Japan's Indexes Extend Weekly Gains, Yen Remains In Favor Amid Waning Confidence in U.S. Dollar Assets

Akira Ito
18 Apr, 2025
Tokyo

Japan's benchmark index advanced and extended gains from the previous session amid hopes that talks between the US and Japan will lower the proposed tariffs. 

The Nikkei 225 Stock Average edged up 0.6%, and the broader TOPIX gained 0.8%, as investors prepared for the start of the earnings season next week. 

For the week, the Nikkei 225 Stock Average advanced 1%, and the broader TOPIX gained 1.5%, tracking gains on Wall Street. 

Tokyo stocks have gyrated, tracking gains on Wall Street amid elevated levels of uncertainty surrounding U.S. trade policy and incoherent and chaotic attempts to reorient global supply chains. 

The high levels of the proposed U.S. tariffs, which are import taxes, are now considered a negotiating tool for the Trump administration to extract more concessions from foreign governments and ramp up lobbying contributions from domestic retailers and importers. 

Donald J. Trump promoted the tariffs as a way to bring back more manufacturing to domestic shores, but total revenues generated from import taxes are going to pay for tax benefits to the wealthy and to expand the manufacturing sector. 

 

Japan's Consumer Price Inflation Eased In March 

On the economic front, consumer price inflation in March eased to 3.6% from 3.7% in the previous month, the Ministry of Internal Affairs and Communications said on Friday. 

Food price inflation slowed to 7.4% from 7.6%, electricity inflation eased to 8.7% from 9.0%, and natural gas inflation slowed to 2.4% from 3.4% a year ago, respectively. 

Core inflation, which excludes fresh food, accelerated to 3.2% from 3.0%, and core-core inflation, excluding fresh food and energy, accelerated to 2.9% from 2.6%. 

The yen traded at 142.32 against the U.S. dollar as traders awaited the outcome of negotiations between Japan and the U.S. amid rising speculation that the Bank of Japan and insurance companies are likely to trim their holdings of U.S. Treasury notes and bonds. 

Japan is the largest foreign holder of the U.S. public debt, totaling $1.1 trillion, according to the latest data available from the U.S. Department of the Treasury. 

Financial markets in New York, India, Europe, and Hong Kong are closed for public holiday on Friday, and European markets are set to resume trading on Tuesday. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average increased 0.6% to 34,583.29, and the broader TOPIX index added 0.8% to 2,550.34. 

Sumitomo Mitsui Financial Group added 0.8% to ¥3,235.0, Mitsubishi UFJ Financial gained 0.7% to ¥1,692.0, and Mizuho Financial Group advanced 2.1% to ¥3,482.0. 

Toyota Motor gained 1.4% to ¥2,533.50, Honda Motor added 0.7% to ¥1,391.50, and Nissan Motor increased 1.3% to ¥319.85.