Japan’s benchmark Topix index slid to enter a technical correction as global investors dumped riskier assets on concern Donald Trump’s tariffs will slow the world economy.
Exporters of electronics and automobiles were among the heaviest drags on the Topix as the yen headed toward its strongest level against the dollar since October. Banks slid more than 11% during the day as Trump’s tariffs cast doubts over the Bank of Japan’s willingness to raise interest rates.
“The tariff was much higher than expected, so the damage to business performance is likely to be greater than initially thought,” said Ikuo Mitsui, a fund manager at Aizawa Securities Co. “The risk-off mood prevails.”
The Topix fell 12% from its March peak, less than a week after the Nikkei 225 Stock Average entered a correction from its December high on concerns about a global trade war. Both gauges had the worst weekly loss since March 2020.
With tariffs clouding the outlook for global trade, Mitsui has been trimming exposure to tech and other sectors reliant on foreign demand. Meanwhile, he’s adding companies that rely on domestic sales and have less risk.
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The Topix fell 3.4% to 2,482.06 as of the market close in Tokyo, while the blue-chip Nikkei declined 2.8% to 33,780.58. The Tokyo Stock Exchange Growth Market 250 Index dropped as much as 7.5%, triggering a circuit breaker.
