Tokyo stocks fall as firmer yen hits exporters, gains locked in
The 225-issue Nikkei Stock Average ended down 174.92 points, or 0.44 percent, from Wednesday at 39,646.36. The broader Topix index finished 15.82 points, or 0.56 percent, lower at 2,812.34.
On the top-tier Prime Market, decliners were led by electric power and gas, oil and coal product and marine transportation issues.
The U.S. dollar briefly weakened to the upper 145 yen range in Tokyo as U.S. Treasury yields fell after President Donald Trump again called on the Federal Reserve to cut interest rates, arguing the current benchmark rate is too high, dealers said.
Stocks were weighed down by export-oriented auto and electronics issues due to a firmer yen, which decreases overseas profits of exporters when repatriated.
Investors also sold shares as the Nikkei index climbed close to the 40,000 line over the past two days after Trump announced to impose a 25 percent tariff on imports from Japan, while setting an extended negotiation deadline of Aug. 1.
"The market was pressured by shares that had advanced notably as the Nikkei approached the 40,000 mark, rather than by selling on concern about U.S. tariff policy," said Maki Sawada, a strategist at the Investment Content Department of Nomura Securities Co.
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The Mainichi
37 minutes ago
- The Mainichi
PM warns Japan should not be underestimated, stoking tariff concern
TOKYO (Kyodo) -- Prime Minister Shigeru Ishiba's recent remark that Japan should not be "underestimated" by the United States is raising concerns among politicians and government officials at home about potential adverse effects on ongoing tariff negotiations. The comment, made during a stump speech for the July 20 House of Councillors election, is widely seen as an effort by Ishiba to emphasize his commitment to protecting national interests, with an eye toward his domestic audience and supporters of the Liberal Democratic Party. Still, it is unusual for a sitting Japanese prime minister to use such strong language toward the United States, a longtime security ally. Japan was among the first countries to begin bilateral negotiations with the United States over President Donald Trump's tariff policy. Trump announced earlier this week that he will impose a 25 percent tariff on Japan starting Aug. 1. "It's a battle where our national interests are at stake. Do not underestimate us. Even if it is an ally that we are negotiating with, we must say (what needs to be said) without hesitation," Ishiba said in front of supporters and others in Chiba Prefecture, near Tokyo, on Wednesday. "We will protect what must be protected." Despite multiple rounds of ministerial talks and a face-to-face summit between Ishiba and Trump, Japan has yet to bridge differences with the United States, a key trading partner. Following Trump's announcement of a 25 percent tariff, Ishiba said Tuesday that his government will step up negotiations to reach a mutually beneficial deal by Aug. 1, the extended deadline. Ishiba's comment prompted an immediate reaction from opposition lawmakers, who have largely been taking a wait-and-see stance on how the government will engage in the bilateral tariff talks. "Even as a campaign strategy, using such strong words in the absence of the negotiating partner will be negative if Japan wants to advance negotiations smoothly. The comment will rather undermine our national interests," Yuichiro Tamaki, who heads the Democratic Party for the People, a small opposition force, told reporters. A source close to the Ishiba government said, the prime minister's remark "must have complicated the situation for the negotiators." Chief negotiator Ryosei Akazawa, a close aide to Ishiba, has said he will accelerate talks with the United States toward reaching a "package" deal. Since the start of the negotiations, Japan has emphasized its contributions to the United States as an ally, highlighting investments by Japanese firms that have helped create jobs in the world's largest economy. But Trump, who sees the imposition of tariffs as an effective way to reduce his country's massive trade deficit with Japan, has appeared unfazed. He has taken issue with how Japan is not importing enough U.S. cars or rice, and claims that bilateral trade is not reciprocal. After his remark stirred reactions, Ishiba said on a TV program Thursday that he used the language to convey that Japan should step up efforts to reduce its dependence on the United States. "If their thinking is that we have to listen and follow what they say because we rely on them so much, we'd say, 'Don't look down on us,'" Ishiba said in reference to Japan's close security and economic ties. In addition to the proposed reciprocal tariff, a separate 25 percent import levy on Japanese cars is seen as a major stumbling block in the negotiations, given the importance of the auto sector in both countries. Automakers like Toyota Motor Corp. form the backbone of Japan's export-driven economy. Ahead of the upper house election, a must-win for Ishiba after losing majority control of the more powerful House of Representatives last October, he has repeatedly stressed that Japan will not make easy concessions. "It looks as if the comment has raised the bar (for bilateral negotiations)," Masahisa Sato, a senior lawmaker of Ishiba's LDP, who is a candidate seeking another term in the upper house, said in a social media post. "He should not have made such a comment during election campaigning," said Sato, who once served as a senior vice foreign minister.
