Easy Trading Tips – Japan’s Nikkei 225 plunged to its lowest level in eight months on Thursday after U.S. President Donald Trump unveiled a sweeping set of tariffs, including a steeper-than-expected 24% levy on Japanese imports.
The benchmark index plummeted as much as 4.6% in early trading, hitting 34,102.00—its weakest level since August 7. By the session’s close, the decline had eased, but the Nikkei still ended 2.8% lower at 34,735.93.
The broader Topix index also took a heavy hit, sliding 4.3% before trimming losses to finish 3.1% down.
“We anticipated tariffs around 10% to 20%, but the 24% figure caught markets off guard,” said Kazuo Kamitani, a senior equities strategist at Nomura Securities.
“This is the Trump tariff shock in full effect, and investors are clearly shifting to a risk-off stance,” he added.
Financials Lead Market Sell-Off
Banks were among the hardest-hit sectors on the Tokyo Stock Exchange, with financial stocks tumbling 7.2%. The sharp decline in bond yields stoked concerns over future earnings from lending and investments.
Resona Holdings bore the brunt of the downturn, plunging 8.7%, making it the worst-performing financial stock in the Nikkei.
Shipping companies also faced heavy losses, with an industry-wide decline of 6%. Nippon Yusen, Japan’s largest shipping firm, shed 5.6%, adding to concerns that escalating U.S. trade restrictions could stifle global trade flows.
Stronger Yen Adds Pressure on Exporters
A rally in the Japanese yen further weighed on the country’s export-heavy sectors, particularly automakers. The Tokyo bourse’s auto sub-index dropped 4.5%, while Toyota Motor (NYSE: TM) fell 5.2%.
In a small reprieve, Trump’s latest tariffs will not be applied on top of a separate 25% levy on Japanese automobile exports to the U.S., which is set to take effect later in the day.
Some Relief for Pharma Stocks
Despite the widespread sell-off, pharmaceutical stocks managed to post gains after the White House released a policy document exempting certain products, including pharmaceuticals and semiconductors, from reciprocal tariffs.
Although semiconductor giants like Tokyo Electron and Advantest initially dropped sharply, they later pared losses, closing down 3.7% and 4.5%, respectively.
Japan Urges U.S. to Reconsider
Following the tariff announcement, Japanese Prime Minister Shigeru Ishiba reiterated that Tokyo will push Washington to reconsider its trade policies.
“Some investors are hopeful for swift negotiations, but discussions could drag on, particularly with the U.S. targeting non-tariff barriers like Japan’s VAT system,” noted Norihiro Yamaguchi, an economist at Oxford Economics.
“Given the level of uncertainty, a quick rebound in equity markets seems unlikely,” he added.