Trade Deals Lift Emerging Markets, Investors Breathe Easy
Emerging market stocks rose after the U.S. signed trade deals with Japan, impacting tariffs positively. Japan's Nikkei surged by 3.5%. Markets are optimistic but cautious about global economic impacts, while emerging markets like Turkey and South Africa witnessed gains. Inflation and peace talks remain key focus areas for investors.
Emerging market currencies edged higher, and stocks saw a boost on Wednesday following the U.S.'s signing of trade agreements with trading partners, enhancing optimism about averting President Trump's most severe tariff threats.
On Tuesday, the U.S. reached a deal with Japan to reduce steep tariffs on Japanese imports and secured substantial U.S.-bound investment from Tokyo. However, Trump announced a new 19% tariff rate on Philippine imports, slightly less than the previously threatened 20%.
Markets showed resilience amid U.S. duties, with Japan's Nikkei closing at a year-high. Uncertainty persists about the global economic impact of these tariffs. Meanwhile, optimism spread as stock markets in South Africa and Turkey rose, and investors focused on inflation trends and ongoing peace talks between Russia and Ukraine in Turkey.
(With inputs from agencies.)
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