(Bloomberg) — Japanese stocks rebounded after a call between Prime Minister Shigeru Ishiba and US President Donald Trump spurred hopes of a tariff deal.
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The broader Topix rose 6.3% to close at 2,432.02 in Tokyo while the Nikkei 225 Stock Average gained 6% to 33,012.58. The moves in both gauges were the biggest increase since August.
The jump came amid optimism that Japan might strike a trade deal with the US to reduce or avert a 24% levy on imports, set to come into effect Wednesday. Despite Tuesday’s gains, both Japanese stock indexes have fallen over 7% since the tariffs were announced on April 2.
“There was a feeling that the market was oversold yesterday, and investors were looking for a catalyst to buy back in,” said Kazuhiro Sasaki, head of research at Phillip Securities Japan.
Ishiba’s call with Trump, and US Treasury Secretary Scott Bessent’s subsequent comments that Japan may be a priority in tariff negotiations, have been taken as a sign that “talks are moving in the right direction,” said Sasaki. This is giving investors some security and fueling a rebound in shares.
Exporters like electronics makers contributed most to the Topix’s rise, with the move boosted by the yen’s weakness against the dollar over the course of the past two days. Hitachi Ltd.’s shares rose 14%, while Toyota climbed 7.2%.
Read: US-Japan Trade Talks Set to Kick Off After Trump-Ishiba Call
Banking stocks also climbed, with the Topix’s banking subindex rising 11%. Mitsubishi UFJ Financial Group Inc. gained as much as 13% at one point, the most since Aug. 6, when the market rebounded from a rout triggered by an unforeseen Bank of Japan rate hike.
Japan’s benchmark 10-year bond yield climbed around 15 basis points to 1.25% as the risk-off mood eased on hopes negotiations might soften the economic blow of tariffs.
–With assistance from Aya Wagatsuma.
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