Tokyo stocks gained on Wednesday after Japan and the United States finally agreed on a trade deal to slash Donald Trump's tariffs, including those on the crucial car sector.

Investors were also cheered by news that Washington had reached agreements with Indonesia and the Philippines, strengthening optimism that other countries will achieve deals to avoid the worst of the US president's levies.

Despite a lack of deals being made leading up to Trump's self-imposed August 1 cut-off date, equity markets have been on the march in recent weeks on optimism that governments will eventually get over the line.

Japan had been one of those yet to sign, despite a string of trips to Washington by trade envoy Ryosei Akazawa, dampening investor sentiment in Tokyo.

But Trump on Tuesday said that officials had agreed to a "massive" deal that would include a 15 percent tariff on imports from Japan, down from the previously threatened 25 percent.

Tokyo also managed to cut a deal to reduce tolls on its autos -- a sector that accounts for eight percent of Japanese jobs -- to 15 percent, compared with 25 percent for other countries.

"We just completed a massive Deal with Japan, perhaps the largest Deal ever made," Trump announced on his Truth Social platform.

"Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits."

He did not provide further details on the investment plan, but claimed the deal "will create Hundreds of Thousands of Jobs."

With the deal on car shipments in the bag, Japanese Prime Minister Shigeru Ishiba said: "We are the first (country) in the world to reduce tariffs on automobiles and auto parts, with no limits on volume."

He later said the 50 percent levies on steel and aluminum were not part of the deal.

The yen strengthened to 146.20 per dollar -- compared with close to 148 Tuesday but it lost some weight after a top Bank of Japan official indicated it was not in any rush to hike interest rates.