0547 GMT - Morningstar revises its 2026 earnings forecasts for Japanese automakers after the U.S. trade deal. The reduction of auto tariffs to 15% is better than the base case 25% reflected in Morningstar's valuations of Toyota, Nissan and Honda, says Lorraine Tan, director of equity research (Asia), in an email. Nissan and Honda are more sensitive to U.S. tariffs given their smaller U.S. production presence. "Hence, a fall in tariff to 15% from 25% will see our fiscal 2026 forecast of Nissan's operating loss narrow by 33%, while Honda's and Toyota's profit will improve by 28% and 8%, respectively," she says. The overall tariff deal is generally positive to the outlook for Japanese stocks as it takes the bear case scenario for average 32% tariffs off the table, she adds. (monica.gupta@wsj.com)

(END) Dow Jones Newswires

July 23, 2025 01:47 ET (05:47 GMT)

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