Japan’s Nikkei Stock Average Falls for Fourth Day on Rising Bond Yields, Greenland Tensions

Reuters

13:03 JST, January 20, 2026

TOKYO, Jan 20 (Reuters) – Japan’s Nikkei share gauge slid for a fourth-straight session on Tuesday as domestic fiscal concerns drove bond yields to record highs, while trade friction between the United States and Europe also weighed on sentiment.

The benchmark Nikkei 225 Index .N225 fell 0.8% to 53,172.16 in early trade, poised for the longest sell-off in two months. The broader Topix .TOPX slid 0.6% to 3,634.19.

Japanese Prime Minister Sanae Takaichi on Monday officially called for a snap election for February 8 and pledged to suspend the nation’s sales tax on food, spurring a surge in government bond yields to all-time highs.

While U.S. markets were closed for a holiday, European shares slumped overnight after U.S. President Donald Trump threatened to impose additional tariffs on eight European countries until the U.S. is allowed to buy Greenland.

“Rising interest rates are likely acting as a drag on the stock market,” said Maki Sawada, an equities strategist at Nomura Securities. Trump’s tariff threats “weighed on European stocks, and it appears that this trend is spreading to Japan’s stock market as well.”

Nomura expects stocks to rally if Takaichi’s ruling Liberal Democratic Party (LDP) wins a large majority in Japan’s lower house, fall if it loses power, and trade flat if it narrowly retains a majority, Sawada added.

There were 73 advancers on the Nikkei index against 150 decliners. The largest losers were Fuji Electric 6504.T, down 5.3%, followed by Recruit Holdings 6098.T, which sank 4.8%.

The largest gainers were Furukawa Electric 5801.T, up 6%, followed by Nichirei 2871.T, which rose 4.2%.