Japan Signals Challenges In Lowering U.S. Tariffs On Vehicle Imports

Akira Ito
20 May, 2025
Tokyo

Stock market indexes in Tokyo lacked direction amid a lack of domestic news, and the yen edged higher. 

The Nikkei 225 Stock Average and the broader Topix index closed nearly unchanged after a volatile session, and investors awaited earnings results later in the week. 

Ongoing negotiations between Japan and the U.S. are not likely to yield a sharp decrease in the U.S. tariff rates, especially on the vehicle imports. 

Japan's top negotiator, Ryosei Akazawa, is likely to meet the U.S. Trade Representative, Jamieson Greer, on Friday for the third round of high-level talks; however, the plans are tentative. 

The U.S. has slapped additional 25% tariffs on vehicles imported from Japan, but it is not clear if there are any additional duties on parts and assemblies. 

Moreover, Japanese companies are looking to accelerate their plans to produce more vehicles at their factories in the U.S. and Mexico, but the lack of clarity on the final trade agreement is delaying the plan of action. 

For now, Toyota Motor, Honda Motor, and Nissan Motor are likely to face at least $500 of increased costs per vehicle sold in the United States, according to a preliminary study conducted by Ticker.com. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 0.04% to 37,483.36, and the broader Topix index declined 0.1% to 2,735.52. 

The yen edged higher to 144.42 against the U.S. dollar as global investors continue to purchase Japanese assets after Moody's Rating, the last of the three major rating agencies, stripped U.S. debt of its top rating. 

Toyota Industries Corp. increased 8.6% to ¥17,940.0 amid local reports speculating that the company is set to be acquired by Akio Toyoda, Chairman of Toyota Motor, for $41.5 billion.