European stocks climbed on Wednesday, boosted by hopes of further progress in trade talks after the US struck a deal with Japan.
The FTSE 100 index closed up 37.68 points, 0.4%, at 9,061.49, a record closing peak. It had earlier hit an all-time high of 9,080.09.
The FTSE 250 closed up 79.23 points, 0.4%, at 22,013.49 and the AIM All-Share closed up 3.85 points, 0.5%, at 773.99.
In European equities on Wednesday, the Cac 40 in Paris advanced 1.5%, while the Dax 40 in Frankfurt gained 0.8%.
In New York, the Dow Jones Industrial Average was up 0.4%, the S&P 500 traded 0.3% higher and the Nasdaq Composite firmed 0.2%.
Late on Tuesday, President Donald Trump said the US had agreed a “massive” trade deal with Japan that would include a 15% tariff on its exports.
He had previously threatened Japan, a major US trading partner, with a tariff of 25% beginning on August 1 if a deal was not reached.
“We just completed a massive Deal with Japan, perhaps the largest Deal ever made,” Mr Trump announced on social media.
Under the deal, “Japan will invest, at my direction, USD550 Billion Dollars into the US, which will receive 90% of the Profits”, he added.
Japanese Prime Minister Shigeru Ishiba was more circumspect, saying he needed to examine the deal before commenting.
“As for what to make of the outcome of the negotiations, I am not able to discuss it until after we carefully examine the details of the negotiations and the agreement,” he told reporters in Tokyo after Mr Trump’s announcement in Washington.
The deal comes after Mr Ishiba faced a bruising weekend election that left his coalition without a majority in the upper house.
“The trade agreement is undoubtedly good news for Japan,” said Kathleen Brooks at XTB. “The auto component is by far the biggest coup for Japan, as that makes up the bulk of exports to the US.
“By lowering the auto tariff rate to 15% – auto tariffs were a flat 25% rate before the exemption for Japan – it is giving hope that those countries who have yet to agree tariff rates with the US can seal good deals if they pledge investment into the US.”
The trade pact sent equities soaring in Asia with the Nikkei 225 closing up 3.5% on Wednesday and the Hang Seng in Hong Kong gaining 1.6%.
Car makers such as Toyota climbed 14%, and Honda jumped 11%. Mitsubishi rose a more modest 3.6%.
European car makers rose, with BMW, Mercedes-Benz Group and Volkswagen up 4.4%, 5.9% and 5.3% respectively, in Frankfurt. Renault was up 2.6% in Paris, and Citroen and Fiat owner Stellantis was up 8.9% in Milan.
