Easy Trading tips – Japan’s Nikkei 225 index suffered a major setback on Monday, tumbling to levels not seen in a year and a half. The sharp downturn was led by a severe sell-off in financial stocks, with the banking sector plummeting more than 17% during the day as fears of a global recession triggered by trade tariffs shook investor confidence.
The benchmark Nikkei fell as much as 8.8% during intraday trading, reaching 30,792.74 — its lowest point since October 2023 — before paring losses slightly to close down 7.8% at 31,136.58. Every single stock within the 225-member index ended the session in negative territory.
The broader Topix index mirrored the weakness, plunging up to 9.6% and settling 7.8% lower by the closing bell.
Speaking aboard Air Force One on Sunday, U.S. President Donald Trump defended his administration’s sweeping new tariffs, describing them as “medicine” and expressing no concern over the resulting market turmoil.
Since the announcement of the unexpectedly aggressive tariffs last week, the Nikkei has fallen 11.6%, while the U.S. S&P 500 has lost 10.6%.
“With so much uncertainty surrounding trade policies and global responses, it’s tough to gauge how far this correction could go,” said Maki Sawada, equity strategist at Nomura Securities. “Markets remain under pressure as long as policy clarity is lacking.”
However, Sawada also noted that pessimism may be overdone: “Right now, the market seems to be pricing in only negative outcomes. Any indication of easing in trade tensions or stimulus efforts could trigger a rebound.”
The Topix banking index dropped as much as 17.3% during the session before trimming losses to close 10% lower.
Financial stocks have taken the hardest hit amid the broader equity downturn, shedding roughly 25% of their value over the past three trading days. Investors are reacting to shrinking bond yields and waning expectations for further interest rate increases by the Bank of Japan — factors that directly impact bank profitability.
“This is a broad risk-off move targeting sectors that have previously generated strong returns, with banks being hit hardest,” said Rikki Malik, portfolio manager at Springboard Capital. “Still, we may be approaching a point of capitulation and could see a technical bounce soon.”
Among the day’s biggest losers, Nomura Holdings sank 13.2%, marking the steepest drop among major banks. Mizuho Financial Group fell 10.7%, while Mitsubishi UFJ Financial Group was down 10.4%.
The tech sector also came under heavy selling pressure. Chipmaker Renesas tumbled 16.7%, silicon wafer producer Sumco slid 15.8%, and Advantest — a leading chip-testing equipment maker — declined 11%.