Expectations of Higher Rates In Japan Kept Tokyo Market Sentiment In Check

Akira Ito
13 Mar, 2025
Tokyo

Market sentiment in Tokyo dampened amid rapidly escalating trade tensions with the U.S., and the yen continued its advance. 

The Nikkei 225 Stock Average edged down a fraction, and the broader TOPIX advanced 0.1% as investors worried about the looming U.S. trade tariffs.

The yen closed at 147.5 against the U.S. dollar after Bank of Japan Governor Kazuo Ueda reaffirmed the central bank's plans to shrink its balance sheet. 

The central bank is prepared to raise rates following strong wage growth and rising consumption, permitting policymakers to end long-overdue ultra-loose monetary policy.

Japanese exporters are bracing for higher U.S. tariffs on electrical and electronic goods, vehicles, and semiconductor equipment as the Trump administration expands the list of countries and industries. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average closed down 0.1% to 36,790.03, and the broader TOPIX edged up 0.1% to 2,698.36, and both indexes erased the session's gains.

Mitsubishi Electric Corp. increased 1.3% to ¥2,757.0, and the company said it plans to expand its missile and cross-domain operations as Japan expands its arms production and defense capabilities. 

Semiconductor equipment makers were in focus in Tokyo's trading, following a rebound in advanced chipmaker stocks in New York in overnight trading. 

Tokyo Electron decreased 0.1% to ¥21,320.0, Disco Corp. soared 5.2% to ¥34,430.0, and Advantest Corp. jumped 3.7% to ¥7,830.0.

Japan Steel Works soared 6.2% to ¥5,933.0, despite the looming U.S. tariffs on Japanese exports. 

Kawasaki Heavy Industries gained 1.9% to ¥8,870.0, and IHI Corp. increased 2.9% to ¥10,605.0 amid expectations of rising orders from the defense ministry as the Japanese government plans to spend about 44 trillion yen on modernizing its military.