TOKYO: Japan’s Nikkei fell on Tuesday, as markets were jittery about a trade war as fresh US tariffs came into effect, while a stronger yen added to investors’ concerns.
US President Donald Trump’s new 25% tariffs on imports from Mexico and Canada took effect, along with a doubling of duties on Chinese goods to 20%, launching new trade conflicts with the top three US trading partners.
The Nikkei dropped as much as 2.6% to its lowest level since September 18, before paring losses to finish down 1.2% at 37,331.18. The broader Topix closed 0.7% lower at 2,710.18.
Automakers declined after yen rose to near its strongest since early December against the US dollar, with Hino Motors dropping the most at 3.3%.
Trump on Monday said that he told leaders of Japan and China they cannot continue to reduce the value of their currencies as doing so would be unfair to the United States.
The sharp fall in equities was a “combination of the yen strengthening and fear of tariff policies, as well as the tech weakness since last week, all mixed together,” said Naka Matsuzawa, chief macro strategist at Nomura Securities.