Asahi Shimbun
2 hours ago
- Asahi Shimbun
Nissan, Honda eye tie-up in U.S. market due to Trump's tariffs
The logos of Nissan Motor Co. and Honda Motor Co. (Asahi Shimbun file photo) The high automobile tariffs imposed by the Trump administration have apparently brought two Japanese automakers back to the bargaining table. Nissan Motor Co. and Honda Motor Co. are considering a cooperative arrangement under which Nissan would produce pickup trucks for Honda at its underutilized U.S. plant, sources said. The two companies announced plans to merge last December, but those discussions were abruptly called off two months later, in large part because of Honda's proposal to make Nissan a subsidiary. The latest cooperative proposal is designed to augment weak points in each company. Honda does not have many pickup trucks in its U.S. sales lineup and Nissan's U.S. plants are operating at less than full capacity because of sluggish sales in North America. In May, Ivan Espinosa, Nissan's new president, said his company was exploring the feasibility of cooperation with Honda and Mitsubishi Motors Corp. as well as how to better utilize its U.S. plants. Nissan officials said on July 11 that they were still eyeing a cooperative relationship with Honda but refused to comment on speculation. Both Honda and Nissan have sharply downgraded their estimates for operating profits in the fiscal year ending March 2026, with Honda projecting a decline of 650 billion yen ($4.4 billion) while Nissan is estimating up to a 450-billion-yen decline. Increasing production in the United States would benefit both companies. Discussions between executives of the two companies apparently resumed after Espinosa took over. A source said both companies were facing difficulties not only due to the tariffs imposed by U.S. President Donald Trump but also a drop-off in sales of electric vehicles. (This article was written by Kenta Nakamura and Akihiro Nishiyama.)
Japan Times
3 hours ago
- Japan Times
As Trump sows tariff confusion, rules of global commerce give way to chaos
Six months into his new administration, U.S. President Donald Trump's assault on global trade has lost any semblance of organization or structure. He has changed deadlines suddenly. He has blown up negotiations at the eleventh hour, often raising unexpected issues. He has tied his tariffs to complaints that have nothing to do with trade, like Brazil's treatment of its former president, Jair Bolsonaro, or the flow of fentanyl from Canada. Talks with the United States were like "going through a labyrinth' and arriving "back to square one,' said Airlangga Hartarto, the Indonesian minister for economic affairs, who met with U.S. officials in Washington on Wednesday. The resulting uncertainty is preventing companies and countries from making plans as the rules of global commerce give way to a state of chaos. "We're still far away from making real deals,' said Carsten Brzeski, global head of macroeconomics at the bank ING in Germany. He called the uncertainty "poison' for the global economy. Gone is the idea that the White House would strike 90 deals in 90 days after a period of rapid-fire negotiation, as Trump pledged in April. Instead, Washington has signed bare-bone agreements with big trading partners including China, while sending many other countries blunt and mostly standardized letters announcing hefty tariffs to start Aug. 1. Policymakers in Indonesia, Japan and elsewhere learned about letters setting tariff rates only when Trump posted them on social media. Airlangga said he was "amazed and surprised' to find that his country would face a 32% tariff, unchanged from what was announced in April. Negotiations had been going well, he thought. Trading partners that have received such letters are now frantically pushing to reduce the country-specific rates, which range from 20% to 50%, though Trump has at some points suggested that room to negotiate may be limited. For those who have not yet received a letter — Trump suggested Thursday that the European Union's was coming imminently — the developments have underscored that any negotiations are precarious. Trade deals appear to hinge on one person, Trump, and even carefully constructed agreements can be upended on his whim. "People are dealing with it as a rolling damage-limitation exercise,' said Andrew Small, a senior fellow at the German Marshall Fund who worked until recently as an adviser at the EU's executive arm. Kush Desai, a White House spokesperson, said countries were continuing to eagerly offer concessions to maintain access to the U.S. economy. Trump had been clear that the United States, as the world's biggest and best consumer market, "holds the cards and leverage in negotiations,' he said. Yet even reaching a trade deal may not diminish uncertainty. Trump proclaimed on social media in July that he had made a trade agreement with Vietnam that would charge a 20% tariff on Vietnamese products, with a higher 40% tariff rate on some goods that have Chinese components in them. "In return, Vietnam will do something that they have never done before, give the United States of America TOTAL ACCESS to their Markets for Trade,' he said. But the countries never released a joint statement clarifying what they had agreed to. Three people familiar with the matter, who declined to be named to discuss sensitive conversations, said