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Tokyo’s tariff envoy says US talks ‘constructive’

Tokyo’s envoy for US tariff talks in Washington said Thursday that the second round of negotiations between the two countries had been “frank and constructive.”Japan, a key US ally and its biggest investor, is subject to the same 10 percent baseline tariffs imposed on most nations plus steeper levies on cars, steel and aluminum.President Donald Trump also in early April announced “reciprocal” tariffs on Japan of 24 percent, but later put them on pause for 90 days along with those on other countries except China.”We were able to move forward in frank and constructive discussions to reach a mutually beneficial agreement as soon as possible,” Ryosei Akazawa told reporters Thursday.”We were able to advance concrete discussions on, for example, expanding trade between our two countries, non-tariff measures and economic and security co-operation.”Akazawa said he had “strongly proposed” to US Treasury Secretary Scott Bessent and other officials that Trump’s sweeping levies on trade partners be reviewed.The next round of ministerial-level talks will “take place intensively from mid-May onwards,” Akazawa said. Thursday’s talks followed an initial meeting in mid-April.Akazawa said any deal on tariff relief would be in the form of a package, which will be announced when finalized.”We have not yet reached the point where we can find areas of agreement,” Prime Minister Shigeru Ishiba told reporters.”However, I have been informed that the discussion was very positive and constructive.”- ‘Firmly defending’ interests – Trump has repeatedly called for a stronger yen to boost US exports, but foreign currency rates were not discussed Thursday, Akazawa said.The yen has risen significantly since Trump’s tariffs were announced, and was trading at 145 for a dollar, compared with 158 in mid-January.Japanese media had said the second round of talks could focus on automobiles and agricultural products, which Akazawa called “very important economic sectors.””We have no intention of negotiating in a way that would be detrimental to the national interest, so we have been firmly defending what needs to be defended and saying what needs to be said,” he said.Akazawa had told reporters at the airport on Wednesday that “Japanese companies are losing money each and every day” because of US tariffs. He said Thursday that he did not discuss China with the US officials, adding that Japan has a “very strong trade relationship with China too.””We will continue to monitor the developments in US-China relations, including the tariff measures against China, with great interest.”Separately, Finance Minister Katsunobu Kato said on a TV Tokyo program on Friday that Japan’s holdings of US Treasuries could be a bargaining chip in the negotiations.”It is natural to discuss everything that is a negotiation card… Whether we use them or not is another matter,” Kato said, according to TV Tokyo.”We don’t keep (the Treasury holdings) to support the US. We will intervene if our country is in trouble.”

