Trump’s Threats to Impose Tariffs on Cars Cause Japanese Stocks to Decline
Japanese stocks fell on Wednesday, dragged down by a decline in the auto sector after U.S. President Donald Trump announced plans to impose tariffs on car imports. The move has raised concerns about escalating global trade tensions.
Shotaro Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory, said, “The Nikkei index started the session lower, with market sentiment affected by Trump’s statements about potential tariffs on cars.”
Trump stated on Tuesday that he intends to impose tariffs of up to 25% on imports of cars, semiconductors, and pharmaceuticals, a decision that could intensify international trade conflicts.
Market Movements
The Nikkei index closed down 0.27% at 39,164.61 points. The broader Topix index also declined, ending the day at 2,767.25 points, down 0.30%.
Auto Sector Performance
Toyota Motor fell 1.73%, exerting the most significant pressure on the Topix index. Honda dropped 2.26%, while Nissan declined 1.87%. The auto sector index fell 1.3% overall.
Impact of Bank of Japan Policies
In a related development, Hajime Takata, a member of the Bank of Japan’s board, warned that keeping interest rates low for an extended period could increase financial risks and lead to excessive inflation. He suggested that the bank might consider raising rates.
Commenting on this trend, Shotaro Yasuda added, “While global central banks are moving toward cutting rates, the Bank of Japan’s potential rate hike may not be positive for Japanese stocks.”
Financial and Semiconductor Sector Performance
Bank stocks rose amid expectations of a rate hike. Sumitomo Mitsui Financial Group shares increased by 2.05%, and Mizuho Financial shares rose 0.59%.
Despite Mitsubishi UFJ Financial Group hitting a record high in early trading, its shares ended the session down 0.52%.
Semiconductor company stocks saw gains, with Tokyo Electron rising 3.52% and Advantest climbing 1.02%. This uptick was supported by the S&P 500 closing at a new record high on Tuesday.
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