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Asian shares cheers Trump announcement of Japan trade deal

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U.S.-China officials to discuss trade deal extension in

Stockholm

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Wall Street mixed as tariffs impact corporate earnings

By Stella Qiu

SYDNEY, July 23 (Reuters) - Japanese shares led an Asian

share market rally on Wednesday after U.S. President Donald

Trump announced a trade deal with Japan and fuelled hopes of

more to come, offsetting mixed U.S. earnings that highlighted

the drags from higher tariffs.

Trump late on Tuesday announced a trade deal with Tokyo

that he said will result in Japan investing $550 billion into

the United States and paying a 15% reciprocal tariff. It

followed an agreement with the Philippines that will see the

U.S. collect a 19% tariff rate on imports from there.

"Though details are not yet available, it is commendable

that the 25% baseline tariff was avoided," Norihiro Yamaguchi,

senior Japan economist at Oxford Economics.

"In the short run I think lowered uncertainty will be

welcomed in the equity market. But global trade policy

uncertainty will remain high, meaning that today's conclusion

will provide little upside to the real economy."

The U.S. president also said representatives from the

European Union are coming for trade negotiations on Wednesday.

In another positive development, U.S. and Chinese officials

will meet in Stockholm next week to discuss an extension to the

August 12 deadline for negotiating a trade deal, Treasury

Secretary Scott Bessent said.

Japan's Nikkei rose 1.7% on Wednesday as shares of

automakers surged. Mazda Motor ( MZDAF ) rallied 12% while Toyota

Motor ( TM ) jumped 10%.

MSCI's broadest index of Asia-Pacific shares outside Japan

advanced 0.2% underpinned by higher openings in

Australia and South Korea.

The yen initially gained on the news, but was last

flat at 146.68 per dollar.

Nasdaq futures climbed 0.1% and S&P 500 futures

gained 0.2% in Asia.

Overnight, Wall Street closed mixed as investors assessed a

spate of varied earnings and signs that Trump's trade war is

hitting corporate profit margins. General Motors ( GM ) tumbled

8.1% after the automaker reported a $1 billion hit from tariffs

to its quarterly results.

Investors are now waiting for results from Tesla

and Google's parent Alphabet - the Magnificent 7

stocks that have driven much of the market rally fuelled by AI

optimism.

In the foreign exchange market, the dollar index was

flat at 97.45 against its major peers, having slipped 0.4%

overnight to mark the third straight day of declines.

Benchmark 10-year U.S. Treasury yields ticked up

2 basis points to 4.3579, after slipping 3 bps overnight, as

Trump continued to lash out at Federal Reserve Chair Jerome

Powell for not cutting interest rates, although Bessent said

there was no need for him to step down immediately.

Bessent did say the Fed's vital independence on monetary

policy is threatened by its "mandate creep" into non-policy

areas and he called on the U.S. central bank to conduct an

exhaustive review of those operations.

Spot gold prices were steady at $3,429 an ounce.