Markets

Japan’s Nikkei Snaps 7-Day Winning Streak as US Tariff Worries Weigh

Yomiuri Shimbun file photo
The Tokyo Stock Exchange

Reuters

16:49 JST, May 7, 2025

TOKYO, May 7 (Reuters) – Japan’s Nikkei share average edged lower on Wednesday, snapping a seven-session winning streak by the tiniest of margins, as pharmaceutical shares sank after U.S. President Donald Trump said he would reveal tariffs on drugs over the next two weeks.

Automaker stocks also slumped as Japanese investors returned from a four-day weekend to an overall stronger yen, which reduces the value of overseas revenues. Sony Group, which runs a movie studio, slid following Trump’s announcement of a 100% levy on foreign-made films.

Tariff worries overshadowed news that U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China’s economic tsar, He Lifeng, in Switzerland this weekend for talks that could start the process of de-escalation in their tense trade stand-off.

Investors were also reluctant to take the Nikkei above Friday’s five-week peak before hearing Federal Reserve Chair Jerome Powell’s stance on future interest rate cuts at the conclusion of the U.S. central bank’s two-day policy meeting later in the day.

The Nikkei ended the day down 0.14%, dipping from just north of flat right at the closing bell.

The biggest drags on the index by index points included Sony and drugmaker Terumo, which lost 4% and 2.8% respectively.

With so many issues regarding tariffs still unresolved, investors were not in a position to chase the market higher, said Nomura strategist Fumika Shimizu.

Overall, the Nikkei’s performance was fairly balanced, with 114 of its 225 components rising, 109 falling and two flat.

The broader Topix, by contrast, rose 0.3%.

The Nikkei’s four biggest decliners in percentage terms were drugmakers, led by Eisai’s 4.8% tumble. Kyowa Kirin and Sumitomo Pharma each declined 4.5%, followed by a 4.3% loss for Shionogi.

Mitsubishi Motors was the worst-faring automaker, sliding 3.3%. Toyota shed 2.7% ahead of earnings on Thursday.

Trading houses were a bright spot after Berkshire Hathaway affirmed its commitment to investments in those businesses even as Warren Buffett stepped aside as CEO.

Marubeni was the Nikkei’s biggest percentage gainer, climbing 6.4%. While Mitsubishi Corp advanced 3.7%, both Sumitomo Corp and Itochu Corp rose 3.5%, and Mitsui & Co added 3.1%.