The Japanese financial market experienced a triple whammy with declines in stocks, bonds, and the yen on Tuesday, with concerns mounting over the outlook of the country's already fragile economy.
Affected by the comprehensive decline of the three major stock indices in New York overnight and growing investor concerns over the deteriorating China-Japan relations, the benchmark Nikkei stock index fell by more than 3 percent on Tuesday.
The 225-issue Nikkei Stock Average dropped 1,620.93 points, or 3.22 percent, from Monday to 48,702.98, while the broader Topix index decreased by 96.43 points, or 2.88 percent, to reach 3,251.1.
On the same day, treasury bonds were undersold, and the currency experienced depreciation with the yen weakening to 180 per euro for the first time.
Hiroshi Shiratori, a political science professor at Hosei University in Tokyo, said Prime Minister Sanae Takaichi's recent remarks on China's Taiwan have damaged Japan's relations with one of its most important trade partners.
"The declining stock prices reflect the market concerns over the deterioration of China-Japan relations. China is indispensable as it is Japan's largest trading partner. Yet, the Japanese prime minister's statements seemed to have completely ignored the important relations between the two countries," said Hiroshi Shiratori, a political science professor at Hosei University, in an interview with China Central Television on Monday.
Meanwhile, tourism-related stocks, such as Mitsukoshi Isetan, Takashimaya, Japan Airlines, All Nippon Airways, and Imperial Hotel, mostly continued to slide due to investor concerns about prolonged tensions between Japan and China.
According to the Kyodo News Agency, many hotels in Tokyo have received hotel cancellations from Chinese travelers and travel agencies following an advisory from China's Ministry of Culture and Tourism, which advised citizens to avoid traveling to Japan due to security concerns.
Japan hit by triple whammy with declines in stocks, bonds, yen
Japan hit by triple whammy with declines in stocks, bonds, yen
Japan hit by triple whammy with declines in stocks, bonds, yen
Mergers, acquisitions, and reorganizations in China's A-share market have picked up markedly since the start of the year, with deals disclosed in the first quarter up over 80 percent year on year, led by strong momentum in hard-tech sectors.
Data from Wind Information, a China financial data provider, showed that by Tuesday, listed companies had announced 829 merger, acquisition, and reorganization deals, with 224 on the ChiNext board and 94 on the STAR Market. By sector, "hard technology" sectors, represented by semi-conductor and smart manufacturing, have emerged as the most active areas.
"Hard-tech sectors typically feature rapid technological iteration, heavy research and development investment and long industrial chains, with significant economies of scale. Given these features, industrial mergers, acquisitions, and reorganizations have been a key tool for hard-tech companies to strengthen supply chain resilience and competitiveness. In addition, China's related policies, dubbed 'Six Measures for Mergers and Acquisitions,' explicitly support listed companies in carrying out mergers, acquisitions, and reorganizations around strategic emerging industries and future industries, while moderately increasing regulatory tolerance for unprofitable assets. This has created more favorable institutional conditions and a better market environment for listed companies in the hard-tech sectors to accelerate industrial upgrading and strengthen independent innovation," said Chen Jie, head of Mergers and Acquisitions Group at the investment banking division of China International Capital Corporation.
Chen also noted that the surge in mergers, acquisitions, and reorganizations has been reshaping valuation dynamics in the A-share market. As integration and synergies take time to materialize, investors are increasingly shifting their focus from short-term sentiment to long-term value based on business logic. At the same time, sustained mergers and acquisitions activity is expected to support the revaluation of leading companies.
"Through consolidation and expansion, leading A-share firms are likely to see their core competitiveness and long-term growth prospects become more evident. This will help the market better recognize their intrinsic value, offering higher valuation, and contribute to a more rational and mature valuation system overall," said Chen.
China's A-share sees mergers, acquisitions, reorganizations pick up,led by hard-tech sectors
