European, Japanese stocks surge after US-Japan trade deal

European shares climbed yesterday, buoyed by hopes of a trade agreement between the European Union and United States after Japan struck a deal that lowers tariffs on its autos, sending Japanese stocks to a one-year high.

- TOM WILSON STELLA QIU

President Donald Trump on Tuesday said a trade deal with Tokyo will include Japan paying a lower-than-threatened 15% tariff on shipments to the US. It followed an agreement with the Philippines that will see the US collect a 19% tariff rate on imports from there.

Trump also said EU representatives were coming for trade negotiations yesterday.

That stirred hopes for a deal with Europe, even as the EU was reportedly refining countermeasures in case of a deadlock before the Aug 1 deadline.

Euro Stoxx 600 jumped 1%, with auto shares surging 3.6%. UK shares hit a record high, climbing 0.5%.

The trade deal news has “raised hopes that the US might be about to reach deals with other countries that avoid the higher tariffs on Aug 1,” Deutsche Bank analysts wrote in a note.

On Wall Street, S&P 500 futures rose 0.2%, while Nasdaq futures added 0.1%.