Japan's Business Activities Index Rebounded in April, Yen Hovered Near 6-Month High

Akira Ito
23 Apr, 2025
Tokyo

Stock market indexes in Tokyo headed higher following overnight gains on Wall Street and supported by the rebound in private sector activities. 

The Nikkei 225 Stock Average rose as much as 2.2%, and the broader TOPIX index advanced as much as 2.3% amid hopes of easing trade tensions between the U.S. and China. 

U.S. Treasury Secretary Scott Bessent told investors in a closed-door meeting that the current high level of trade tensions with China is "unsustainable on both sides," and the two trading partners would have to find a common ground. 

Bessent's comments raised hopes that the Trump administration's punitive tariffs of 145% could be substantially cut as early as this month. 

The unilateral tariffs imposed by the Trump administration have stoked fears of high inflation and a sharp slowdown in the U.S. economy. 

Moreover, as many as one million jobs in U.S. small businesses and an additional three million jobs in China are likely to be lost over the rest of the year if the cumulative U.S. tariffs are imposed starting in May. 

Despite the change in U.S. rhetoric, trade negotiations between Japan and the U.S. ended with no clear plan amid a lack of priorities and a changing demand list. 

Japanese vehicle makers are still bracing for 25% U.S. tariffs, and additional tariffs may be imposed on shipments from Mexico. 

The Japanese yen traded at 142.09 against the U.S. dollar as investors sought safety in the currency amid elevated global trade uncertainty and growing skepticism about U.S. dollar-denominated assets.  

On the economic front, Japan's private sector activities returned to growth in April from the slump in March. 

The au Jibun Bank Japan Manufacturing PMI advanced to 48.5 from 48.4 in March, confirming the contraction for the tenth consecutive month, according to data released by S&P Global. 

Factories saw new orders decline at the steepest rate in over a year amid a stronger deterioration in foreign demand, as well as reports of subdued client spending and concerns over tariffs. 

In contrast, services companies reported the strongest rise in new work since January. 

The au Jibun Bank Japan Services PMI index improved to 52.2 in April from 50.0 in March, signaling modest recovery in the service sector activities. 

The composite output index increased to 51.1 from 48.9 in March, supported by a rebound in the services activity. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average rose 1.8% to 34,835.58, and the broader TOPIX index advanced 1.7% to 2,577.17. 

Toyota Motor Company rose 4.8% to ¥2,578.50, Honda Motor Company increased 2% to ¥1,413.0, and Nissan Motor Company advanced 4.2% to ¥327.40.

Ocean shipping companies were in focus, and ports in Los Angeles and Long Beach, California, reported rising cancelation of container ship arrivals from China and Asia. 

At least container ship arrivals have been canceled so far in May, and the number of cancelations is expected to surge in the coming weeks as the Trump administration's import tax is scheduled to become effective on May 2. 

Nippon Yusen rose 2.3% to ¥4,580.0, Mitsui O.S.K. Lines Ltd. advanced 1.8% to ¥4,996.0, and Kawasaki Kisen Kaisha Ltd. was up 1.3% to ¥1,863.0.