Market Commentary: Wednesday 23rd July

President Donald Trump announced a trade agreement with Japan that includes a 15% tariff on Japanese exports to the US, significantly lower than the previously anticipated 25%. The Nikkei 225 Index surged over 2.5%, fueled by optimism surrounding improved trade relations with the US. He also stated that Japan will invest $550 billion into the US and open its markets to key American goods. Also in Japan, Prime Minister Ishiba is set to announce his intention to resign as soon as this month. The JPY saw a sharp move lower against the USD to the 147.20 level following the initial news report.

The Westpac-Melbourne Institute Leading Economic Index for Australia was flat in June, after a 0.1% gain in May. Westpac forecasts the Australian economy to expand by just 1.7% in 2025. The ASX 200 rose 0.5% this morning to 8,725, continuing its upward momentum from the previous session, supported by strong gains in gold-related stocks and major mining firms.

On the calendar, we have a series of US earnings ahead: Alphabet, Tesla, and IBM. We also have the ECB rate decision tomorrow.

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