(Bloomberg) -- Japanese steelmakers climbed after President Donald Trump and his Japanese counterpart Shinzo Abe signed a limited trade deal and the U.S. withdrew the threat of auto tariffs that could have hurt demand for metals.
JFE Holdings Inc. led gains, climbing as much as 5.5% as benchmark indexes were little changed. A sticking point in the more than yearlong talks was Abe’s need for a guarantee that the U.S. wouldn’t impose national security tariffs on imported automobiles and auto parts, which Japanese steelmakers had warned would have a significant impact on them.
“The deal has alleviated a risk that Japanese car exports will decline, cutting use of steel for vehicles,” said Takeshi Irisawa, an analyst at Tachibana Securities Co. in Tokyo. “The agreement will likely make it harder for the U.S. to impose anti-dumping duties on Japanese steel products.”
JFE closed 3.8% higher, one of the top performers in the Nikkei 225 index. Nippon Steel Corp. rose 2.5% and Kobe Steel Ltd. gained 2.1%.
JFE and Nippon Steel also gained after Bank of America Merrill Lynch upgraded the two companies to buy from neutral on expectations earnings should recover next fiscal year after near-term weakness.
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