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Nikkei Plunges Over 4% as Trump Announces New Tariffs

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The Nikkei stock index dropped momentarily by over 4 percent on Thursday, reaching its lowest point in eight months. This decline was prompted by worries about the Japanese economy following U.S. President Donald Trump’s announcement of a retaliatory tariff of 24 percent imposed on Japan.

The Nikkei Stock Average with 225 issues dropped 1,052.18 points, equivalent to a decline of 2.95%, ending at 34,673.69 from Wednesday. Meanwhile, the more extensive Topix index decreased by 87.58 points, representing a drop of 3.30% to reach 2,562.71.

In Tokyo, the U.S. dollar experienced a significant decline, reaching the higher 147 yen range. This occurred as the yen, considered a safe haven, attracted buyers following Trump’s statement, according to traders.

By midday, the dollar was trading at 147.79-80 yen, down from 149.30-40 yen in New York and 149.65-67 yen in Tokyo as of 5 p.m. on Wednesday.

The euro was trading at $1.0912-0913 and 161.27-29 yen compared to $1.0843-0853 and 162.10-20 yen in New York, and at $1.0791-0792 and 161.49-53 yen in Tokyo late Wednesday afternoon.

The Nikkei index briefly dropped by approximately 1,600 points, falling beneath the 35,000 mark, following widespread selling of stocks after Trump announced that a base tariff of 10 percent would be applied to all imported goods and indicated that Japan could face an even higher tax rate.

Kazuo Kamitani, who works as a strategist in the Investment Content Department at Nomura Securities Co., expressed surprise at the tariffs imposed on Japan, stating they were higher than anticipated. He had expected the rates to fall within the range of 10 to 20 percent.

He stated that a cautious sentiment dominated the financial markets due to the further bad news.

Trump’s announcement of the reciprocal tariffs came as the United States is set to impose on Thursday a 25 percent tariff on cars produced outside the country.

Brokers mentioned that some reductions were made afterward in anticipation of potential negotiations between countries and the United States regarding tariff levels.

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