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Yomiuri Shimbun file photo The Tokyo Stock Exchange
Reuters
10:43 JST, November 26, 2024 (updated at 12:13 JST)
TOKYO (Reuters) – Japan’s Nikkei share average declined on Tuesday as the market reacted to U.S. President-elect Donald Trump’s pledge to impose tariffs on all imports from Canada and Mexico, along with additional tariffs on China.
The Nikkei index was down 1.3% at 38,260.38, as of the midday break, after sliding nearly 2% during morning trade. The broader Topix also slid 1.3% to 2,681.66.
Trump said on Monday that on his first day in office he would impose a 25% tariff on all products from Mexico and Canada and an additional 10% tariff on goods from China, citing concerns over illegal immigration and trade of illicit drugs.
“Ten percent across the board (for China) is not as big as the one that he was talking about, 60%. But it still came in a more concrete way, so I think the initial reaction was rather negative,” Nomura’s chief macro strategist Naka Matsuzawa said.
The 25% tariff plans on imports from Canada and Mexico were probably bigger than the market expected, Matsuzawa added.
China-related sectors such as machinery will likely be more affected, along with exporters, he said.
Investors reacted with caution toward the latest tariff pledge, with exporter shares and chip-related stocks sliding.
Chip-testing equipment maker Advantest was among the biggest decliners by percentage and the largest drag on the Nikkei, down 5.6%. Tokyo Electron tumbled 3%.
Electronics component maker Fujikura Ltd dropped 6.8%, while microchip equipment maker Lasertec Corp fell 5.5%, both among the biggest percentage losers.
Major automakers Toyota Motor and Honda Motor fell 2% and 1%, respectively.
The machinery sector lost nearly 2%. Mitsubishi Heavy Industries stumbled 3.5%, while Kawasaki Heavy Industries shed 4.3%.
Shares of IHI were down 3.8%, with news that Japan’s space agency has halted an engine combustion test of its Epsilon S rocket after a fire broke out at the test site also weighing on sentiment.
Most Nikkei 225 constituents dropped, with 164 decliners outnumbering 55 advancers, while six shares remained untraded.
