Japan’s Nikkei Stock Average Pinned to 8-Month Low as US Tariffs Loom (UPDATE 1)

Reuters

13:42 JST, April 1, 2025 (updated at 16:00 JST)

TOKYO, April 1 (Reuters) – Japan’s Nikkei struggled for headway on Tuesday and was pinned near an eight-month low as traders braced for another round of painful U.S. tariffs, likely to hit sales of Japanese exporters.

The Nikkei index closed more or less flat at 35,624.48, having failed to sustain the morning’s bounce.

The benchmark had logged a 10.7% fall for the first quarter on Monday, its largest drop since the pandemic-struck start of 2020, as a darkening trade outlook pummeled Japan’s exporters and the yen benefitted from global flight to safety.

The broader Topix closed 0.1% higher at 2,661.73. It logged a much smaller quarterly drop of 4.5% on Monday.

“The Nikkei pared its gains as the yen’s strength weighed on exporters,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.

The yen was a fraction higher at 149.84 per U.S. dollar on the day and has rallied about 4.3% year-to-date.

U.S. President Donald Trump is expected to announce a broad round of fresh U.S. tariffs on Wednesday.

“Chip-related stocks capped further gains of the Nikkei.

There is a growing concern globally about the demand for data centers,” Yasuda said.

Chip-testing equipment maker Advantest fell 2.9% and cable maker Fujikura lost 3.1%. Electronics components maker Alps Alpine’s 5% drop was the largest decline for the Nikkei.

Earlier in the day, the Bank of Japan’s (BOJ) closely-watched “tankan” survey showed that the headline index measuring big manufacturers’ business confidence stood at +12 in March, in line with the median market forecast.

The data could have strengthened the yen as it left open the possibility of early interest rate hikes by the BOJ, Yasuda said.