The new U.S.-Japan trade deal lowers tariffs and strengthens economic ties, helping challenge China's regional aggression and instability.

Japan’s central bank policymakers are expected to keep rates on hold this week, despite the trade deal with the U.S. relieving some uncertainty over tariffs and strengthening the case for tighter policy.

President Trump's trade strategy, marked by elevated tariffs, is yielding agreements with nations like the EU, Japan, and Vietnam. The EU accepted 15% US tariffs and committed to significant purchases and investments.

After months of fraught negotiations with the United States, Japan clinched a deal just days before punitive tariffs were scheduled to take effect.

The U.S. is significantly reliant on the Taiwanese company for advanced chip manufacturing, raising concerns due to its proximity to China.

Trump said the U.S. will impose a 15% tariff on Japanese imports under the agreement, which he hailed as "maybe the largest deal in history."

The deal imposes 15% tariffs on Japanese cars and other goods, one of the more favorable rates. While the start date and other basic elements are still unknown, Treasury Secretary Scott Bessent warned this week that the US would monitor implementation and bump the rate up to 25% if Trump isn’t satisfied.

Japan's government said on Friday that profits from a $550 billion investment package agreed in this week's tariff deal with the U.S. would be split between Japan and the U.S. according to the degree of contributions by each side.