Japan Indexes Struggled to Rise In Cautious Trading Amid Worries Related to Trade, Economy, and Rate Path

Akira Ito
21 Jan, 2025
Tokyo

Benchmark indexes in Tokyo lost early momentum after domestic economic growth and corporate earnings worries dominated market sentiment. 

The Nikkei 225 declined 0.3%, and the TOPIX edged down a fraction after an early rally in the market failed to broaden beyond tech stocks. 

Export-sensitive stocks led gainers after the newly appointed U.S. presidential administration delayed the promised implementation of additional and tougher tariffs to February. 

Despite the delay, Japanese corporations are bracing for a sharp escalation in U.S. trade barriers, and large automotive and electronics companies are ramping up supply chain diversification away from China to Vietnam, Mexico, India, and the ASEAN region. 

Moreover, market sentiment was muted ahead of the Bank of Japan's rate decision at the end of the policy meeting next week, and last week policy officials signaled the possibility of the increase in the reference rate to 0.5%, the highest since the 2008 global financial crisis. 

The yen weakened to 156.75 against the U.S. dollar, as currency traders estimated that the Bank of Japan will delay its first rate cut in 2025 after the ending of spring wage negotiations in March. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average decreased 0.3% to 39,027.98, and the broader TOPIX index declined 0.03% to 2,713.50. 

Tokyo Electron increased 1.4% to ¥27,035.0, Advantest Corp. gained 0.8% to ¥9,440.0, and Disco Corp., the precision tool maker for semiconductor production, jumped 5.8% to ¥9,440.0. 

Nintendo Co. Ltd. advanced 1.6% to ¥9,044.0, and the game console maker struggled to erase an 8% decline last week after the company delayed the release of the Switch 2 console. 

Metaplanet Inc. dropped 14.2% to ¥4,235.0 after the bitcoin-centric company soared 30% in the previous two trading days. 

Metaplanet has catapulted 24-fold in the last 52 weeks of trading after the company restructured its diverse operations and focused on bitcoin-related activities in Japan.