(Bloomberg) — Japanese shares plunged, putting the Nikkei stock gauge on track for its worst quarter since March 2020, as exporter- and chip-related stocks slid on concerns about the global trade war.
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The Nikkei 225 Stock Average fell as much as 4.2%, its biggest intraday drop since September. The broader Topix index retreated 3.9%, with financial and electronic appliance companies the biggest drags. A stronger yen added to pressure on exporters’ shares.
The moves were in line with declines across the region, as traders trimmed exposure to equities ahead of the April 2 deadline for US President Donald Trump’s reciprocal tariffs. Sentiment also took a hit after data released Friday showed that consumer spending in the world’s biggest economy trailed economists’ estimates in February.
“That weakening of the US economy is going to keep weighing on stocks in countries like Japan that are big exporters to the US,” said Phillip Wool, head of portfolio management at Rayliant Global Advisors Ltd. “Some investors had still been assuming America’s closest allies would be spared from a trade fight, or that Trump wouldn’t ultimately go through with these threats.”
Six of 10 of the bigger decliners on the Nikkei index were chip stocks, with Renesas Electronics Corp. and Socionext Inc. tumbling more than 8% each.
The Nikkei gauge has declined more than 10% since end-December, while the Topix has dropped over 4%.
“This is a risk-averse move based on concerns that economic activity will be suppressed due to the lack of clarity over the landing point of the Trump administration’s policies, including tariffs,” said Tetsuo Seshimo, a portfolio manager at Saison Asset Management Co. “In the case of Japan, when there is a risk-off, the yen appreciates at the same time, so that also has an impact.”
–With assistance from Toshiro Hasegawa.
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