Trump vs Toyota? Why US cars are a rare sight in Japan

With their sleek curves and chrome grilles, the classic American cars on sale at Yosuke Fukuda’s yard ooze Californian cool but on Japanese roads new US vehicles are a rare sight — much to President Donald Trump’s annoyance.Japan’s Toyota is the second-top-selling automaker in the United States, where it shifted more than 2.3 million vehicles last year.Meanwhile US industry leader General Motors sold just 587 Chevrolets and 449 Cadillacs in Japan, while Ford pulled out of the tough Japanese market nearly a decade ago.And it’s not just an aversion to foreign brands — in 2024 Mercedes-Benz sold more than 53,000 vehicles and BMW sold over 52,000 including Minis.”They don’t take our cars, but we take MILLIONS of theirs!” Trump said in April, accusing Japan of treating its ally “very poorly on trade”.To try and rev up the US auto industry, Trump has imposed a 25 percent levy on imported vehicles, in a major blow to Tokyo.Many people in Japan admire vintage US cars, but when it comes to new wheels, they hold more trust in domestic brands, Fukuda told AFP.West Coast hip-hop booms out at his shop Y-Tech, an incongruous slice of Americana amid the rice paddies north of Tokyo.”To be honest I think the problem is the size of the roads,” as well as an impression that US cars break down more often, which is likely unfounded, Fukuda said.At his garage, the 20 or so classic US models in varying states of restoration include a silver-green 1970 Chevrolet Nova and a 1954 Buick Roadmaster.But Fukuda also drives a modern SUV — a General Motors Yukon, which is two metres (6.5 feet) wide and “sticks out or is packed in” when parked in Tokyo’s narrow streets.Although some US cars are smaller, the brands remain a niche choice because “there are hardly any places that sell them or repair them”, he said.- ‘Bowling ball test’ -Yuka Fujimoto, a 42-year-old modelling agency manager, told AFP she had never considered buying a US car.”American cars don’t sell very well” in Japan, where domestic automakers offer “a wide range of line-ups including for families”, she said.However Trump believes Japan is keeping out American cars with “non-tariff cheating”.This includes “Protective Technical Standards (Japan’s bowling ball test)” he wrote last month on Truth Social.”They take a bowling ball from 20 feet up in the air and they drop it on the hood of the car. And if the hood dents, then the car doesn’t qualify,” Trump reportedly elaborated in 2018.A Japanese transport ministry official in charge of safety standards told AFP that no actual bowling balls are used.Trump “may be mixing it up with a test where a hemispherical human head model is hit on the hood”, the official said.But the car’s bonnet is in fact required to dent to absorb the impact, he explained.Tweaking Japan’s vehicle import procedures is a potential bargaining chip for Tokyo in tariff talks with Washington.The country could offer to widen access to a simplified screening process which currently applies to 5,000 vehicles per model annually, Japanese media reports said.- Fuel efficiency -Trump’s auto tariffs have already brought some changes, with Nissan last month revising plans to reduce US production.Meanwhile Honda is moving production of its hybrid Civic model from Japan to the United States, saying no “single issue” had prompted the decision.But US carmakers still face the problem of tepid demand among Japanese consumers.Hisashi Uchida, a 56-year-old construction firm employee, said his Toyota car “doesn’t have any special features, but it doesn’t break down”.”Many American cars can’t be parked at multi-storey parking lots, and their fuel efficiency isn’t good,” he said.Overall “I don’t think US carmakers are really putting importance on the Japanese market, which is significantly smaller than their home market”, said Masamitsu Misawa, chief editor of Japanese vehicle magazine Car Top.In contrast, German car brands offer a better range and their designs “better match Japanese people’s tastes”, he told AFP.Cars in Japan drive on the left, and unlike US rivals European automakers usually put the steering wheel on the correct side for vehicles sold there, he added.That could be changing. General Motors’ 8th-generation Chevrolet Corvette has right-hand drive in Japan for the first time.”I think that reflects efforts (for selling in Japan) by manufacturers and importers,” Misawa said.

Asian stocks gain after China teases US tariff talks

Asian markets largely rose Friday, tracking Wall Street gains, as China said it was considering a US offer to negotiate steep tariffs.US markets forged higher Thursday following strong results from tech giants Microsoft and Meta that helped offset lingering economic worries.Apple reported first-quarter profit above expectations but warned that US tariffs could cost the company and were disrupting its supply chain.And Amazon reported a nine percent rise in first-quarter revenue, but its outlook fell as potential impact from the US-China trade war rattled investors.Washington’s punishing levies reached 145 percent on many Chinese products in April, while Beijing has responded with fresh 125 percent duties on imports from the United States.On Friday, China’s commerce ministry said it was evaluating a US offer for negotiations on tariffs, but wanted Washington to show “sincerity” and be ready to scrap levies that have roiled global markets and supply chains.US President Donald Trump has repeatedly claimed that China has reached out for talks on the tariffs, and this week said he believed there was a “very good chance we’re going to make a deal”.Dozens of countries face a 90-day deadline expiring in July to strike an agreement with Washington and avoid higher, country-specific rates.Stephen Innes of SPI Asset Management said Beijing and Washington were now “waving detente flags” in their spiralling trade war.Beijing’s demand for sincerity was an apparent call to ditch the 145 percent rate, before holding serious talks, Innes said in a note Friday.”But dig a layer deeper, and the path is still littered with landmines,” he added.In Asia trading Friday, Hong Kong’s Hang Seng Index was up more than one percent in the morning, while Japan’s main Nikkei index gained about 0.6 percent.Japan’s envoy for US tariff talks said in Washington on Thursday that a second round of negotiations between the two countries had been “frank and constructive”.Japan, a key US ally and its biggest investor, is subject to the same 10 percent baseline tariffs imposed on most nations plus steeper levies on cars, steel and aluminium.The Bank of Japan warned earlier that tariffs were fuelling global economic uncertainty and revised down its growth forecasts while keeping its key interest rate steady.Traders are looking ahead Friday to US jobs data for April for indications of the US central bank’s path for interest rates.- Key figures at around 0220 GMT -Tokyo – Nikkei 225: UP 0.6 percent at 36,677.95Hong Kong – Hang Seng Index: UP 1.2 percent at 22,386.08Shanghai – Composite: closed for holidayEuro/dollar: UP at $1.1297 from $1.1289 on ThursdayPound/dollar: UP at $1.3295 from $1.3277Dollar/yen: DOWN at 145.43 yen from 145.44 yenEuro/pound: DOWN at 84.98 pence from 85.02 penceWest Texas Intermediate: UP 0.9 percent at $59.75 per barrelBrent North Sea Crude: UP 0.8 percent at $62.62 per barrelNew York – Dow: UP 0.2 percent at 40,752.96 (close)London – FTSE 100: FLAT at 8,496.80 (close)burs-sco/rsc

