European shares climbed on Wednesday, buoyed by hopes of a trade agreement between the European Union and United States after Japan struck a deal that lowers tariffs on its autos, sending Japanese stocks to a one-year high.

Japan and Europe are two of the U.S.’s largest trading partners and now that the markets have some certainty around trade, it’s back to “risk-on” for investors, according to Jim Reid’s team at Deutsche Bank.

Japanese shares soared on Wednesday after President Donald Trump said he had struck a trade deal with Tokyo. The flagship Nikkei 225 index closed 3.5% higher, with car stocks including Toyota, Honda,