FTSE 100 hits all-time high as trade deal hopes lift global markets

Wednesday 23 July 2025 6:50 pm

The FTSE 100 closed at one other all-time excessive on Wednesday on hopes america’ commerce take care of Japan would spark a flurry of comparable pacts between the Trump administration and America’s largest buying and selling companions.

London’s blue-chip index closed up 0.5 per cent to hit a report excessive of 9080 factors, within the newest and clearest signal but of UK shares’ resurgence over 2025.

The Footsie is now up over 10 per cent this yr, and handed 9,000 factors for the primary time in its historical past final week. Analysts have attributed its stellar yr to a mix of traditionally low valuations luring value-hunting buyers and the index’s defensive constituents being beneficiaries of the geopolitical uncertainty that has plagued the worldwide financial system this yr.

Comparable rallies occurred on most main indexes, as risk-on sentiment swept throughout the monetary markets on the deal introduced by the US and Japan to minimise tariffs imposed on Japanese items coming into America.

Japan had been singled out by Donald Trump as overseeing one of the vital egregious commerce imbalances with america when the President introduced his so-called reciprocal tariff regime in April.

The US was initially planning to topic the Asian nation to tariffs of 24 per cent on all items it exported to America. However the deal introduced by Trump and Japanese Prime Minister Shigeru Ishiba introduced the cost all the way down to 14 per cent forward of the deadline set by Trump.

In return, Japan agreed to take a position $550bn (£407bn) straight into the US financial system, in an settlement Trump branded “the most important commerce deal in historical past”.

‘Good vibes’ on FTSE 100

The Japanese Nikkei rose sharply on the information, closing up over 3.5 per cent as fears the worst of Trump’s tariff regime had been abated by the deal. Carmakers have been the largest risers throughout the nation’s blue-chip index, with shares in Toyota leaping by greater than 14 per cent.

The index’s rally sparked related strikes on Europe’s largest bourses, because the Japan deal sparked hopes that European lawmakers would possibly strike an identical pact with the US. In addition to the FTSE 100’s positive aspects, Paris’s Cac 40 rose 1.4 per cent over the day, whereas the German Dax rose by 0.8 per cent.

Laith Khalaf, head of funding evaluation at AJ Bell stated the US-Japan deal introduced “some good vibes to markets”.

“The long run impact of tariffs stays to be seen however for the second, markets appear pleased to cheer the house runs and ignore the misses,” she stated.

The Monetary Occasions reported after European markets closed on Tuesday that the European Union was near agreeing an identical deal to Japan’s, which might see the bloc’s tariffs on exports to America introduced down to fifteen per cent.

However Deutsche Financial institution warned merchants would possibly nonetheless be underpricing the prospect of tariffs out of the blue ratcheting up throughout the worldwide financial system when Trump’s deadline for negotiations passes on 1 August.

Jim Reid, a market strategist on the German lender, stated the specter of greater commerce levies “stays for a number of massive economies” together with Brazil and Canada.

“There’s additionally the pledge of upper sectoral tariffs, together with 50 per cent on copper, so that is removed from the top simply but, and people tariffs would every have a big affect in the event that they did are available,” he stated.