, Fujikura, with a 4.0% drop; Advantest, down by 3.2%; Mitsubishi Heavy Industries, declining by 3.6%; and IHI Corp, which decreased by 4.6%.