Japan stocks rise on tariff calm, Toyota surges on buyout report

Japan’s shares rose to levels not seen since before Donald Trump’s so-called reciprocal tariff announcement, as progress in trade talks and a slightly weaker yen fueled risk appetite.

Gains in Toyota Motor Corp. and its group companies also boosted the broader Topix Index, with the carmaker rising over 5% after a report that chairman Akio Toyoda has proposed a buyout of Toyota Industries Corp.   

The Topix climbed as much as 1.5% to 2,667.11 in morning trade and was on track to close above April 2, before the new US levies were announced.

The export-heavy Nikkei 225 Average climbed as much as 1% to 36,075.26 and was also poised to close higher than on April 2. 

Tariff talks

Toyota Industries’ shares are set to surge by their daily limit of 23% on hopes of a premium from a potential buyout, after Bloomberg reported Toyota Motor chief Toyoda is considering taking it over. 

Japanese stocks’ recovery has been helped by hopes that ongoing talks will result in lower US levies on imports from Japan, easing concerns about the economic impact of Trump’s policies. 

“For now, the tariff situation seems to be calming down, which is fueling some repurchase activity,” said Yutaka Miura, senior technical analyst at Mizuho Securities.

Monday’s gains were also fueled by the yen’s weakness against the dollar after a fall over the weekend, said Miura. The drop follows meeting between Japanese Finance Minister Katsunobu Kato and US Treasury Secretary Scott Bessent on Thursday, where discussions did not touch on specific currency levels. 

READ: Toyota Industries Shares Set to Surge on Possible Buyout (1)

Investors are optimistic that Japan might emerge stronger from tariff-induced volatility than other developed markets, as it was among the quickest to approach the US for negotiations.

Self-inflicted

“Japan might be treated a little bit better than some other parts of the world,” owing to its high level of investment in the US and the two countries’ strong defense ties, said Daniel Carter, investment manager of Japanese equities at Jupiter Asset Management Ltd.

But with Trump’s long-term trade policy still unclear, it’s too soon to assume Japanese stocks are off the hook, Carter added. The President paused his “reciprocal” tariffs for 90 days earlier this month, but on Friday said another reprieve was unlikely. 

“If you see a self-inflicted global recession because of rising tariff barriers, then Japanese companies, which are pretty well-connected to the global economy, will of course suffer,” Carter said.