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Japanese Stocks Dip Amid U.S.-China Tariff Tensions; Nikkei Index Sees Mixed Results

Japanese Stocks Experience Gains Erosion Amid U.S.-China Trade Tensions

Japanese stocks observed a reduction in gains as the trading session concluded on Tuesday. This shift was primarily influenced by the newly imposed 10 percent customs duties by the United States on certain goods from China, which took effect at 0501 GMT today. In response, China swiftly reciprocated with tariffs on selected American imports, escalating the ongoing trade tensions between the two major economies.

During the session, the Nikkei index initially rose by 1.8 percent, as investors showed renewed interest in purchasing shares following President Donald Trump’s decision to suspend threatened tariffs on Mexico and Canada. Despite this positive momentum, the Nikkei index eventually closed down by 0.7 percent, settling at 38,798.37 points. The broader TOPIX index mirrored this trend, also closing down by 0.7 percent at 2,738.02 points.

The suspension of tariffs on Canada and Mexico will remain in place for 30 days to allow for further negotiations, easing some of the apprehensions that had disturbed global markets the previous day. According to analysts at Nomura Strategic Securities, the market continues to grapple with the implications of these tariffs, highlighting that while the U.S. may have limited benefits from imposing duties on Canada and Mexico, the dynamics differ significantly regarding its economic rival, China.

In sector-specific developments, shares of Japanese automotive manufacturers saw a rebound after a decline in the previous session, as investors reassessed the potential impact of the new tariffs on auto production in Mexico, where numerous automotive factories are located. The automobile sub-index surged by 1.4 percent, positioning it among the day’s top performers, with Toyota Motor shares climbing by 1.7 percent.

Noteworthy movements in individual stocks included a significant rise in Kyocera Corporation’s shares by 7.3 percent and Murata Manufacturing Company’s shares, which increased by 5.6 percent. Conversely, Mitsubishi Motors experienced a sharp decline, with shares plunging by 14.7 percent.

Investors and analysts remain focused on the evolving trade landscape as it continues to shape market dynamics both domestically and globally.

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