tokyo stocks plummet: trump's tariff threats trigger market rout

2025-03-31 general

Tokyo, Monday, 31 March 2025.
the nikkei average plunged to a 7.5-month low, dropping 4.05% to 35,617.56, as anxieties over president trump’s potential tariff policies intensified. this nosedive reflects broader concerns about trade stability. the threat of worldwide tariffs, possibly revealed on april 2, sent investors fleeing. the fall marks a nearly 12% decrease from december highs, with analysts suggesting the index may seek a lower bottom if it breaches 35,000.

market overview

The Tokyo Stock Exchange faced a significant downturn, with the Nikkei experiencing a substantial loss [1]. The Nikkei’s closing value was 35,617.56, a decrease of 1502.77 yen, or 4.05%, from the previous trading session [1]. This decline marks the lowest level in approximately seven and a half months [1]. The broader TOPIX index also fell, dropping 3.57% to close at 2,658.73 [1]. The JPX Prime 150 index similarly declined, ending the day at 1,149.01, a 3.84% decrease [1].

investor sentiment and economic concerns

Investor sentiment has soured due to concerns about a potential economic slowdown in the United States and the resurgence of inflation [1]. These worries were amplified by a sharp sell-off in U.S. stocks on the preceding Friday [1][2]. The decline in U.S. markets was triggered by the release of the U.S. Personal Consumption Expenditures (PCE) price index for February, which heightened fears of renewed inflationary pressures [1]. Masahiro Yamaguchi, head of investment research at SMBC Trust Bank, suggested that the potential for rising prices due to the U.S. administration’s tariff policies is fueling inflation concerns [1].

expert analysis and future outlook

The Nikkei’s weakness intensified following reports that President Trump indicated his planned ‘reciprocal tariffs,’ expected to be announced on April 2, would apply to all countries and regions [1]. Yamaguchi from SMBC Trust Bank anticipates continued downward pressure on Japanese stocks until the full impact of Trump’s tariffs becomes clear [1]. He cautioned that a break below 35,000 on the Nikkei could lead to a search for a second bottom [1]. The current market conditions reflect a risk-off sentiment among investors, prompting many to reduce their exposure to equities [5].

Bronnen

Nikkei Trump Tariffs