U.S. President Donald Trump announced that Japan and the United States have reached a historic trade deal, setting a "reciprocal" tariff rate of 15%. The deal, which promises to create “hundreds of thousands of jobs,” was hailed as a breakthrough in U.S.-Japan relations, especially in the automotive and agricultural sectors.

Trump emphasized that the agreement would open Japan’s markets to U.S. cars, trucks, rice, and other agricultural products, while Japan would impose a reciprocal 15% tariff on U.S. goods. “This deal is perhaps the largest ever made,” Trump said on Truth Social. He also indicated that the deal could be a game-changer for both economies, adding that it would promote high-quality manufacturing and job creation in both countries.

The tariff deal, which comes just ahead of an Aug. 1 deadline set by Trump, effectively avoids a potential rise in Japan’s tariff rate from 10% to 25%. The possibility of a further increase to 35%. Japan's Prime Minister Shigeru Ishiba welcomed the deal, stating it would help promote stronger U.S.-Japan collaboration on the global stage.

This breakthrough follows a series of tense negotiations, including Japan’s chief tariff negotiator Ryosei Akazawa meeting with U.S. officials for the eighth round of talks. The deal was announced after a series of political setbacks, including Japan’s ruling coalition losing its majority in the Upper House election and Trump’s earlier threats to raise tariffs significantly.

Following the news, Japan’s Nikkei 225 stock index saw a 2% rise, and the yen strengthened, reflecting the optimism surrounding the deal.