International News 25 July 2025
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Japan’s Topix Hits All-Time High After U.S. Trade Deal Boosts Market Sentiment
Japanese equities surged on Thursday, July 24, 2025, as investor confidence soared following the long-awaited trade agreement between Japan and the United States. The Topix index climbed 1.4% to a record-high 2,968.48, while the Nikkei rose by the same percentage to 41,740.71, marking its highest level since July last year. The rally was led by the banking sector, with the Topix Banks Index jumping 3.6% on growing expectations that economic clarity from the tariff deal could allow the Bank of Japan (BOJ) to resume interest rate hikes later this year. While the BOJ is set to meet next week, traders are focusing more on the October meeting, where the chances of a rate hike are seen as evenly split. The positive market momentum extended gains from the previous day, when the Topix rose 3.2% and the Nikkei surged 3.5%. The trade deal announced by U.S. President Donald Trump included a reduction in base tariffs and a cut in the special automotive duty to 15%, easing fears of a steeper 25% rate. This development also lifted transportation equipment stocks, with the Topix sub-index for the sector rising 0.8%, building on an impressive 11% gain from the prior session. The agreement is seen as a catalyst for further economic cooperation and market stability between the two nations.
South Korea’s Economy Records Fastest Growth in Over a Year in Q2 2025
South Korea’s economy grew at its fastest quarterly pace since early 2024, expanding by 0.6% in Q2 2025, driven by a rebound in consumer spending and a surge in tech exports, particularly semiconductors. According to preliminary data released by the Bank of Korea on July 24, this growth exceeded market expectations of 0.5%. The recovery follows a contraction of 0.2% in Q1 2025, which was attributed to political turmoil and trade pressure from the U.S. The resolution of political uncertainty—after the impeachment of President Yoon Suk Yeol and a snap presidential election in June—played a key role in stabilizing sentiment and supporting economic activity. Exports jumped 4.2% quarter-on-quarter, marking the strongest increase since Q3 2020, as global demand for Korean tech products recovered. Household consumption rose 0.5%, although fixed asset and construction investments both declined by 1.5%. On a yearly basis, GDP rose 0.5%, improving from flat growth in the previous quarter and slightly ahead of analyst forecasts. Meanwhile, the U.S. has temporarily suspended a 25% reciprocal tariff on Korean goods until August 1 to allow for trade negotiations, though certain sectors like automotive and steel have already been affected by product-specific duties.
Trump Announces Landmark US-Japan Trade Deal Amid Global Negotiation Blitz
President Donald Trump announced on Tu esday (July 22, 2025) that the United States and Japan have reached a long-anticipated trade deal, which includes a 15% tariff on Japanese imports, notably automobiles. In a post on Truth Social, Trump highlighted the deal’s $550 billion Japanese investment pledge in the U.S. and expanded market access for American goods such as rice, trucks, and agricultural products. Although the official reduction from the 25% auto tariff was not confirmed by the White House, Japan’s NHK reported the cut to 15%, quoting government officials. The announcement sent Japanese equities soaring, with auto giants like Toyota, Honda, and Nissan each jumping more than 6%, and also lifted U.S. futures and the yen. The agreement—hailed by economists as a potential shield against Japanese recession risks—comes as part of a broader effort by Trump to finalize multiple trade pacts before the looming August 1 deadline, when higher tariffs are set to take effect. While Trump shared details through social media, verification of the full scope remains pending, and Japan’s Prime Minister Shigeru Ishiba declined to comment amid domestic political pressure following electoral losses. The automotive sector remains a key battleground, with Japan exporting over $55 billion worth of vehicles to the U.S. in 2024, compared to just $2 billion in reverse. Additionally, the two sides are reportedly exploring joint ventures, including a gas pipeline project in Alaska, marking a deepening strategic alignment.