Market optimism grows on potential EU-U.S. agreement following Tokyo breakthrough

LONDON/SYDNEY, July 23 — European stocks rose sharply on Wednesday amid renewed optimism for a potential trade deal between the European Union and the United States. The rally was fueled by Japan’s newly struck agreement with Washington, which lowers auto tariffs and sent Japanese equities to a one-year high.

U.S. President Donald Trump announced that Japan will face a reduced 15% tariff on vehicle exports to the U.S., avoiding more severe levies previously floated. The agreement comes alongside a separate deal with the Philippines, which imposes a 19% tariff on imports, further shaping the global trade landscape.