Vietnamese officials had not agreed to the tariffs that Trump announced, and that negotiations were ongoing. Two of the people said the countries had reached an understanding on trade, but when Trump spoke on the phone with Vietnamese General Secretary To Lam on July 2, he took it upon himself to renegotiate some of those terms, surprising officials on both sides. A White House official who declined to be named because he was not authorized to speak publicly about the matter said the Americans and Vietnamese had reached an agreement. But he declined to elaborate further. He said both sides were continuing to discuss details of the higher tariff rate for goods with Chinese components, and had agreed to negotiate them in more depth later. Trump's push to reorder the global trading system started in February, shortly after he took office. Since then, he has imposed tariffs on sectors including metals and cars, and on specific countries, including Canada and China. In early April, Trump announced across-the-board tariffs that applied in different amounts to different countries, calculated using a simple equation that relied in part on a nation's trade gap with the United States. After Trump unveiled the numbers on a poster in the Rose Garden of the White House, a rapid volley of negotiations kicked off. Trading partners began to flock to Washington to try to talk down their rates while securing carve-outs for sectors. Within a few days, Trump partially suspended the across-the-board tariffs until July 9 to allow for three frenzied months of deal-making. The United States announced a framework agreement with Britain in May, and a handshake with Vietnam last week that now appears to be in flux, but most countries have not made a deal yet. Trump sent out nearly two dozen letters this week telling trading partners they would be subjected to hefty tariff rates, though the date when they start to bite has been pushed back to Aug. 1. And even those who thought that they might be close to an agreement might watch those careful negotiations implode. Take the EU, which is by some measures the United States' single most important trading partner. The 27-nation bloc has been working toward an agreement that would likely include a 10% baseline tariff, with exemptions for key goods. In return, the bloc would pledge to buy more from and invest more in the United States. But EU officials have long been unwilling to say they think a deal is likely. Even before Trump announced in an interview with NBC on Thursday that the bloc would soon receive a letter of its own, European policymakers remained painfully aware that the situation could detonate. That's partly because of the cautionary tale of Canada. Negotiations there were disrupted for a dramatic 48 hours in late June over the country's digital-services tax, which would have applied to large U.S. tech companies. Trump said he wouldn't continue negotiating if the tax remained in effect, and Canada's government quickly dropped it. Canada had then been negotiating toward an agreement by a July 21 deadline when on Thursday, it, too, received a letter announcing a 35% tariff and a new deadline of Aug. 1. Nor has Canada been the only last-minute surprise. The United States lurched into a sudden trade war with Brazil on Wednesday after Trump announced in a letter to President Luiz Inácio Lula da Silva of Brazil that 50% tariffs would take effect Aug. 1. "The way that Brazil has treated former President Bolsonaro, a Highly Respected Leader throughout the World during his Term, including by the United States, is an international disgrace,' Trump wrote. A few hours later, Lula said Brazil would reciprocate against the tariffs. "Brazil is a sovereign country with independent institutions that will not accept being abused by anyone,' he said in a statement. Thai officials also received a letter from Trump, but they emphasized reasons for hope. Pichai Chunhavajira, the finance minister, said Tuesday that Trump must not yet have taken into account a revised proposal to increase bilateral trade when he sent a letter setting the tariff at 36%, unchanged from April. "It is a template, everyone gets the same letter and the same text applies for every country,' said Supavud Saicheua, who is an adviser to Pichai. Thai negotiators are still unclear about what Trump wants, Supavud added. The 36% tariff "was calculated by some math that we have never heard of before,' he said. Even countries that hope they are in a solid negotiating position face uncertainty. While Indian officials have been emphasizing Trump's warm relations with Prime Minister Narendra Modi, the United States has made tariff announcements over the past week that threaten to rock India's economy. Trump said at a meeting in the White House this week that, after a year, imports of all pharmaceutical products would be "tariffed at a very, very high rate, like 200%.' That would be crushing for India, where pharmaceutical exports earned almost $30 billion last year, with the United States its biggest market by far. U.S. trading partners have seen that there are no guarantees, except that further trade whiplash probably lies ahead. "We understand that the decision is on the POTUS,' Airlangga said, using the acronym for the president of the United States. This article originally appeared in The New York Times © 2025 The New York Times Company
