Japan Markets Plunged Into Bear Zone After Monday's 7% Rout

Akira Ito
07 Apr, 2025
Tokyo

Stock market indexes in Japan plunged as the global market sell-off intensified after the Trump administration's trade war fueled global recession worries. 

The Nikkei 225 Stock Average and the TOPIX index dropped 7.8% and extended 2025 losses to 20% and 17%, respectively. 

Japanese markets approached bear market territory amid growing worries of a sharp decline in international trade, negatively impacting corporate earnings in Japan. 

About 40% of listed companies on the Tokyo Stock Exchange rely on global exports, including significant shipments to the U.S. 

Last week's brutal selling is likely to continue this week, after defiant Trump reiterated his commitment to import taxes.

In addition, more tariffs are expected to be announced this Wednesday, followed by the release of sectoral tariffs in the first week of May. 

The market selloff intensified in the second week as investors digested the implications of high tariffs and braced for additional tariffs targeting countries and industries over the next five weeks. 

Asian markets extended the previous week's rout, and benchmark indexes in China dropped a whopping 8%, in Hong Kong plunged 13%, in Korea and Australia fell 6%, and in India declined 4%. 

European markets in early Monday traded down between 5% and 7%, and the S&P 500 futures showed a decline of 4% at the opening in New York. 

World markets are likely to extend losses after the Trump administration showed no sign of backing down, and China announced its retaliatory tariff of 34% on U.S. goods starting on April 10. 

Global stock market sentiment is deteriorating rapidly, and investors are seeking safety in bonds and Japanese and eurozone currencies. 

The yen edged up to 145.75 against the U.S. dollar, and the yield on 10-year Japanese government bonds decreased to 1.11% as investors sought safety. 

Crude oil dropped 4% to $59.70 a barrel, the level last seen in early 2021, and gold declined for the third consecutive session amid growing worries of a global recession and a sharp decline in corporate earnings.

The baseline import tax of 10%, also known as a universal tariff, went into effect on Sunday, sparking resistance from foreign suppliers and American customers and investors.

While publicly the Trump administration has put up a brave face, privately the U.S. administration has encouraged bilateral negotiations with key trading partners. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average plunged 7.8% to 31,136.58, and the broader TOPIX index decreased 7.9% to 31,136.58.

Tokyo Electron decreased 10% to ¥17,060.00, Advantest Corp. fell 11% to ¥5,034.00, and Disco Corp. dropped 14.6% to ¥23,600.00.

Marubeni Corp. decreased 10.7% to ¥1,958.00, Itochu Corp. declined 7% to ¥6,039.00, Sumitomo Corp. dropped 9.5% to ¥2,865.50, and Mitsui & Company fell 6.8% to ¥2,470.00.

Inpex Corp. plunged 9.6% to ¥1,699.00, and Fuji Oil Holdings dropped 7.4% to ¥2,835.00.