Japan's Nikkei stumbles after Trump pledges fresh tariffs

Fujikura

26/11/2024 03:10

(Updates with mid-session trading)
    By Brigid Riley
       TOKYO, Nov 26 (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  .N225  was down 1.3% at 38,260.38, as of
the midday break, after sliding nearly 2% during morning trade.
The broader Topix  .TOPX  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  6857.T  was among
the biggest decliners by percentage and the largest drag on the
Nikkei, down 5.6%. Tokyo Electron  8035.T  tumbled 3%.
         Electronics component maker Fujikura Ltd  5803.T 
dropped 6.8%, while microchip equipment maker Lasertec Corp
 6920.T  fell 5.5%, both among the biggest percentage losers.
    Major automakers Toyota Motor  7203.T  and Honda Motor
 7267.T  fell 2% and 1%, respectively.
    The machinery sector lost nearly 2%. Mitsubishi Heavy
Industries  7011.T  stumbled 3.5%, while Kawasaki Heavy
Industries  7012.T  shed 4.3%.
    Shares of IHI  7013.T  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.
       
  

 (Reporting by Brigid Riley; Editing by Sumana Nandy and Sherry
Jacob-Phillips)
 ((brigid.riley@thomsonreuters.com;))