Investing.com-- Japan’s benchmark stock index plunged nearly 9% to its 17-month low on Monday, battered by U.S. President Donald Trump’s sweeping new trade tariffs, including a 25% levy targeting auto imports—a direct hit to Japan’s export-driven economy.
Japan’s Nikkei 225 index slumped as much as 9% to 30,629.50 on Monday, reaching its lowest level since early November 2023. The index was trading 6.5% lower at 31,615.20 as of 01:05 GMT. Nikkei lost more than 9% last week, led by losses in banking stocks.
Japan’s broader TOPIX index also slid more than 8% on Monday.
In the banking sector, Japan Post Bank Co Ltd (TYO:7182) shares slumped over 11%, while Mitsubishi UFJ (NYSE:MUFG) Financial (TYO:8306) stock plunged 13%.
Sumitomo Mitsui Financial (TYO:8316) shares plummeted over 12%, while Mizuho Financial Group (TYO:8411) lost more than 10%.
President Trump on April 2 announced a sweeping set of tariffs aimed at reshaping global trade dynamics, starting with a 10% universal baseline tariff on all imported goods.
He also announced aggressive reciprocal tariffs, set to take effect on April 9, 2025. Additionally, Trump reaffirmed the 25% tariff on imported automobiles and auto parts, also scheduled to begin on April 9.
Japan is particularly vulnerable to these tariffs due to its heavy reliance on trade, especially in key sectors like automobiles, technology, and industrial manufacturing.
The Japanese yen was also sharply stronger on Monday, weighing on exporters.
Japanese automakers such as Toyota Motor (NYSE:TM) Corp (TYO:7203), Honda Motor (TYO:7267), and Nissan Motor (TYO:7201) are deeply integrated into the U.S. market.
Nissan (OTC:NSANY) shares declined 7% on Monday, while Toyota shares fell nearly 4%. Mazda Motor (OTC:MZDAY) Corp (TYO:7261) shares plunged nearly 8%, while Honda (NYSE:HMC) shares were trading 4% lower.