Apple expects $900 mn tariff hit, US iPhone supply shifts to India

Apple on Thursday reported first-quarter profit above expectations but warned that US tariffs could cost the company and were disrupting its supply chain.Apple expects US tariffs to cost $900 million in the current quarter, even though their impact was “limited” at the start of this year, chief executive Tim Cook said on an earnings call.Cook said he expected “a majority of iPhones sold in the US will have India as their country of origin,” adding that Apple’s products were exempt from Trump’s most severe reciprocal tariffs for now.”We are not able to precisely estimate the impact of tariffs, as we are uncertain of potential future actions prior to the end of the quarter,” Cook said. “Assuming the current global tariff rates, policies and applications do not change for the balance of the quarter and no new tariffs are added, we estimate the impact to add $900 million to our costs.”Tit-for-tat exchanges have seen hefty US levies imposed on China, with Beijing setting retaliatory barriers on US imports.High-end tech goods such as smartphones, semiconductors and computers received a temporary reprieve from US tariffs.Although completed smartphones are exempted from Trump’s tariffs for now, not all components that go into Apple devices are spared, said independent tech analyst Rob Enderle.”The more components are crossing borders, the most cost flows through to the device,” Enderle explained.”In the end, this all adds up to an expensive mess,” he said of the tariff situation.Canalys research manager Le Xuan Chiew said Apple built up inventory ahead of the tariffs going into effect.”With ongoing fluctuations in reciprocal tariff policies, Apple is likely to further shift US-bound production to India to reduce exposure to future risks,” he said.While iPhones produced in mainland China still account for the majority of US shipments, production in India ramped up toward the end of the quarter, according to Canalys.Cook said Vietnam would be the country of origin for almost all iPad, Mac, Apple Watch and AirPod products sold in the US.China will continue to be where most Apple products are made for sale outside the US, he insisted.”What we learned some time ago was that having everything in one location had too much risk with it and so we have, over time with certain parts of the supply chain, opened up new sources of supply,” Cook told analysts.”You could see that kind of thing continuing in the future.”- Sales slip in China -Apple’s revenue of $95.4 billion in the recently ended quarter was driven by iPhone sales, with the company reporting $24.8 billion profit for the quarter.”Apple saw strong growth in the Americas and Japan,” said CFRA Research equity analyst Angelo Zino, noting part of the reason could have been ramped up orders to get ahead of US tariffs.”China revenue declined 3 percent, but the hope was for growth as subsidies were put in place to help stimulate demand in the region.”Apple shares were down more than three percent in after-market trading.”The real story is in Tim Cook’s plans to navigate these unprecedented trade challenges,” said Emarketer analyst Jacob Bourne.Apple’s plan to shift manufacturing to India “raises pressing questions about execution timeline, capacity limitations, and potentially unavoidable cost increases that will shrink margins, be passed to consumers, or have a mix of consequences,” Bourne added.

