Latest news with #MasahiroIchikawa
Japan Times
15-07-2025
- Automotive
- Japan Times
Tokyo stocks hit by a perfect storm of tariffs, politics and budget worries
Japanese stocks have been stuck trading below their peak for more than a year, hit by the trade war, then by political instability and increasingly by fiscal concerns. The Nikkei 225 index is down 3.87% on year, and off by more than 6% from its record of 42,426.77 reached on July 11, 2024. This comes as indexes globally are rallying, with the Standard and Poor's 500 and the Nasdaq Composite indexes in the U.S., Germany's DAX and South Korea's Kospi all at or near records. Bonds in Japan are also faring poorly, hit by a rout in late March and early April as the reality of U.S. President Donald Trump's tariffs started to hit home. They retreated again this week ahead of Upper House elections scheduled for July 20. "It seems there's still significant uncertainty surrounding the tariffs,' said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. Earnings season in particular is weighing on sentiment, as the effects of the trade war might start to show up in results. Sales might drop for some companies due to higher U.S. duties, while profits might fall at companies that chose to cut prices to maintain sales. Most Japanese goods bound for the United States are subject to 10% tariffs, while cars are charged 25% and steel and aluminum 50%. Japan and the United States have made no significant progress in tariff negotiations despite months of dialogue. Talks have been on the verge of breaking down at some points, adding to the confusion. 'The tariffs on automobiles, a core industry to the Japanese economy, have led to the underperformance of the auto sector," Ichikawa added. Toyota shares are down 22.55% over the past year, while Honda is off 10.50%. Eiji Sato, portfolio manager at Nakano Asset Management, said that investors want to confirm that companies are still growing and increasing profits before jumping heavily into stocks again. 'With the earnings season approaching, it seems a wait-and-see stance is spreading,' he said. Politics are weighing especially heavily on the markets. Some polls indicate that the Liberal Democratic Party-Komeito coalition could lose its majority in the upper chamber of parliament this weekend. The coalition failed to win a majority in the Lower House election last October. If they become a minority government, instability could follow. A scramble to pull together a workable coalition might result in a period of policy uncertainty, while negotiations with the United States over tariffs could stall completely if there's a leadership vacuum. Prime Minister Shigeru Ishiba might step down. If opposition parties gain more power after the election, the government will be under intense pressure to introduce a number of expensive policies. These include cutting the consumption tax — currently set at 10% for most products and 8% for food items — to help households make ends meet. The possibility of measures like this have increased concerns about Japan's fiscal health. 'If the scenario were to take a turn to the downside, I believe Japanese stocks would likely be forced into a correction phase after the election,' Sato said. The bond market has been rattled ahead of a possible shift to looser fiscal policy. The 30-year Japanese government bond yield surged to a record 3.2% on Tuesday, while the 20-year yield jumped to 2.65%, its highest level since November 1999. The benchmark 10-year yield climbed to a 17-year high of 1.595%. Bond prices move inversely to yields. Analysts said that stocks aren't likely to start rising again until the fall. Since tariffs will eventually drag down the U.S. economy, economic indicators will likely show signs of a slowdown after the summer, Ichikawa said. If that happens, calls for rate cuts by the U.S. Federal Reserve are expected to grow, and rate-cut expectations will strengthen the view that the economy will recover next year, which could help stock performance, he said. Sato also pointed out that once uncertainties over the Japanese political situation and the U.S. tariffs clear after the summer, Japanese stocks could enter another upward phase. He added that a number of Japanese companies are tackling corporate reforms to improve stock value. 'We interview a lot of companies every quarter and are really seeing changes within their businesses. Thus, we have high expectations for them,' he said.
