tokyo stocks rattled: nikkei plunges on us investor sell-off fears

2025-04-11 general

Tokyo, Friday, 11 April 2025.
tokyo’s stock market is reeling. the nikkei average took a nosedive, dropping by as much as 1900 yen, crashing below the 33,000 yen mark. this dramatic downturn follows speculation of major stock sell-offs by us long-term investors. compounding the issue, us-china trade tensions are escalating, casting a shadow over market stability. after a brief respite from trump-era tariffs, the nikkei’s gains were short-lived.

market overview

The Nikkei Stock Average experienced a sharp downturn on the Tokyo Stock Exchange [1]. The decline from the previous day temporarily exceeded 1900 yen, causing it to fall below 33,000 yen [1]. In the morning session, the Nikkei average closed at 33,148.45 yen, a decrease of 1460.55 yen or 4.406 ≈ 4.2% from the previous day [1]. The JPX Nikkei 400 was down 4.07%, the Nikkei 300 was down 4.23%, and the Nikkei 500 Average was down 3.31% [7]. Conversely, the Nikkei ESG-REIT Index showed a slight increase of 0.33% [7].

factors influencing the plunge

Speculation of significant sales of major stocks by U.S. long-term investors is a primary factor [1]. Intensifying U.S.-China trade tensions further exacerbate the situation [1]. The market’s instability is expected to persist for some time [1]. The rapid reversal highlights the market’s sensitivity to trade-related developments [4]. The Dow Jones Industrial Average fell by 1014.79 dollars, or 2.50%, closing at 39,593.66 dollars [8]. This triple decline in stocks, bonds, and the dollar in the U.S. market is triggering deleveraging by hedge funds, which is driving the selling of risk assets globally [2].

currency market impact

The yen has strengthened against the dollar, briefly reaching 142 yen per dollar [3]. This represents the highest level for the yen since late September 2024 [3]. Concerns over escalating U.S.-China trade friction have fueled the move away from the dollar [3]. The dollar index (DXY), which measures the dollar’s strength against major currencies, temporarily dipped below 100 [3]. This currency movement reflects investors seeking safe-haven assets amid market uncertainty [3].

expert analysis and market sentiment

Goldman Sachs analysts suggest that adjustment risks remain in U.S. stocks [2]. Overseas investors anticipate profits from short positions in the stock index futures market [2]. This strategy involves profiting from the market’s downside through ‘yen buying and stock price index futures selling’ [2]. Despite the overall negative sentiment, some bargain-hunting activity is emerging [9]. However, risk aversion remains dominant due to concerns over trade policies [9].

domestic trading activity

In the after-noon session, the Nikkei average was trading around 33,200 yen, approximately 1400 yen lower than the previous day [9]. There is strong concern that tariff policies by the trump administration will lead to trade friction between the US and China and selling for the purpose of avoiding risk is dominant [9]. A basket trade, where large domestic and overseas investors trade multiple stocks in bulk, amounted to approximately 64.6 billion yen [9]. As of 12:45 PM, the estimated turnover on the Tokyo Stock Exchange Prime market was 2.795 trillion yen with 1,242.73 million shares traded [9].

Bronnen

Nikkei decline Stock sales