US to end shipping loophole for Chinese goods Friday

The United States is set to end tariff exemptions on Friday for goods shipped from China worth less than $800, a move which could have significant ramifications on consumers’ purchasing habits. US President Donald Trump’s decision to ban the so-called “de minimis” exemption from May 2 could affect some 4 million shipments every day, according to the White House.The move announced last month means that goods shipped commercially will soon be subject to new tariffs of 145 percent — the current level of levies imposed on goods coming from China. Items sent through the US Postal Service will be hit with duties of 120 percent of their value, or a $100, which will increase to $200 next month. The measures mark the latest salvo in a burgeoning trade war between the United States and China — the world’s two largest economies.The White House has also slapped additional levies of 25 percent on several sectors including automobiles, steel and aluminum from China. Beijing retaliated with sweeping 125 percent levies on US imports. Most other US trading partners face a baseline tariff of 10 percent, except for Mexico and Canada which face a higher 25 percent tariff on goods not covered by a current North America free-trade deal. The effect of the de minimis change is likely to be significant, changing overnight the cost of small-ticket, Chinese-made items that Americans have come to rely on, from clothes to toys. The move threatens to hammer the business model of several large Chinese firms, including fast-fashion titans Shein and Temu. The Financial Times reported earlier this week that Shein was postponing a long-standing plan to list on public stock markets due to the looming de minimis changes.The company is exploring ways to restructure its business in the United States and is prioritizing finding “clarity” on tariffs over its initial public offering, according to the Financial Times. Trump first floated cancelling the exemption in February before backtracking after the move caused logistical disruptions. At the time, Beijing accused the United States of “politicizing trade and economic issues and using them as tools.”

US stocks rise on Meta, Microsoft ahead of key labor data

Global stocks mostly rose Thursday with Wall Street forging higher following strong results from tech giants Microsoft and Meta that helped offset lingering economic worries.Several markets were shut in Europe and Asia for the May 1 holiday, including those in France, Germany, Hong Kong and mainland China.Among markets that were open, London was flat, while Tokyo climbed more than one percent after Japan’s central bank kept its key interest rate steady and warned of trade uncertainty.Back on Wall Street, the tech-dominated Nasdaq led major US indices, winning 1.5 percent after AI strength boosted Microsoft results while robust ad spending lifted Facebook parent Meta.Tokyo’s main Nikkei 225 index closed 1.1 percent higher after the central bank’s decision to hold rates caused the yen to fall against the dollar, boosting Japanese exporters.The Bank of Japan warned that trade tariffs are fueling global economic uncertainty and revised down its growth forecasts for the world’s fourth-largest economy.Oil prices finished solidly higher, rebounding from an early retreat as US President Donald Trump vowed to enforce sanctions and called for a global boycott of Iranian oil or petrochemicals.US stocks have been on an upswing over the last week or so as Trump’s administration has touted progress on talks with trading partners over his wide-ranging tariffs.But investors remain anxious about the economic outlook amid concerns that Trump’s trade wars are delaying corporate investment and depressing consumer spending.On Thursday, the Institute for Supply Management (ISM) manufacturing index slipped to 48.7 percent in April, a touch below its level in March, and below the 50-point mark separating expansion from contraction.Businesses that responded to the survey flagged Trump’s trade policy rollout as a key cause for concern.Meanwhile, an updated analysis from S&P Global Ratings lowered the 2025 economic growth forecast for the United States, saying, “We see a material slowdown in growth, but do not foresee a US recession at this juncture.”Markets are looking ahead to Friday’s US jobs data for April for indications of the Federal Reserve’s path for interest rates.”All that matters for the Fed is the jobs market so we head into a big risk event with tomorrow’s payrolls report,” said Neil Wilson, UK investor strategist at Saxo Markets.- Key figures at around 2040 GMT -New York – Dow: UP 0.2 percent at 40,752.96 (close)New York – S&P 500: UP 0.6 percent at 5,604.14 (close)New York – Nasdaq: UP 1.5 percent at 17,710.74 (close)London – FTSE 100: FLAT at 8,496.80 (close)Paris – CAC 40: closed for holidayFrankfurt – DAX: closed for holidayTokyo – Nikkei 225: UP 1.1 percent at 36,241.70 (close)Hong Kong – Hang Seng Index: closed for holidayShanghai – Composite: closed for holidayEuro/dollar: DOWN at $1.1289 from $1.1328 on WednesdayPound/dollar: DOWN at $1.3277 from $1.3329Dollar/yen: UP at 145.44 yen from 143.07 yenEuro/pound: UP at 85.02 pence from 85.00 penceWest Texas Intermediate: UP 1.8 percent at $59.24 per barrelBrent North Sea Crude: UP 1.8 percent at $62.13 per barrelburs-jmb/sst

