Japanese equities experienced a remarkable upswing on Tuesday, marked by a significant rise in both the Nikkei 225 and the broader Topix Index. The Nikkei 225 soared 6.03% to settle at 33,012, while the Topix Index climbed 6.26% to 2,432. This surge was largely driven by investor optimism due to signs of alleviating trade tensions between Japan and the United States. The optimism was stirred by news that U.S. President Donald Trump consented to trade negotiations with Japanese officials following a phone conversation with Japan's Prime Minister, Shigeru Ishiba. U.S. Treasury Secretary Scott Bessent indicated that Japan is likely to be prioritized for tariff alleviation owing to its prompt engagement. Concurrently, Japan's Finance Minister Katsunobu Kato vowed to implement all necessary measures to counter the effects of U.S. tariffs, which may include potential financial support for affected domestic enterprises.
The financial sector spearheaded the rally, with notable performances from Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho Financial, which saw impressive gains of 10.9%, 10.9%, and 13.5% respectively. Additionally, strong performances were observed in the automotive, consumer, and technology sectors, with significant gains noted for Toyota Motor (up 7.2%), Sony Group (up 7.0%), and Tokyo Electron (up 8.7%).
