Japanese Companies Face Billions In Additional Costs Because of Trump Tariffs

Akira Ito
15 May, 2025
Tokyo

Japan stock market indexes extended losses for the second consecutive day as enthusiasm surrounding the US-China trade deal faded. 

The Nikkei 225 Stock Average fell nearly 1%, and the Topix index declined 0.8% as investors remained cautious in the midst of earnings season. 

Tokyo market sentiment was weak, and Japanese trade negotiators hope to finalize an agreement with the U.S. before the June deadline. 

Investors are lowering earnings outlooks for Japanese exporters following announcements from several leading exporters. 

Sony Group said tariffs are expected to lower its earnings by $700 million, Subaru estimated a tariff hit of $2.5 billion, and a week ago Toyota estimated a 21% decline in profit in the current year. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average dropped 0.9% to 37,796.07, and the broader Topix index declined 0.8% to 2,740.58. 

Sony Group Corp. dropped 2.9% to ¥3,676.0 after the electronic product maker estimated a tariff-related hit of $700 million. 

Toyota Motor declined 3.4% to ¥2,656.50 amid worries that the company's profit could take a larger-than-announced hit in the current financial year. 

Last week, the automobile maker announced that its operating earnings are estimated to fall 21% in the current financial year ending in March, largely because of the U.S. tariffs. 

Last week the U.S. extended 25% tariffs on automobile imports to parts, and the company estimated that its operating earnings are expected to take a hit of $1.3 billion in April and May alone.  

Toyota sells about 2.3 million vehicles in the U.S., and about 500,000 units are imported directly from Japan. 

Despite the ongoing increases in tariff-related expenses, the automaker estimated its U.S. sales to expand by 237,000 in the current fiscal year.