Oil prices drop, stocks diverge amid economic growth fears

Oil prices fell and stocks were mixed on Thursday in thin holiday trading, following weak US economic data that added to growth concerns. Several markets were shut in Europe and Asia for the May 1 holiday, including in France, Germany, Hong Kong and mainland China.Among markets that were open, London was flat, while Tokyo climbed over one percent after Japan’s central bank kept its key interest rate steady and warned of trade uncertainty.Oil plunged under $60 per barrel, weighed down by disappointing economic data from the US on Wednesday and on expectations that OPEC+ will increase production more than expected in June.Lower oil prices impacted energy giants BP and Shell, with their shares falling three percent and two percent respectively on London’s FTSE 100 index.”Oil prices are at lows not seen since the pandemic, as concerns about the trade hit to global growth keep swirling,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. “As economies are expected to slow, demand for energy is set to follow suit,” she added.Tokyo’s main Nikkei 225 index closed 1.1 percent higher after the central bank’s decision to hold rates caused the yen to fall against the dollar, boosting Japanese exporters.The Bank of Japan warned that trade tariffs are fuelling global economic uncertainty and revised down its growth forecasts for the world’s fourth-largest economy.US President Donald Trump has imposed hefty levies on trading partners and imports including steel, aluminium and autos to rectify what he says are unfair trade imbalances.Markets are looking ahead to Friday’s US jobs data for April for indications of the Federal Reserve’s path for interest rates.”All that matters for the Fed is the jobs market so we head into a big risk event with tomorrow’s payrolls report,” said Neil Wilson, UK investor strategist at Saxo Markets.Wall Street stocks opened sharply lower on Wednesday after US government data showed the economy shrank by an annual rate of 0.3 percent in the first quarter, amplifying recession worries.But they moved gradually higher through the day, rising after mid-morning data showed personal spending in March topped estimates.As more companies pull back from earnings forecasts in the face of the uncertainty regarding US tariffs, tech giants Meta and Microsoft reported quarterly profits that were above expectations on Wednesday.Shares in Meta — which owns Facebook, Instagram and WhatsApp — rose more than four percent in after-market trades.Investors are now awaiting earnings from US giants Amazon and Apple later in the day for further signals of the impact of tariffs on businesses.- Key figures at around 1100 GMT -London – FTSE 100: FLAT at 8,497.13 pointsParis – CAC 40: closed for holidayFrankfurt – DAX: closed for holidayTokyo – Nikkei 225: UP 1.1 percent at 36,241.70 (close)Hong Kong – Hang Seng Index: closed for holidayShanghai – Composite: closed for holidayNew York – Dow: UP 0.4 percent at 40,669.36 (close)Euro/dollar: DOWN at $1.1333 from $1.1342 on WednesdayPound/dollar: UP at $1.3338 from $1.3328Dollar/yen: UP at 144.29 yen from 143.18 yenEuro/pound: FLAT at 84.97 pence from 84.97 penceWest Texas Intermediate: DOWN 3.0 percent at $56.45 per barrelBrent North Sea Crude: DOWN 2.8 percent at $59.38 per barrelburs-ajb/yad

