Japan Indexes Lacked Direction After US Launched Trade War with Major Partners

Akira Ito
05 Mar, 2025
Tokyo

Benchmark indexes in Japan lacked direction on Wednesday amid rising trade tensions with the U.S.

The Nikkei 225 stock average increased 0.3%, the broader TOPIX gained 0.25%, and the yen hovered at 149.69 against the U.S. dollar. 

Market sentiment in Tokyo was cautious amid worries of additional U.S. tariffs on Japanese exports.

The U.S. launched a trade war by placing a 25% tariff on shipments from Mexico and Canada and 20% on goods from China. 

The U.S. placed tariffs on three leading trade partners, and the White House threatened to place tariffs on shipments from Japan and the European Union. 

The elevated trade tension kept market sentiment in check, and stocks of automobile makers, semiconductor equipment makers, and industrial companies led the decliners for the third day in a row. 

The yen edged higher against the U.S. dollar amid rising speculation that the Bank of Japan will continue its rate-hike campaign and raise rates by at least 15 basis points at the end of the policy meeting later in the month. 

The Au Jibun Bank Japan Services PMI was revised higher to 53.7 in February, up from a flash estimate of 53.1 and 53.0 in January, according to data released by S&P Global on Wednesday. 

The service sector activities expanded for the fourth month in a row and rose to the highest level since August, driven by a surge in export orders. 

Business sentiment remained positive amid expansion plans, but the degree of optimism eased to a four-month low.

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average increased 0.3% to 37,444.11, and the broader TOPIX advanced 0.3% to 2,720.09. 

Yokogawa Electric rose 6.5% to ¥3,005.0, Furukawa Electric jumped 4.4% to ¥5,930.0, and Fujikura Ltd. soared 7.4% to ¥6,239.0.