Tokyo Indexes Extend 2-Day Rebound as Investors Shift Focus to Defense Stocks

Akira Ito
24 Apr, 2025
Tokyo

Technology and financial stocks led market indexes higher for the second consecutive session, tracking Wall Street gains in overnight trading. 

The Nikkei 225 Stock Average gained as much as 0.8%, and the broader TOPIX index advanced 0.4%. 

Market sentiment has wavered amid constantly changing U.S. trade policy, and the export-heavy Japan's economy is heavily dependent on its shipments to the U.S. 

About 40% of the listed companies in the first section of the Tokyo Stock Exchange are dependent on exports to the U.S. 

Japan's policymakers are increasingly factoring in the possibilities of 25% tariffs on exports to the U.S., as the U.S. shows little interest in setting negotiating priorities and deadlines. 

In addition, the U.S. policymakers are looking to combine security and defense cooperation with the trade negotiations and demanding Japan step up its defense spending and share a larger burden of maintaining U.S. military bases. 

The Japanese yen traded at 142.77 against the U.S. dollar as investors sold U.S. dollar-denominated assets amid waning confidence in its safe haven status. 

The Bank of Japan is widely anticipated to hold its short-term rates at 0.5% at the end of its policy meeting next week. 

The central bank is likely to lower its economic growth outlook in the current fiscal year amid ongoing global trade tensions and slowing economic growth outlook in the U.S. and China, two key export markets for Japan's goods. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average increased 0.5% to 35,048.46, and the broader TOPIX index advanced 0.4% to 2,594.57. 

Vehicle makers led the gainers in Tokyo trading, despite investors dialing down expectations of a trade deal between the U.S. and Japan in the near term. 

Toyota Motor Corp. advanced 3.2% to ¥2,664.0, Honda Motor Co. Ltd. gained 0.9% to ¥1,431.50, and Nissan Motor Co. Ltd. increased 0.4% to ¥335.10. 

Tech stocks rebounded for the second consecutive session following a rally in semiconductor stocks on Wall Street in overnight trading. 

Tokyo Electron jumped 3.5% to ¥20,340.0, Advantest Corp. gained 3.2% to ¥5,723.0, and Disco Corp. added 1.3% to ¥27,310.0. 

Industrial companies with a focus on defense equipment extended this year's gains amid expectations of rising government spending. 

IHI Corp. jumped 0.7% to ¥10,670.0, Kawasaki Heavy Industries added 0.7% to ¥8,028.0, and Mitsubishi Heavy Industries advanced 1.7% to ¥2,687.0.