The FTSE 100 rose to yet another all time high this morning as optimism surged through the stock market after Donald Trump revealed a “massive” trade deal with Japan.
Within minutes of the opening bell the City’s blue-chip index was up 32 points, or 0.35%, at a new record mark of 9,056. It follows an 3.5% rise in Japan’s main index the Nikkei 225.
Under the deal struck last night Japan will face a 15% US tariff and open its economy to US goods, including cars, trucks, rice and certain agricultural products. Japan also agreed to invest $550 billion in the US, Trump said on his Truth Social platform.
Japan was the United States fifth biggest trading partner making it by far the biggest permanent trade deal the Trump administration has reached so far.
Japan's Prime Minister Shigeru Ishiba said the 15% trade barrier was "the lowest figure to date among countries with trade surpluses with the US". Ishiba said the agreement would mean US tariffs on vehicles and parts would be cut from 25%.
Trump said at a White House event on Tuesday evening: "I just signed the largest trade deal in history, I think maybe the largest deal in history with Japan.
"They had their top people here, and we worked on it long and hard. And it's a great deal for everybody. I always say it has to be great for everybody. It's a great deal," he added.
American imports from Japan totalled $148 billion last year, of which about a third was in the form of cars, auto parts and other automotive products. Other major imports include consumer electronics, industrial machinery, pharmaceuticals, chemicals, seafood and tea.
Japanese goods currently face a 10% U.S. tariff, but it was set to rise to 25 percent on Aug. 1.
In an investment note Swiss bank UBS said: “The US's deal with Japan is better than market expectations, as the lower tariffs on autos could translate into a 0.4 percentage point improvement in Japan’s real GDP growth this year and again in 2026. The deal reduces risks to Japan’s economic growth, in our view, and removes downside risks for the Japanese currency.”
This article was written by Jonathan Prynn from The Evening Standard and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.