The report further highlighted that key sub-indexes, such as output and new orders, declined at the fastest pace in four and three months respectively. Businesses remain wary of the impact from newly announced US tariffs, with many holding back on fresh investment and production.

Japan factory activity contracts in July as US tariffs weigh

A part of the deal, the US will invest $550 billion in Japan, focusing on supply chain resilience. Japan maintains its agricultural tariffs but pledges to increase imports of specific US goods. Steel and aluminum tariffs remain at 50%. 

US-Japan trade deal: Here are the 5 key takeaways

Even as Trump, in his usual 'go big, or go home' fashion, touts what he referred to as 'perhaps the largest deal ever made,' Tokyo has signalled caution. In a statement, Japanese Prime Minister Shigeru Ishiba said he would review the details before offering any official comment.

Trump claims US will get 90% of profits in 'largest deal' with Japan—Tokyo still reading the fine print, says need to review terms

As Trump threatens steep tariff hikes on Japan and the EU, global trade tensions rise; key sectors like autos and agriculture hang in the balance with major deals at stake before the looming July 9 cutoff.

Trump threatens higher tariffs as US-Japan trade row deepens

The recent turmoil in the bond market has prompted caution from the Bank of Japan (BOJ), especially following a weak auction of 20-year bonds, leading to soaring yields. 

BOJ keeps rates steady, slows bond taper,  what it means for Japan’s economy?

Business & Economy: Japan’s real GDP contracted an annualised 0.7 per cent in the January-March period highlighting the vulnerability of the export-heavy economy.

Japan’s economy contracts amid US tariff strains, India poised to overtake

U.S. President Donald Trump said, ''US-Japan trade deal is a game-changer''. Watch this video to know more.

U.S. President Donald Trump said, ''US-Japan trade deal is a game changer''

US, Japan ink trade agreements on farm, digital exports

Trump announces 'first stage' of 'phenomenal' Japan trade deal

US, Japan agree trade deal 'in principle'

Trump says sees possibility of US-Japan trade deal by May