Tokyo Stock Market Dips Amid US Tariff Tensions
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Synopsis
On February 3, Tokyo stocks fell sharply due to fears regarding the effects of US tariffs on the global economy, leading to a sell-off in various sectors, notably in automotive stocks. The Nikkei index saw a significant decline, with major automakers feeling the impact.
Key Takeaways
- Nikkei index down 1,052.40 points.
- Concerns over US tariffs affecting global economy.
- Major automakers like Toyota and Nissan faced declines.
- SoftBank shows resilience with new AI partnership.
- EU vows to retaliate against US tariffs.
Tokyo, Feb 3 (NationPress) Tokyo stocks experienced a significant drop on Monday due to apprehensions regarding the influence of US tariffs on the global economy, prompting a wide-ranging sell-off, especially in the automotive sector.
The benchmark Nikkei stock index, known as the 225-issue Nikkei Stock Average, concluded down 1,052.40 points, translating to a 2.66 percent decline, finishing at 39,572.49.
This downturn followed US President Donald Trump's announcement to impose tariffs on Mexico, Canada, and China. As a result, short-term foreign investors offloaded stock index futures to mitigate risks, which added further pressure on the Nikkei.
Prominent automakers, including Toyota, Nissan, Honda, and Mazda, experienced downturns as worries mounted over the implications of tariffs on their profitability.
Nonetheless, amid the market's overall decline, certain individual stocks exhibited strength. SoftBank Group and its telecommunications branch, SoftBank, saw slight increases after revealing a collaboration with OpenAI to introduce a new AI service aimed at enterprises.
The broader Tokyo Stock Price Index (TOPIX) also faced a decline, closing 68.27 points, or 2.45 percent, lower at 2,720.39, according to Xinhua news agency.
Out of the listed stocks on the Tokyo Stock Exchange's Prime Market, 1,470 saw declines, whereas 154 rose, and 15 remained stable.
On Saturday, Trump mandated a 25 percent tariff on imports from Mexico and Canada, alongside a 10 percent tariff on products from China. He also indicated that the European Union (EU) might be next, referencing the bloc's ongoing trade surplus with the US.
In response, the European Commission criticized the decision on Sunday and pledged to retaliate if targeted.
“The European Union regrets the US decision to impose tariffs on Canada, Mexico, and China,” a spokesperson for the EU was quoted as stating.
They emphasized the significance of “open markets and adherence to international trade norms,” noting their crucial role in fostering robust and sustainable economic growth. “Tariffs induce unnecessary economic disruption and elevate inflation. They are detrimental to all parties involved,” they remarked.
Concerning potential US tariffs on EU goods, the spokesperson asserted, “the EU would respond decisively to any trading partner that unjustly or arbitrarily imposes tariffs on EU products.”
“Our trade and investment relationship with the United States is the most substantial globally. There is much at stake,” they were reported as saying.
