The Nikkei 225 saw a sharp sell-off on the morning of the 24th on the Tokyo Stock Exchange. The index finished the morning session at 64,568.75, down 1,853.85 points (2.79%) from the previous business day, with losses widening at one stage to 2,088.31 points (3.14%) to hit 64,334.29. In addition to the previous day’s decline in U.S. stocks, a surge in crude oil prices due to escalating tensions in the Middle East and caution over new additional tariffs to be imposed by the Trump administration on the afternoon of the 24th Japan time combined to strengthen investor risk aversion.<\/p>\n
The Tokyo Stock Price Index (TOPIX) was also weak, down 1.01% at 4,012.79, with trading value on the TSE Prime market reaching \u00a54,336,145 million (approximately $26.5 million). Declining issues numbered 952, accounting for 61% of the total, while advancing issues were limited to 562 (36%). Globally, the risk-off chain was evident, with U.S. Nasdaq futures turning negative and South Korea’s KOSPI index temporarily falling more than 5%.<\/p>\n
Sell-Off Concentrated in Semiconductor-Related Stocks<\/p>\n
Among major issues, Disco (6146.T), which announced its April-June 2026 quarter earnings the previous day, plummeted over 14%, recording the worst decline in the market. Caution over the outlook for the semiconductor market surfaced all at once. Tokyo Electron (8035.T) and Advantest (6857.T) fell more than 5-6%, reversing the momentum that had significantly boosted the Nikkei average the previous day to become a drag on the index. SoftBank Group (9984.T) fell over 7%, and Kioxia Holdings (285A.T) dropped more than 9%, highlighting the selling pressure concentrated in the high-tech and semiconductor sectors.<\/p>\n
Meanwhile, buying was seen in 12 defensive sectors, including pharmaceuticals, insurance, and shipping, with Chugai Pharmaceutical (4519.T) showing firm movement, rising over 3%. On an individual basis, KOA (6999.T) surged over 10% after announcing upward revisions and a dividend increase, ranking second in terms of percentage gain.<\/p>\n
Mutsumi Kagawa, Global Strategist at Marine Strategies, analyzed: “With crude oil prices rising again due to escalating tensions in Iran and expectations of U.S. rate hikes strengthening on inflation concerns, growth stocks are in an environment where they are easily sold.” He also pointed out, “Next week marks the peak of earnings announcements from major U.S. tech companies and domestic semiconductor-related firms, so caution is also heightening in the market.” Furthermore, he expressed the view that “while fundamentals such as corporate earnings remain not bad, the fact that the market had temporarily rebounded after the sharp decline at the end of last week means that selling on rallies may be weighing on the market.”<\/p>\n
New U.S. Administration Imposes 12.5% Tariff on Japan<\/p>\n
Amplifying the market turmoil was the announcement of new tariff measures by the Trump administration. On the 23rd, the U.S. Trade Representative (USTR) announced that it would impose punitive tariffs under Section 301 of the Trade Act on 60 countries and regions, including Japan, citing insufficient measures to ban imports of products produced through forced labor. The tariffs take effect at 12:01 a.m. U.S. Eastern Time on the 24th (1:01 p.m. Japan time on the same day). The tariff rate applied to Japan is 12.5%, effectively representing an increase from the 10% “alternative tariff” that had been uniformly imposed on countries worldwide.<\/p>\n
This measure is positioned as a successor to the temporary uniform 10% tariff set to expire on July 24, following the U.S. Supreme Court’s ruling in February that “reciprocal tariffs” were illegal. In its investigation report, the USTR cited rice from Myanmar, polysilicon (a raw material for solar panels) from China’s Xinjiang Uyghur Autonomous Region, cotton, and tobacco from Malawi as specific examples of products produced through forced labor. For Japan, it applied the higher 12.5% rate, stating that “measures to ban imports of such products have not been effectively implemented.”<\/p>\n
Tariff rates are divided into two tiers by country and region, with 19 countries and regions, including Canada, the European Union (EU), Mexico, and Pakistan, kept at 10%. Meanwhile, Japan and other countries and regions were set at 12.5%. However, special provisions were included for Japan, exempting products already subject to item-specific tariffs, such as automobiles, steel, and aluminum, from the new additional tariffs, and setting a cap ensuring that “combined with existing tariffs, the rate does not exceed 12.5%.”<\/p>\n
Government Ministers Express “Regret” and Call for Calm Analysis<\/p>\n
Reactions from Japan’s administration came swiftly. At a press conference on the morning of the 24th, Minister of Economy, Trade and Industry Ryoji Akazawa expressed displeasure, stating, “Despite the fact that Japan’s industries and trade are conducted in accordance with international rules, this measure imposing tariffs on Japan on the grounds of the absence of import ban measures on products produced through forced labor is regrettable.” He further explained that through prior consultations with the U.S. side, he had secured confirmation that “no additional tariffs exceeding last year’s agreement would be imposed,” and indicated his intention to continue close communication.<\/p>\n
Meanwhile, at a post-cabinet meeting press conference, Minister of State for Economic and Fiscal Policy Minoru Kiuchi prefaced his remarks by saying he was “aware of the reports” regarding the new U.S. tariffs on Japan, but merely stated that he would “thoroughly analyze and consider the impact on Japan’s economy.” When asked about market concerns regarding the “responsible active fiscal policy” advocated by the Sanae Takaichi administration, Kiuchi countered that the government is “scrutinizing the scale of fiscal measures possible while steadily reducing the government debt-to-GDP ratio, with consideration for maintaining market confidence,” emphasizing that “it is not a reckless fiscal policy.”<\/p>\n
Compound Risks Weigh on the Market<\/p>\n
In the current market, U.S. WTI crude oil futures have risen to the $91 per barrel level. Geopolitical risks in the Middle East have reignited after President Trump indicated he has no intention of dialogue with Iran for the time being and mentioned the possibility of intensifying attacks. Higher crude oil prices strengthen the outlook for prolonged inflation and the accompanying speculation of additional rate hikes by the U.S. Federal Reserve (FRB), creating a structure that weighs on highly valued growth stocks and semiconductor stocks.<\/p>\n
On the previous day, the 23rd, the Nikkei 225 rebounded, rising 307 points to 66,422, but this was merely a case of buying in high-priced semiconductor stocks like Advantest and SoftBank Group pushing up the index, and did not indicate an improvement in market conditions. The sharp decline on the 24th completely erased the previous day’s gains. With earnings announcements from major U.S. tech companies and domestic semiconductor firms concentrated next week, investors’ wait-and-see stance is expected to strengthen further.<\/p>\n","protected":false},"excerpt":{"rendered":"The Nikkei 225 saw a sharp sell-off on the morning of the 24th on the Tokyo Stock Exchange.…\n","protected":false},"author":2,"featured_media":63420,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[22096,16114,191,189,188,190,21080,41057,8639,5921,41056,14570,6851,2542,41055],"class_list":["post-63419","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-advantest","tag-disco","tag-economy","tag-economy-of-japan","tag-japans-economy","tag-japanese-economy","tag-kioxia-holdings","tag-marine-strategies","tag-minoru-kiuchi","tag-nikkei-225","tag-ryoji-akazawa","tag-softbank-group","tag-tokyo-electron","tag-trump-administration","tag-u-s-trade-representative-ustr"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/63419","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/comments?post=63419"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/63419\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media\/63420"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media?parent=63419"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/categories?post=63419"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/tags?post=63419"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}