Japan Indexes Deepen Losses Amid Twin Headwinds of U.S. Tariffs and Rising Yen

Akira Ito
25 Feb, 2025
Tokyo

Stock market indexes in Tokyo faced headwinds, and investors returned from a three-day holiday. 

The Nikkei 225 stock average declined more than 1%, the broader TOPIX fell 0.4%, and they traded at five-week lows amid the U.S. trade policy uncertainty and looming tariffs on Japanese exports. 

The newly elected U.S. presidential administration confirmed its plans to go ahead with imposing additional tariffs on imports from Mexico and Canada at the end of this month.

Trump announced additional restrictions on Chinese investments in technology, healthcare, and infrastructure sectors as the U.S. ramps up pressure on China. 

The U.S. presidential administration is likely to go ahead with its previously announced plans to impose tariffs on Japanese vehicles, pharmaceuticals, steel products, and advanced semiconductor equipment as early as next week. 

Over the last forty years, the U.S. has tried and failed to stem the rise of Japanese manufacturing sector and automobile companies, and exports continue to keep rising because of the quality of Japanese products and value proposition to customers.    

The Japanese yen continued to strengthen for the third consecutive week, as investors anticipate another modest rate hike at the end of the Bank of Japan's policy meeting in March. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average dropped 1.4% to 38,237.79, and the broader TOPIX declined 0.4% to 2,724.70. 

Trading conglomerates led gainers in Tokyo amid choppy trading after Warren Buffett-controlled Berkshire Hathaway increased its stake in Japanese trading houses.

Marubeni advanced 7.5% to ¥2,724.70, Mitsubishi Corp. jumped 8.8% to ¥2,589.0, and Itochu gained 6.7% to ¥6,551.0.

Semiconductor equipment makers declined, following the losses in New York in overnight trading ahead of Nvidia earnings later in the week.

Tokyo Electron declined 4.4% to ¥24,200.0, Advantest Corp. fell 6.5% to ¥9,000.0, and Disco Corp. decreased 6.7% to ¥42,780.0.