Japanese Stocks Rebound on Tariff Talk Hopes, Weaker Yen

(Bloomberg) — Japanese stocks rebounded after a call between Prime Minister Shigeru Ishiba and US President Donald Trump spurred hopes of a tariff deal, allaying some worries about the economic impact of Trump’s new levies.

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The broader Topix rose as much as 6.3% to 2,431.85 in early Tokyo trade, with the Nikkei 225 Stock Average gaining as much as 6.1% to 33,037.38, the biggest intraday rise for both gauges since August.

Exporters like electronics makers contributed most to the Topix’s rise, boosted further by a weaker yen against the dollar as the risk-off mood receded. The Japanese currency weakened as much as 0.2% to 148.12 per dollar on Tuesday.

Banks were also strong, with the Topix’s banking subindex rising by more than 10%, after losing over 23% in the past three sessions.

Despite Tuesday morning’s climb, the Topix has still fallen more than 8% since Trump announced a 24% levy on Japan on April 2, with the blue-chip Nikkei, which entered a bear market Monday, losing more than 7%.

Tuesday’s rebound is fueled by a newfound “optimism, with bilateral trade talks set to kick off imminently,” wrote Andrew Jackson, head of Japan equity strategy at Ortus Advisors, in a note.

Following Ishiba and Trump’s call on Monday evening, US Treasury Secretary Scott Bessent said Japan may get priority in tariff talks, given it’s an important military and economic ally.

“The US has no real beef with Japan compared to China, and it would be easy for Japan to import more US-made military equipment,” said Jackson.

Read: US-Japan Trade Talks Set to Kick Off After Trump-Ishiba Call