Tokyo, Jul 23 (AP) Global shares rallied on Wednesday, with Tokyo's benchmark Nikkei 225 index gaining 3.5 per cent after Japan and the US announced a deal on President Donald Trump's tariffs.

France's CAC 40 added 1.4 per cent in early trading to 7,854.75, while Germany's DAX gained 0.9 per cent to 24,260.62. Britain's FTSE 100 rose 0.6 per cent to 9,075.46. The future for the S&P 500 gained 0.4 per cent while that for the Dow Jones Industrial Average was up 0.5 per cent.

The tariff agreement as announced calls for a 15 per cent US import duty on goods from Japan, apart from certain products such as steel and aluminum that are subject to much higher tariffs. That's down from the 25 per cent Trump had said would kick in on August 1 if a deal was not reached.

“This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it,” Trump posted on Truth Social, noting that Japan was also investing “at my direction” USD 550 billion into the US. He said Japan would “open” its economy to American autos and rice.

Japan's benchmark Nikkei 225 surged as much as 3.7 per cent, closing at 41,171.32.

Hong Kong's Hang Seng jumped 1.6 per cent to 25,538.07, while the Shanghai Composite index was little changed, gaining less than 0.1 per cent to 3,582.30.

Australia's S&P/ASX 200 edged up 0.7 per cent to 8,737.20 and the Kospi in South Korea edged 0.4 per cent higher to 3,183.77.

“President Trump has signed two trade deals this week with the Philippines and Japan which is likely to keep market sentiment propped up despite deals with the likes of the EU and South Korea remaining elusive, for now at least,” Tim Waterer, chief market analyst at Kohle Capital Markets, said in a report.

There was a chorus of no comments from the Japanese automakers, despite the latest announcement, including Toyota Motor Corp, Honda Motor Co and Nissan Motor Corp.

Japanese companies tend to be cautious about their public reactions, and some business officials have privately remarked in off-record comments that they hesitate to say anything because Trump keeps changing his mind.

The Japan Automobile Manufacturers' Association also said it had no comment, noting there was no official statement yet. Japan's Prime Minister Shigeru Ishiba welcomed the agreement as beneficial to both sides.

Toyota stock jumped 14 per cent in Tokyo trading, while Honda was up more than 11 per cent and Nissan added 8 per cent. In other sectors, Nippon Steel, which is acquiring US Steel, rose 2.7 per cent while video game maker and significant exporter Nintendo Co added 0.7 per cent. Sony Group surged 4.3 per cent.

But Takeshi Niinami, chairman of the Japan Association of Corporate Executives, which groups about 1,600 top executives, issued a note of caution about the nation having to be resilient and pushing free trade, while welcoming the tariff deal.

“I hope this US-Japan tariff deal can work as a starting point to further strengthen US-Japan relations,” he said.

He noted the US policy of putting America first was unlikely to change, and that meant Japan, too, must make policy adjustments, such as making an aggressive push in artificial intelligence.

Trump has also said that he reached a trade agreement with the Philippines following a meeting Tuesday at the White House, that will see the US slightly drop its tariff rate for the Philippines without paying import taxes for what it sells there.

On Tuesday, the S&P 500 added 0.1 per cent to Monday's all-time high. The Dow Jones Industrial Average rose 0.4 per cent, while the Nasdaq slipped 0.4 per cent.

Also early Wednesday, US benchmark crude oil lost 23 cents to USD 65.08 a barrel. Brent crude, the international standard fell 21 cents to USD 68.38 a barrel.

The US dollar fell to 146.38 Japanese Yen from 146.64 Yen. The Euro cost USD 1.1736, down from USD 1.1754. (AP) SKS NPK NPK

Tariff agreement between US and Japan reduces import duty, easing trade tensions and prompting market rallies. A bilateral trade arrangement sets a general US import duty on Japanese goods at 15 percent while preserving higher tariffs for specified products such as steel and aluminum; it includes market-access commitments for selected US exports, notably autos and rice, and an announced Japanese investment pledge into the United States, producing sector-differentiated compliance implications and cautious responses from major Japanese automakers and industry groups.