The Japanese stock market experienced a significant drop on Monday, with the Nikkei 225 index falling as much as 2.6% during early trading. Auto stocks were particularly hard hit, with the share prices of Toyota, Honda, and Nissan all suffering steep declines. Daiwa Securities Senior Strategist Kentaro Hayashi pointed out that the uncertainty of the global economic outlook, especially with Trump's announcement of new tariff policies, has dampened market confidence, causing investors to worry that Japanese exports might become a new target of US tariff policies.
Trump's new tariff measures have exacerbated the global economic unease, and could also lead to rising prices in the US, a stronger dollar, and higher yields, all of which might impact Japan's monetary policy. The broad decline in the Japanese stock market also reflects concerns about a global economic slowdown, with all 33 sector indices on the Tokyo Stock Exchange showing declines.
Particularly in the automotive sector, Toyota's share price fell by as much as 4.8%, Honda's by 6.7%, and Nissan's by 5%. Fumio Matsumoto, Chief Strategist at Okayama Securities, stated that if the US imposes more tariffs on imported cars, Japanese automakers may need to raise prices, affecting their market competitiveness.
Notably, while most stocks were falling, game manufacturer Konami's share price rose by 12.7%, offering the largest support to the Nikkei index. Overall, among the more than 1,600 stocks on the Tokyo Stock Exchange, 85% fell, 12% rose, and only 1% remained unchanged.
The Nikkei Volatility Index also climbed to its highest level since last December, indicating that market uncertainty and panic are intensifying.
