Nikkei plunge nears 9% as Japanese bank stocks plummet
Japan’s Nikkei share average tumbled nearly 9% early on Monday, while an index of Japanese bank stocks plunged as much as 17%, as concerns over a tariff-induced global recession continue to rip through markets.
The Nikkei dropped as much as 8.8% to hit 30,792.74 for the first time since October 2023. The index was trading down 7.3% at 31,318.79, as of 0034 GMT, Reuters reports.
All 225 component stocks of the index were trading in the red.
The broader Topix sank 8% to 2,284.69.
A topix index of banking shares slumped as much as 17.3%, and was last down 13.2%.
The bank index has borne the brunt of the sell-off in Japanese equities, plunging as much as 30% over the past three sessions.
Key events
US Treasury yields fell on Monday and the two-year yield sank to a multi-year low as worries of a possible recession in the world’s largest economy grew and investors wagered that could see US rates cut as early as May.
The two-year US Treasury yield, which typically reflects near-term rate expectations, tumbled more than 20 basis points to its lowest level since September 2022 at 3.4350%, as investors ramped up bets of more aggressive Federal Reserve easing this year, Reuters reports.
The benchmark 10-year yield last stood at 3.9158%, languishing near Friday’s six-month low of 3.8600%.
Futures now point to nearly 120 basis points’ worth of Fed cuts by December and markets swung to imply a roughly 60% chance the US central bank could ease rates in May, as policymakers seek to shore up growth in the world’s largest economy on the back of President Donald Trump’s latest tariff salvo.
JPMorgan ratcheted up its odds for a U.S. and global recession to 60%, as mentioned, and brokerages elsewhere similarly raised their probability of a US recession as tariff distress threatens to sap business confidence and slow global growth.
Nikkei plunge nears 9% as Japanese bank stocks plummet
Japan’s Nikkei share average tumbled nearly 9% early on Monday, while an index of Japanese bank stocks plunged as much as 17%, as concerns over a tariff-induced global recession continue to rip through markets.
The Nikkei dropped as much as 8.8% to hit 30,792.74 for the first time since October 2023. The index was trading down 7.3% at 31,318.79, as of 0034 GMT, Reuters reports.
All 225 component stocks of the index were trading in the red.
The broader Topix sank 8% to 2,284.69.
A topix index of banking shares slumped as much as 17.3%, and was last down 13.2%.
The bank index has borne the brunt of the sell-off in Japanese equities, plunging as much as 30% over the past three sessions.
Nikkei plummets nearly 8%
The Nikkei 225 has now dived nearly 8% after the Wall Street meltdown over Donald Trump’s tariffs.
Japan’s benchmark stock index sank 7.8% to lows last seen in late 2023. South Korea lost 4.6%.
As reported earlier, Trump said on the falling markets that “medicine” could be necessary at times, and he was not intentionally engineering a market selloff.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” the US president told reporters aboard Air Force One.
The market carnage came as White House officials showed no sign of backing away from their sweeping tariff plans, Reuters reports, and China declared the markets had spoken on their retaliation through levies on US goods.
Trump said he would not do a deal with China until the US trade deficit was sorted out.
Almost $5tn was wiped off the value of global stock markets last week after Donald Trump launched his tariff offensive last Wednesday.
The US market was particularly hard hit. The benchmark S&P 500 lodged its biggest weekly drop since March 2020 and the Nasdaq Composite on Friday ended down more than 20% from its December record high, confirming the tech-heavy index is in a bear market.
The Dow Jones Industrial Average finished the week down well over 10% from its December record high, marking a correction for the blue-chip index.
Oil prices fell more than 3% on Monday – extending losses from the previous week – on growing concerns that a global trade war could slow the global economy and weaken oil demand.
Brent futures declined $2.1, or 3.2%, to $63.48 a barrel at 1027 GMT, while US West Texas Intermediate crude futures lost $2.14, or 3.5%, to $59.85, Reuters reports.
Both benchmarks plunged 7% on Friday to settle at their lowest in over three years as China ramped up tariffs on US goods in retaliation at Donald Trump’s tariffs, escalating a trade war that has led investors to price in a higher probability of recession.
Responding to Trump’s tariffs, China on Friday said it would impose additional levies of 34% on American goods, confirming investor fears that a full-blown global trade war is under way.
Investment bank JPMorgan said it now saw a 60% chance of a global economic recession by year-end, up from 40% previously.
Nikkei drops over 7%
Japan’s Nikkei index has plunged more than 7%, Agence France-Presse is reporting, after having it down 5% and, a little earlier, 3.6% following its opening today.
The fall extends last week’s 9% drop – its steepest one-week percentage decline since March 2020.
You have to ‘take medicine’ sometimes – Trump
Donald Trump has said about falling markets that “medicine” can be necessary at times, adding that he was not intentionally engineering a market selloff.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” the US president told reporters aboard Air Force One on the economic fallout from his sweeping tariffs.
Welcome
Hello and welcome to our business blog covering the global fallout to the tariffs imposed by Donald Trump last week.
The US president’s decision to bring in levies of up to 50% on imports into the US rocked stock markets. As a new week dawns, traders, investors and consumers across the world are braced for further falls.
Stay with us to follow all the developments.
