Japan’s Nikkei Stock Average Ekes out Gains as US Tariffs, Growth Concerns Keep Trade Volatile (UPDATE 1)

Reuters

12:15 JST, March 12, 2025 (updated at 16:30 JST)

TOKYO, March 12 (Reuters) – Japan’s Nikkei share average rose in choppy trade on Wednesday as investors bought back shares after sharp declines in the last session, although concerns about U.S. tariffs and their impact on the global economy continued to weigh on sentiment.

After see-sawing between gains and losses throughout the day, the Nikkei closed 0.1% higher at 36,819.09, while the broader Topix gained 0.9% to close at 2,694.91.

Analysts hinted at share buy-backs after the Nikkei fell to a six-month low on Tuesday, while reports that Ukraine would accept a U.S. proposal for a ceasefire with Russia eased the risk-off mood.

But investors treaded carefully ahead of a U.S. inflation report due later in the day, while growth concerns in the world’s largest economy persisted amid U.S. President Donald Trump’s ever-changing tariff policies.

“Investor sentiment has turned cautious amid emerging signals that the strength of the U.S. economy may be weakening, with rising odds of a recession scenario in the near term,” said Samuel Hoang, a portfolio manager for Japan funds at Eastspring Investments in Singapore.

Growth concerns in the United States have dragged on the sentiment in Japan’s stock market given the close relationship between the Japanese and U.S. economies, he said.

Year-to-date, the Nikkei has lost 7.8%.

The financial sector outperformed on the day, buoyed by rising Japanese government yields. Banks advanced 2.3% to lead gains among the Tokyo Stock Exchange’s 33 industry sectors.

Many of Japan’s biggest companies met demands for substantial wage hikes after concluding talks with unions on Wednesday, bolstering bets that the Bank of Japan would raise interest rates higher.

Among major shares, Advantest fell 4.7% to weigh the most on the Nikkei. SoftBank Group slid 0.8% and Lasertec slumped 5.4%, while Sony Group surged 3.6%.

Nissan Motor gained 0.6% after the automaker on Tuesday named company veteran Ivan Espinosa its next chief executive.