Trade Winds: The US-Japan Deal Propels Global Markets

Japanese shares soared following a trade deal with the US, lowering tariffs on autos. This buoyed global markets, including EU stock futures. The agreement with Japan and progress with Europe improved economic outlooks amid political shifts and extended trade negotiations with China.

On Wednesday, Japanese shares reached a one-year peak after the country secured a trade agreement with the United States, reducing auto tariffs. This move sparked renewed optimism for a potential EU-US deal, pushing European stock futures higher.

President Trump announced the trade deal on Tuesday, which ensures Japan will face a lower auto tariff rate of 15%, avoiding a proposed hike to 25%. Additionally, the US reached a new tariff agreement with the Philippines, setting a 19% rate on imports.

Japanese automakers like Mazda and Toyota saw significant stock gains. Analysts indicated the deal lessens risks for Japan's economy, allowing for potential interest rate hikes. Meanwhile, US corporate earnings signaled effects of Trump's trade policies, as seen in General Motors' reported losses.

(With inputs from agencies.)