Nikkei 225 and Topix Slide Amid Trade‑War Fears
The nikkei opened Monday in freefall, plunging more than 8% just after the opening bell as President Trump’s aggressive tariff regime and China’s forceful retaliation deepened a worldwide stocks rout. Japan’s benchmark Nikkei 225 futures led the decline, dragging the broader Topix index down over 6.5% even after a partial recovery. The sharp losses in the japan stock market reflect mounting fears that the tit‑for‑tat tariffs will tip the global economy into recession.
Circuit Breakers Snap Across Asian Stock Market
Across Asia, investors witnessed unprecedented market halts as panic selling triggered multiple stock market circuit breaker mechanisms:
- Hong Kong’s Hang Seng index opened more than 9% lower, with tech giants Alibaba and Tencent plunging 14% and 10%, respectively.
- South Korea’s Kospi tumbled over 4.8% and briefly halted trading for five minutes when its circuit breaker kicked in.
- Taiwan’s Taiex plunged 9.7%, activating several circuit breaker stock market pauses as heavyweight exporters TSMC and Foxconn each fell about 10%.
These halts underscore the severity of the sell‑off, with asian markets tracking the worst two‑day stretch for Wall Street in five years.
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Global Markets Join the Nikkei Rout
Monday’s rout in the asian stock market followed a staggering $5.4 trillion loss in US equity value over two sessions. Dow futures sank 1,250 points (3.3%), S&P 500 futures fell 3.7%, and Nasdaq futures tumbled 4.6%, setting the tone for a sharply lower open on Wall Street.
In mainland China—reopening after a holiday—the Shanghai Composite Index dropped 6.7%, and the blue‑chip CSI300 fell 7.5%. The severity of the sell‑off was amplified by China’s 34% tariff on all US goods, a more sweeping retaliation than in previous rounds of the trade war.
📢 “Faced with America’s reckless tariff punches, we know exactly what we’re dealing with, and we have plenty of countermeasures at hand,” declared the People’s Daily, Beijing’s official mouthpiece.
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Commodities and Safe Havens Under Pressure
The sell‑off extended beyond equities, as commodities and traditional safe havens also suffered:
- Oil prices slid sharply: Brent futures dropped 2.4%, while US West Texas Intermediate futures fell 2.5%, dipping below $60 a barrel for the first time since April 2021.
- Gold, often a refuge in turbulent times, tumbled over 4% to around $3,030 an ounce.
Falling fuel and metal prices reflect investors’ growing fears that tariffs will curb global demand for travel, shipping and industrial activity.
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Political Reactions and Future Outlook
Despite the turmoil, President Trump shrugged off concerns aboard Air Force One, stating he “didn’t intentionally crash markets” and declining to predict future trading. He reiterated his willingness to negotiate with China—“but they have to solve their surplus”—and signaled similar discussions with the European Union.
Meanwhile, regional leaders pressed for relief:
- Japanese Prime Minister Shigeru Ishiba appealed in parliament for reduced US tariffs, as a 24% across‑the‑board levy on Japanese imports is set to take effect this week.
- Taiwan’s President Lai Ching‑te vowed to negotiate tariff relief with Washington, increase US purchases to narrow the trade deficit, and highlighted Taiwan’s economic contributions to the US.
Economists at Barclays warned that growth forecasts for Asia would be trimmed further if tariff tensions persist. Ronald Temple, chief market strategist at Lazard, predicted “broad‑based retaliation from other countries in the weeks and months ahead,” suggesting that the global market rout may have further to run.
Final Thoughts
The nikkei index’s steep decline and the spate of circuit breaker halts across asian markets highlight the fragility of global equities amid escalating trade hostilities. As nikkei futures, Topix futures, and other regional benchmarks reel, investors will be watching for any sign of de‑escalation—or further downside—in the world’s interconnected markets.
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