US-Japan Trade Agreement Triggers Market Turmoil as Japanese Stocks Hit Record Highs

A surprise US-Japan trade deal sent Japanese equities to record highs while triggering a government bond sell-off. Analysts warn that BOJ policy signals and upcoming earnings could shape market direction.Key TakeawaysUS-Japan trade agreement jolts markets, sending Japanese stocks to all-time highs.Government bond sell-off intensifies as investors reassess local risks.Bank of Japan’s policy meeting next week could determine whether rates remain unchanged or a September hike becomes likely.Corporate earnings from Fujitsu, Tokyo Electron, and Nissan will provide clues about resilience under long-term tariff pressures.Trade Deal Sparks Market ShockAn unexpected trade agreement between the United States and Japan caused sharp volatility across financial markets, according to Jinshi Data.The deal triggered a rally in Japanese stocks to record highs, while government bonds faced heavy selling as investors reassessed domestic risks and interest rate expectations.BOJ Rate Decision Looms LargeMizuho Bank’s head of economics and strategy noted that the market will need to “re-examine local risks” in the coming days.While the Bank of Japan (BOJ) is widely expected to keep rates unchanged at its policy meeting next Thursday, any signal of a possible September rate hike could weigh on equities and bonds.Corporate Earnings in FocusMarkets are also watching the financial results of major Japanese companies — including Fujitsu, Tokyo Electron, and Nissan Motor — for signs of resilience in a long-term high-tariff environment.These earnings reports will help investors assess whether Japanese firms can withstand the impact of trade policy changes while maintaining profitability.