Japan's First Red in 2026, China the "Trigger"?
Japanese stocks fell for the first time this year after a record-breaking rally, as investors took profits and the market worried about the impact of new export restrictions from China. The Topix index closed down 0.8% to 3,511.34, and the Nikkei 225 fell 1.1% to 51,961.98. The automotive sector was the target of selling, with Toyota falling 2.7% (its worst since November 18), followed by Honda, Suzuki, Subaru, and Mazda. Machinery and heavy industry stocks such as Hitachi, Kawasaki Heavy, and Mitsubishi Heavy also fell.
The trigger came after China imposed export controls to Japan on goods with potential military uses—which Chinese media reported could include rare earth items. Rare earths are essential for magnets and electric vehicle components, leading the market to fear that tighter restrictions could disrupt factory production. However, the details of the policy remain unclear, and some analysts believe the impact could be just a "temporary trigger" for profit-taking. Interestingly, rare earth stocks actually surged on expectations of higher rare earth prices—Toyo Engineering and Daiichi Kigenso surged more than 19%. Meanwhile, Nintendo plummeted 4.7% on concerns about console costs rising if AI storage demand pushes up memory chip prices.
Source: Newsmaker.id
