Japan’s market is rallying, but bond markets are flashing warnings. With rising yields, political uncertainty, and fading trust, the current surge may not hold for long.

Japan’s Topix share index closed within a whisker of a record high and government bonds slumped after a long-awaited trade deal with the US spurred an explosive day for Tokyo’s financial markets.

Japan trade deal boosts Japanese equities and benefits Franklin FTSE Japan ETF, but faces issues with tariffs and market trends. Click for my FLJP update.

With the powerful Japanese car industry being a particular focus of the deal, Toyota Motor ( TM 13.64%) was a major beneficiary of that sentiment. The storied automaker 's stock popped by nearly 14% over the course of that day, easily beating the 0.8% bump of the S&P 500 index.

Asian shares have rallied, with Tokyo's benchmark Nikkei 225 index up more than 3% after Japan and the U.S. announced a deal on President Donald Trump's tariffs.

On July 22, Japan's stock market experienced significant volatility due to election uncertainties. The Nikkei 225 index rose over 1% but later fell by 0.60%, while the broader TOPIX index also declined by approximately 0.

Asia-Pacific markets traded mixed on Tuesday, despite overnight gains on the S&P 500 and Nasdaq, driven by optimism over strong corporate earnings. Investor caution intensified ahead of the August 1st U.

World markets are mixed after U.S. stock indexes hit new records. Oil prices fell and U.S. futures were little changed.