Japanese Stocks Drop on Wild U.S. Volatility Ahead of Tariffs
Japanese stocks fell as wild swings on Wall Street sapped investor confidence ahead of the full implementation of U.S. trade tariffs.
The broader Topix index fell 3.1% to 2,356.41 as of 9:07 a.m. in Tokyo, while the Nikkei 225 Stock Average dropped 3% to 32,031.18. Exporters fell after the yen jumped more than 1% against the dollar overnight and extended its gains Wednesday.
President Donald Trump spent the final hours before his tariffs were set to take effect setting up talks with U.S. allies, but his insistence on pressing ahead with a broad 104% tariff on many Chinese goods dimmed optimism that a brutal trade war could be avoided. The S&P 500 closed down 1.6%, putting it on the brink of a bear market.
The entire market is likely to sell off regardless of sector, said Ryuta Otsuka, a strategist at Toyo Securities Co. There is a possibility that speculative trading in futures markets is increasing intraday volatility, and there is a sense that medium- to long-term investors are staying out of the market, he said.
Global market volatility is likely to weigh on sentiment despite hopes that Japan may reach a trade deal with the U.S. to reduce or avoid 24% levies. Both the Topix and Nikkei 225 jumped about 6% on Tuesday in their biggest gains since August, after a phone call between Prime Minister Shigeru Ishiba and Trump fueled optimism about a last-minute deal.
Source: Bloomberg
