The Nikkei 225 Index on the Tokyo Stock Exchange briefly plummeted over 1,000 points on Tuesday morning after the opening bell, dropping below the 36,000 mark for the first time since September 2024. The sharp decline reflects mounting concerns over a potentially worsening economic outlook due to U.S. President Donald Trump's tariffs.
By the end of the morning session, the index had fallen by 1.74 percent. More than 90 percent of listed companies on the main board of the Tokyo Stock Exchange saw their share prices decline.
Notably, the share prices of semiconductor-related enterprises experienced significant drops, with some stocks falling by as much as 6 percent, indicating an increasing risk-averse sentiment among Japanese market investors.
During a Fox News interview aired on Sunday, President Donald Trump described the economic situation as a "period of transition" when asked about the potential for a recession. "What I have to do is build a strong country," Trump said. "You can't really watch the stock market."
These remarks, coupled with escalating trade tensions - highlighted by ongoing tariff negotiations between the United States, Mexico, and Canada - have rattled market participants.
On Monday, the Dow Jones Industrial Average fell 890.01 points, or 2.08 percent, to 41,911.71. The Standard and Poor's 500 dropped 155.64 points, or 2.70 percent, closing at 5,614.56, while the Nasdaq Composite Index tumbled 727.90 points, or 4.00 percent, to 17,468.33, its worst day since 2022.
Apart from the stock market volatility, concerns among market players regarding Trump's tariff policies have also contributed to the yen's recovery against the U.S. dollar. The yen touched a five-month peak of around 146.55 per dollar. The appreciation of the currency has had an adverse impact on the share prices of Japanese export-oriented enterprises, further exacerbating the decline of the Japanese stock market.
Meanwhile, Japanese Minister of Economy, Trade, and Industry Yoji Muto has met with U.S. officials in Washington to seek exemptions from President Donald Trump's planned tariffs on steel, automobiles, and other imports, but failed to secure assurances, Kyodo News reported on Tuesday.
Following talks with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick, Muto said that the officials acknowledged Japan's importance to the American economy, but did not offer guarantees regarding tariff exemptions.
Trump's 25-percent tariffs on steel and aluminum imports are set to take effect this week, with a similar levy on imported cars expected by April 2.
Japan exports about 1.37 million cars annually to the United States, making up 28.3 percent of its total exports to the American market, according to the report.
Muto said Japan will continue to try to protect companies from being hit by the proposed tariffs. "Based on the latest discussions, we will be in close consultation on how we can make the national interests of Japan and the United States a win-win situation," Kyodo cited him as saying.
Japan key stock index tumbles following Wall Street sell-off