Tariffs prompt Bank of Japan to lower growth forecasts

The Bank of Japan revised down its growth forecasts and held interest rates steady on Thursday, warning that trade tariffs are fuelling global economic uncertainty.Kazuo Ueda, the central bank’s governor, said it was difficult to assess the impact of the sweeping levies imposed by US President Donald Trump and retaliatory measures by affected nations.”The level of uncertainty will be significant,” Ueda warned.”Even when the overall framework of the tariffs is decided, it will still be the implementation of tariffs of an unprecedented scale.” Trump’s hardball campaign to rectify what he says are unfair trade imbalances include tariffs on trading partners and imports including steel and automobiles.The BoJ said it now expects Japan’s gross domestic product (GDP) to rise 0.5 percent in fiscal 2025, which started in April — down from its previous estimate of 1.1 percent.In fiscal 2026 it expects GDP in the world’s fourth largest economy to expand 0.7 percent, down from 1.0 percent previously forecast.”Japan’s economic growth is likely to moderate as trade and other policies in each jurisdiction lead to a slowdown in overseas economies and to a decline in domestic corporate profits and other factors,” the bank said.However “factors such as accommodative financial conditions are expected to provide support” and “thereafter, Japan’s economic growth rate is likely to rise”.- Market fragility -The BoJ’s decision to stand pat on interest rates — holding them at around 0.5 percent — following a two-day policy meeting had been widely expected.Bank officials began lifting borrowing costs last year after nearly two decades of ultra-loose monetary policies aimed at kick-starting torpid economic growth in Japan.Its key rate is still much lower than the US Federal Reserve’s 4.25-4.5 percent and the Bank of England’s 4.5 percent.Masamichi Adachi and Go Kurihara of UBS said ahead of the BoJ policy meeting that “market fragility and uncertainty in the global economy due to the US tariff/trade policies” would lead the BOJ to hold rates.Analysts including Marcel Thieliant from Capital Economics said interest rate increases could still be on the table later this year.”We believe that the trade war won’t be as damaging as feared and we’re sticking to our forecast of another rate hike in July,” Thieliant said.Japanese tariff talks envoy Ryosei Akazawa will hold a second round of negotiations later Thursday in Washington, seeking to secure relief from the trade levies.”Fruitful negotiations between Washington and Tokyo to mitigate the impact of tariffs on exporters may help Japanese policy makers in hiking interest rates,” Katsutoshi Inadome at SuMi TRUST said.

Tokyo stocks rise as BoJ holds rates steady

Japanese stocks rose Thursday as the central bank kept its key interest rates steady as expected, in thin trade with most Asian markets shut for the May 1 holiday.Tokyo’s main Nikkei 225 index closed 1.1 percent higher after the bank’s decision caused the yen to fall against the dollar, boosting Japanese exporters.Several markets were shut in Asia for holidays on Thursday, including in Hong Kong and mainland China.Among open indexes, Sydney edged up 0.2 percent while New Zealand jumped two percent.The Bank of Japan warned that trade tariffs are fuelling global economic uncertainty and revised down its growth forecasts for the world’s fourth-largest economy.US President Donald Trump has imposed hefty levies on trading partners and imports including steel and automobiles to rectify what he says are unfair trade imbalances.”Heightened uncertainties regarding policies including tariffs are likely to have a large impact on business and household sentiment around the world and on the global financial and capital markets,” the BoJ said.Its policy decision sent the yen lower, with one dollar buying 144.41 yen compared to 143.13 yen Thursday morning.”On the back of the US rally on Wednesday and strong earnings results from Microsoft and other US companies, major AI-related stocks including Advantest were bought across the board,” IwaiCosmo Securities said.”In the afternoon, the yen weakened… following the downward revision of the Bank of Japan’s Outlook Report and other factors, which led to a broadening of the rally.”Markets are looking ahead to Friday’s US jobs data for April, which will be the first tangible reading of economic conditions after the Trump administration’s sweeping April 2 tariffs — many of which have been suspended. Wall Street stocks opened sharply lower on Wednesday after US government data showed the economy shrank by an annual rate of 0.3 percent in the first quarter, amplifying recession worries.But they moved gradually higher through the day, rising after mid-morning data showed personal spending in March topped estimates.As more companies pull back from earnings forecasts in the face of the uncertainty regarding US tariffs, tech giants Meta and Microsoft reported quarterly profits that were above expectations.Shares in Meta — which owns Facebook, Instagram and WhatsApp — rose more than four percent in after-market trades.”Strong earnings reports from US IT companies are expected to drive gains, led by the electronics sector,” strategist Takashi Ito of Nomura Securities told Bloomberg.- Key figures at around 0800 GMT -Tokyo – Nikkei 225: UP 1.1 percent at 36,241.70 (close)Hong Kong – Hang Seng Index: closed for holidayShanghai – Composite: closed for holidayEuro/dollar: DOWN at $1.1323 from $1.1342 on WednesdayPound/dollar: DOWN at $1.3314 from $1.3328Dollar/yen: UP at 144.32 yen from 143.18 yenEuro/pound: UP at at 85.01 pence from 84.97 penceWest Texas Intermediate: DOWN 1.2 percent at $57.50 per barrelBrent North Sea Crude: DOWN 1.02 percent at $60.44 per barrelNew York – Dow: UP 0.4 percent at 40,669.36 (close)London – FTSE 100: UP 0.4 percent at 8,494.85 (close)