Japanese Stocks Gain as Market Eyes Trump Tariff Plan
Japanese stocks gained slightly on Tuesday, finding some stability after their wild swings following comments by U.S. President Donald Trump that he would impose tariffs on goods from Canada and Mexico next month.
While Trump’s pledge disappointed those who had bet there would be no immediate tariffs after a Wall Street Journal report, it was still better than investors’ worst fears of universal levies that would directly threaten $150 billion of Japanese exports to the United States.
The Topix index rose 0.1 percent to 2,713.50 after erasing a 0.6 percent decline at one point. The Nikkei gained 0.3 percent to 39,027.98.
Trump has said he plans to go ahead with 25 percent tariffs on Canada and Mexico but some analysts also said the potential impact is already partly priced into the market. “The market is partly prepared. The lesson from Trump 1.0. is that you should sell on the rumor of tariffs and buy on the fact,” said Toshiya Matsunami, chief strategist at Nissay Asset Management.
Even automakers, considered most vulnerable to tariffs because of their significant exports to the U.S. from factories in Japan and Mexico, managed to erase early losses and end with small gains. Toyota Motor ended 0.2% higher.
There will be temporary damage to the share prices of some automakers that ship to the U.S. from Mexico, said Yugo Tsuboi, chief strategist at Daiwa Securities.
Unless it’s a universal tariff, it won’t cause a significant drop in sentiment that would weigh on broader Japanese stocks, he added. Despite the market volatility, investors remain confident the Bank of Japan will go ahead with a long-anticipated interest rate hike on Friday.
Source: Bloomberg
