Tokyo stocks drop on concern over possible US tariff hike on Japan
The 225-issue Nikkei Stock Average ended down 223.85 points, or 0.56 percent, from Tuesday at 39,762.48. The broader Topix index finished 6.03 points, or 0.21 percent, lower at 2,826.04.
On the top-tier Prime Market, decliners were led by machinery, nonferrous metal and precision instrument issues.
The U.S. dollar briefly strengthened to the 144 yen line in Tokyo amid easing speculation that the U.S. Federal Reserve will cut interest rates soon following stronger-than-expected job openings data, dealers said.
At 5 p.m., the dollar fetched 143.89-91 yen compared with 143.37-47 yen in New York and 143.07-09 yen in Tokyo at 5 p.m. Tuesday.
The euro was quoted at $1.1773-1774 and 169.41-45 yen against $1.1802-1812 and 169.25-35 yen in New York and $1.1783-1785 and 168.59-63 yen in Tokyo late Tuesday afternoon.
The yield on the benchmark 10-year Japanese government bond ended at 1.425 percent, up 0.015 percentage point from Tuesday's close, as the debt was sold following a rise in U.S. Treasury yields, with investors adjusting their positions.
On the stock market, investors grew cautious about an economic slowdown in Japan after Trump threatened to hike tariffs as high as 30 percent to 35 percent. Under his so-called reciprocal tariffs, Japan is currently facing an additional levy of 14 percent, for a total rate of 24 percent.
"If the tariff rate is raised to the 30 percent level, it would affect Japanese companies negatively as well as the economy," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
The market was also dragged down by worries that U.S.-Japan tariff negotiations could be prolonged after Trump cast doubt on the prospects of a deal, brokers said.
The Nikkei index briefly lost over 500 points on selling of heavyweight semiconductor shares, but some losses were later erased by gains in some export-linked auto issues on a weaker yen, which increases exporters' overseas profits when repatriated.
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