Nikkei drops to two-week low as Yen strengthens, tariff worries mount
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Nikkei and Topix slide as yen gains strength
Japan’s Nikkei 225 (ni225) closed 1.24% lower at 38,678.04, its lowest level since february 3, while the Topix (topix) dropped 1.18% to 2,734.6. The sell-off was triggered by a strengthening japanese yen (usd/jpy down 0.86%), which pressured exporters, particularly in the automotive sector.
Automakers hit hard as stronger yen weighs on earnings outlook
The rising yen, fueled by expectations of further Bank of Japan (BOJ) rate hikes, dampened sentiment for major japanese exporters. Toyota (7203) fell 1.63%, Honda (7267) lost 1.37%, and Nissan (7201) plunged 2.83%, dragging the market lower. The currency’s strength makes overseas profits less valuable when repatriated to Japan, adding to concerns over Japan’s export-driven economy.
Trump’s tariff threats add to uncertainty
Investors are also reacting to Donald Trump’s latest tariff warnings, with planned duties on lumber, cars, semiconductors, and pharmaceuticals expected to be announced within a month. This has fueled market uncertainty, particularly for Japan’s automobile and tech sectors, which are highly dependent on exports to the U.S.
Financial stocks retreat as boj expectations shift
Japanese banks, which had been rallying on hopes of a BOJ policy shift, also pulled back. Mitsubishi UFJ Financial (8306) fell 1.94%, while Mizuho Financial (8411) lost 1.93%, as concerns over a stronger yen and global trade risks weighed on the sector.
Trading outlook
With the Nikkei breaking below key support at 39,000, further downside risk remains if the yen continues to strengthen. Support sits at 38,400, with a potential rebound if risk sentiment stabilizes. However, uncertainty around U.S. tariffs and BOJ policy shifts will keep markets volatile in the near term.
Japan’s Nikkei 225 (ni225) closed 1.24% lower at 38,678.04, its lowest level since february 3, while the Topix (topix) dropped 1.18% to 2,734.6. The sell-off was triggered by a strengthening japanese yen (usd/jpy down 0.86%), which pressured exporters, particularly in the automotive sector.
Automakers hit hard as stronger yen weighs on earnings outlook
The rising yen, fueled by expectations of further Bank of Japan (BOJ) rate hikes, dampened sentiment for major japanese exporters. Toyota (7203) fell 1.63%, Honda (7267) lost 1.37%, and Nissan (7201) plunged 2.83%, dragging the market lower. The currency’s strength makes overseas profits less valuable when repatriated to Japan, adding to concerns over Japan’s export-driven economy.
Trump’s tariff threats add to uncertainty
Investors are also reacting to Donald Trump’s latest tariff warnings, with planned duties on lumber, cars, semiconductors, and pharmaceuticals expected to be announced within a month. This has fueled market uncertainty, particularly for Japan’s automobile and tech sectors, which are highly dependent on exports to the U.S.
Financial stocks retreat as boj expectations shift
Japanese banks, which had been rallying on hopes of a BOJ policy shift, also pulled back. Mitsubishi UFJ Financial (8306) fell 1.94%, while Mizuho Financial (8411) lost 1.93%, as concerns over a stronger yen and global trade risks weighed on the sector.
Trading outlook
With the Nikkei breaking below key support at 39,000, further downside risk remains if the yen continues to strengthen. Support sits at 38,400, with a potential rebound if risk sentiment stabilizes. However, uncertainty around U.S. tariffs and BOJ policy shifts will keep markets volatile in the near term.