{"id":285140,"date":"2025-07-23T12:06:13","date_gmt":"2025-07-23T12:06:13","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/285140\/"},"modified":"2025-07-23T12:06:13","modified_gmt":"2025-07-23T12:06:13","slug":"markets-rally-after-trump-announces-tariff-deal-with-japan-stock-markets","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/285140\/","title":{"rendered":"Markets rally after Trump announces tariff deal with Japan | Stock markets"},"content":{"rendered":"

Financial markets around the world have rallied after Donald Trump<\/a> announced a trade deal with Japan to minimise the level of tariffs imposed on Japanese goods imported into the US.<\/p>\n

Share prices rose sharply in Tokyo, where the Nikkei index of leading Japanese companies increased by 3.5%. European markets followed, with the FTSE 100 gaining 0.5% to hit a record high<\/a>.<\/p>\n

US markets were expected to post further gains when opening later on Wednesday.<\/p>\n

Shares in Japanese carmakers rallied sharply. Shares in Toyota, the world\u2019s biggest carmaker, surged by more than 14% and there were gains for Honda, Mazda and Subaru. London-based companies with the highest exposures to US tariffs \u2013 including GSK, AstraZeneca<\/a> and Diageo<\/a> \u2013 were among the biggest risers on the FTSE 100.<\/p>\n

A line graph showing movement in the FTSE 100 since January 2025<\/a><\/p>\n

Russ Mould, investment director at the stockbroker AJ Bell, said: \u201cNews of a trade agreement between the US and Japan<\/a> is fostering optimism among investors that further deals might be reached before punishing tariffs come into force.\u201d<\/p>\n

Under the deal announced by the US president late on Tuesday<\/a>, Japanese imports to the US will incur a 15% tariff, compared with the 25% level Trump had threatened to impose from 1 August. The levy, paid by US importers, remains above the 10% \u201cbaseline\u201d global tariff thathad been imposed by Washington while the two countries negotiated.<\/p>\n

The Japanese car industry, which accounts for 8% of jobs in the country, had been left reeling by the threat of a 25% tariff on shipments to the US market. Vehicles and automotive parts account for more than a quarter of all Japanese exports to the US.<\/p>\n

Trump claimed that the deal would open the Japanese market to US products including cars, trucks, rice and certain agricultural products, many of which had proved to be a sticking point in negotiations.<\/p>\n

The deal with Japan followed an agreement with the UK in May<\/a>, as the first major country to reach a deal with the White House, which included limiting an increase in US tariffs on most British goods to 10%.<\/p>\n

Financial markets were thrown into a tailspin on 2 April by Trump\u2019s \u201cliberation day<\/a>\u201d tariff announcement, when he unveiled blanket levies of 10% and higher individual rates of up to 50%<\/a> on dozens of markets, including those of economic allies and rivals alike.<\/p>\n

Trump paused the higher tariff rates for 90 days to allow for negotiations with trading partners after a dramatic sell-off in the US bond market. The markets staged a recovery, as investors bet that Washington would ultimately back down from the toughest measures.<\/p>\n

Investors latched on the president\u2019s reluctance to see through extreme threats by betting that \u201cTrump always chickens out\u201d, or Taco for short, in a Wall Street maxim influencing trading decisions.<\/p>\n

Economists said the deal with Japan, which is the world\u2019s fourth-largest economy and is the US\u2019s fourth-largest import market, could be a prelude to further progress in negotiations with other big trading partners, including the EU.<\/p>\n

skip past newsletter promotion<\/a><\/p>\n

Sign up to Business Today<\/p>\n

Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n

Privacy Notice: <\/strong>Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n

Shares in EU carmakers rallied on Wednesday, with Volkswagen up by more than 5% as traders bet the US-Japan deal could be a blueprint for an agreement between Washington and Brussels. Trump has set a deadline of 1 August<\/a> for reaching a deal with the EU<\/a> and other trading partners.<\/p>\n

Washington also struck a deal with the Philippines on Tuesday, while the US Treasury secretary, Scott Bessent, has said talks would resume with China next week, ahead of the 12 August deadline Trump has set for a tariff agreement with the world\u2019s second-largest economy.<\/p>\n

However, investors warned that the tariff rates on US imports were higher under the deals than they were before Trump entered the White House \u2013 fuelling inflationary pressures for American households and rattling global supply chains.<\/p>\n

\u201cWhy are the markets jubilant this morning? Because even a higher tariff is preferable to continued uncertainty,\u201d said George Lagarias, chief economist at the financial services company Forvis Mazars.<\/p>\n

\u201cBut this is hardly a catalyst for long-term optimism. If the deal with Japan is the standard by which the negotiation with the EU will go, then investors and businesses should begin to price in a deterioration of the macroeconomic backdrop.\u201d<\/p>\n

The Japanese prime minister, Shigeru Ishiba, said the deal was \u201cprecisely the result of my consistent advocacy and strong lobbying of the US since I proposed \u2018investment over tariffs\u2019 to President Trump at our White House summit in February\u201d.<\/p>\n

Ishiba denied reports that he planned to announce his resignation after his coalition lost its upper house majority<\/a> this week.<\/p>\n","protected":false},"excerpt":{"rendered":"Financial markets around the world have rallied after Donald Trump announced a trade deal with Japan to minimise…\n","protected":false},"author":2,"featured_media":285141,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3091],"tags":[51,2441,16,15],"class_list":{"0":"post-285140","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-markets","10":"tag-uk","11":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114902465645571832","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/285140","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=285140"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/285140\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/285141"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=285140"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=285140"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=285140"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}