Tech, autos boost Japan's Nikkei as trade war worries ease

Japan's Nikkei share average rose to a three-week high on Thursday, tracking a tech-led rally on Wall Street overnight, as the White House signalled a willingness to de-escalate its trade war with China.

A Financial Times report that U.S. President Donald Trump may exempt car companies from some tariffs lent additional support to auto shares.

The market initially enjoyed the broad support of a retreat in the yen's value against the dollar, although a rebound on Thursday contributed to Japan's stock indexes paring gains into the close.


The Nikkei ended the day up 0.5% at 35,039.15, near the session low but held above the psychologically significant 35,000 level. It earlier advanced as much as 1.2% to touch 35,287.95 for the first time since April 2, when Trump stunned world markets with his far more aggressive-than-anticipated "Liberation Day" reciprocal tariffs.

The broader Topix rose 0.3%.

On Wednesday, US treasury secretary Scott Bessent said that the current astronomical levies between the United States and China are not sustainable and "a break between the two countries in trade does not suit anyone's interest," signalling the White House's willingness to talk.

Japanese Finance Minister Katsunobu Kato will meet Bessent in Washington later in the day on the sidelines of International Monetary Fund and World Bank annual meetings.

Ahead of that, Bessent said he does not have specific currency targets in mind as part of bilateral trade talks, a reversal from Trump's accusations earlier this month that Tokyo was intentionally weakening its currency to help exporters.

The auto sub-index rose 1.8% to be among the best performers from the Tokyo bourse's 33 industry groupings.

Toyota Motor, which announced an additional $88 million investment in a plant in West Virginia, advanced 2.9%.

Chip shares won big, with Tokyo Electron and Advantest the Nikkei's two top movers in index-point terms.

Nintendo jumped 5.6% as early demand for the upcoming Switch 2 outstripped the video game maker's ability to deliver the gaming console.

Robot maker Fanuc advanced 1.32% on strong financial results, even as it withheld forecasts for the current fiscal year due to uncertainties around global trade, with Japan's earnings season picking up momentum this week.

"If the number of companies withholding full-year guidance increases, so will the sense of uncertainty about corporate performance, and that will be a weight on the stock market," said Nomura strategist Maki Sawada.

"This is a theme that investors need to keep an eye on."