Japan's stocks advanced for the second consecutive day after the U.S. agreed to limit the increase in tariffs to 12.5%, sharply higher than the 3% in the previous year.

Benchmark indexes hovered near 40-month highs amid improving prospects of a U.S.-China trade agreement. The latest U.S.-Japan agreement confirmed that the U.S. president always backs down from his initial aggressive demands.

The LDP-Komeito ruling coalition lost its majority in the Upper House, and the government with a minority in both houses is likely to face more pressure to expand fiscal spending.

Investors lacked enthusiasm and awaited possible new measures to revive the property market and tackle excessive competition in renewable energy, electric vehicle, and lithium battery manufacturing.

Japan's political uncertainty ahead of this weekend's election kept weekly gains in check, and the yen hovered at a three-year low. Consumer price inflation slows to a three-month low, and core inflation eases to a 7-month low.

Benchmark indexes in China and Hong Kong extended weekly advances, tracking gains in New York. Internet platform operators and EV makers led gainers, and property developers led decliners.

Japan's trade surplus narrowed sharply in June after exports fell and imports rose from a year ago. Canada's Alimentation Couche-Tard abandoned its $47 billion bid to acquire Seven & I, the parent company of Seven Eleven.



Chinese authorities pledged to curb excessive competition in the electric vehicle market and take steps to stabilize the industry and price monitoring.

Japan's benchmark indexes were under pressure amid worries that the ruling coalition may lose its grip on power after the Upper House election on Sunday.

China's stocks struggled to advance amid heightened uncertainty about the U.S. trade policy and persistent weakness in the residential property market.

The rebound in tech stocks supported the advance in benchmark indexes in Tokyo ahead of the release of international trade and inflation data.

China's economy expanded at a healthy pace, supported by the government's trade-in program and investment in infrastructure.

Japan's machine tool orders edged higher from a year ago in May but decreased from the previous month amid weakness in export orders.

China's exports and trade surplus expanded in the first half, despite a widening rift with the U.S., driven by a rise in exports of renewable energy products, electrical vehicles, and household appliances.



Japan's policymakers and politicians intensified debate to reduce reliance on U.S. exports and defense amid growing resistance to the unilateral tariffs proposed by the U.S. president.

Stocks in China advanced and extended weekly gains ahead of the start of the earnings season, the Politburo meeting, and a possible U.S. rate cut.