President Donald Trump says the US has agreed to a "massive" trade deal with Japan, one of the country's largest trading partners.

Japan has agreed to invest $550bn (£407bn) in the US while its goods sold to America would be taxed at 15% when they reach the country - below the 25% tariff Trump had threatened.

Trump said on social media that Japan would open its economy to US goods, including cars, trucks, rice and certain agricultural products.

Japan's Prime Minister Shigeru Ishiba welcomed the announcement, saying it was "the lowest figure to date among countries with trade surpluses with the US".

"I just signed the largest trade deal in history, I think maybe the largest deal in history with Japan," Trump touted at a White House event on Tuesday evening.

"They had their top people here, and we worked on it long and hard. And it's a great deal for everybody. I always say it has to be great for everybody. It's a great deal," he added.

Ishiba said on Wednesday the agreement would mean US tariffs on vehicles and parts would be cut to 15% from 25%.

However, the tax is above the 10% Trump levied on Japan and other countries when he suspended higher so-called reciprocal tariffs between April and July.

A quarter of Japan's US exports are from its critical automotive sector, which accounts for almost 3% of its economy.

In 2019, the value of its automotive shipments was $410bn (£300bn), according to the US International Trade Administration.

Ishiba said: "We were the first in the world to reduce tariffs on cars and auto parts without any quantity restrictions."

UK cars sent to the US are taxed at a lower 10% rate when they reach American shores but this is limited to 100,000 vehicle quota.

Ishiba added: "The agreement does not include any reduction of tariffs on the Japanese side."

US car-makers, however, were not not happy with the deal which cuts tariffs on imports from Japan while leaving taxes on imports from their plants and suppliers in Canada and Mexico at 25%.

Matt Blunt, president of the American Automotive Policy Council, a group which represents Ford, General Motors and Stellantis, called the Japan agreement "a bad deal".

The BBC has contacted the White House and Japan's embassy in Washington for more details of the trade agreement.

The US also announced trade agreements with the Philippines. US imports from the Philippines will be taxed at 19% when they reach America.

Bringing its main tariff rate down to 15% is Japan's "best compromise at this stage", Shigeto Nagai from research firm Oxford Economics told BBC News.

The planned investment in the US by Japan included in the announcement "will be a huge boost to restore the US, fitting in with Trump's story of reviving US manufacturing with more jobs," he added.

In a letter sent to Japan this month, Trump threatened a 25% tariff on the country's exports to the US if there wasn't a new trade deal struck before 1 August, just above the rate he announced during his so-called Liberation Day on 2 April.

The April tariffs plan, which included duties on many US trading partners across the globe, were paused for 90 days following worldwide market turmoil. It allowed Tokyo's trade representatives time to negotiate with their counterparts in Washington.

Japan is the world's fourth largest economy behind the US, China and Germany, and ahead of India, the UK and France, according to the World Bank.

Japan's benchmark share index, the Nikkei 225, rose by 3.5% on Wednesday, with strong gains for shares in motor industry giants - including Toyota, Nissan and Honda.

The apparent deal comes as Ishiba is under pressure to step down after his Liberal Democratic Party (LDP) lost its majority in the country's upper house in elections over the weekend.

The LDP had already lost its majority in Japan's more powerful lower house last year.