The Mainichi
17-06-2025
- Business
- The Mainichi
Tokyo stocks rise on easing concerns over Israel-Iran conflict
TOKYO (Kyodo) -- Tokyo stocks climbed Tuesday, with the Nikkei index ending at a four-month high, on hopes tensions in the Middle East will ease after Iran was reportedly seeking a cease-fire with Israel. The 225-issue Nikkei Stock Average ended up 225.41 points, or 0.59 percent, from Monday at 38,536.74, its highest level since Feb. 21. The broader Topix index finished 9.82 points, or 0.35 percent, higher at 2,786.95. On the top-tier Prime Market, gainers were led by nonferrous metal, glass and ceramics product and real estate issues. The U.S. dollar briefly rose to the lower 145 yen range in Tokyo, as the yen, seen as a safe-haven asset, was sold amid hopes for an easing of the Israel-Iran conflict following a report that Teheran sent a message to the United States and Israel seeking to end hostilities. The currency market was not much affected by the Bank of Japan decision Tuesday to slow down the pace of reducing its government bond purchases, as the measure landed within market expectations, dealers said. Stocks gained for a second straight day after Wall Street advanced overnight as oil prices dropped following recent surges due to the conflict between the two Middle East countries. "The Nikkei's rise on Monday possibly reflected hopes of a near-term end to the conflict, with the latest news backing such a view supporting the market today," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co. However, gains were limited as Japan-U.S. tariff negotiations appeared to stall after their leaders failed to reach a deal over steep levies at their summit, brokers said. "While the outcome came mostly within expectations, it gave the impression that reaching an agreement would be much more difficult than initially thought," Ichikawa said.
The Mainichi
13-06-2025
- Business
- The Mainichi
Tokyo stocks fall as Israel attack on Iran stirs risk-averse mood
TOKYO (Kyodo) -- Tokyo stocks fell Friday as investors moved to avert risks amid escalating tensions in the Middle East after the Israeli military attacked Iranian nuclear and military sites. The 225-issue Nikkei Stock Average ended down 338.84 points, or 0.89 percent, from Thursday at 37,834.25. The broader Topix index finished 26.50 points, or 0.95 percent, lower at 2,756.47. On the top-tier Prime Market, decliners were led by marine transportation, textile and apparel, and service issues. The U.S. dollar briefly sank to the upper 142 yen range in Tokyo on growing speculation about a possible interest rate cut by the Federal Reserve after U.S. inflation-related data came in weaker than expected. The U.S. currency later rebounded to the upper 143 yen level as the yen and dollar both attracted buying, with investors fleeing to assets that are seen as safe at times of emergency, dealers said. On the bond market, the yield on the benchmark 10-year Japanese government bond briefly fell to 1.385 percent, its lowest in about a month, as investors shifted away from riskier assets. The Nikkei stock index briefly lost more than 600 points, as Israel's attack on Iran fueled concern about higher crude oil prices and their impact on Japan's mainstay manufacturing industries, which are reliant on imported oil, brokers said. Air and land transportation issues were notably sold as surging oil prices raised fears about higher fuel costs. Shares of chemical companies that use crude oil to manufacture products also plunged. Automakers were also sold after U.S. President Donald Trump said Thursday he may increase his 25 percent tariff on automobiles made outside the United States "in the not-too-distant future" in a bid to attract more investment in American manufacturing. The market later pared some losses as investors waited for further developments in the Middle East, with the focus on whether the sixth round of negotiations between the United States and Iran over Teheran's nuclear program will be held this weekend. Investors were also paying attention to what steps the United States would take to resolve the situation, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
The Mainichi
04-06-2025
- Business
- The Mainichi
Nikkei snaps 3-day losses as chip shares sought on firm AI demand
TOKYO (Kyodo) -- Tokyo stocks rose Wednesday with the Nikkei index snapping a three-day losing streak, as semiconductor-related shares were sought on expectations for continued growth in demand for artificial intelligence. The 225-issue Nikkei Stock Average ended up 300.64 points, or 0.80 percent, from Tuesday at 37,747.45. The broader Topix index finished 14.02 points, or 0.51 percent, higher at 2,785.13. On the top-tier Prime Market, gainers were led by pulp and paper, oil and coal product and securities house issues. In the foreign exchange market, the U.S. dollar briefly strengthened to the lower 144 yen range in Tokyo, lifted by receding concern over a U.S. economic slowdown following stronger-than-expected job openings data, dealers said. Heavyweight chip shares tracked overnight gains by their U.S. counterparts after U.S. technology giant Meta Platforms Inc. announced it signed a deal to secure electricity from a nuclear plant to meet growing power demand from AI and data centers, brokers said. "Firm AI demand is one of the factors needed for a stock market recovery, and hopes for a reviewing of U.S. export curbs on chips to China would grow if tensions between the two largest economies recede," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co. "The outlook for U.S.-China relations is a significant factor for semiconductors," Ichikawa added. The yen's depreciation also helped lift some export-oriented auto and machinery issues as the weaker yen increases exporters' overseas profits when repatriated. Market sentiment was supported by hopes for progress in U.S.-China tariff negotiations with the two leaders expected to talk soon, while the doubling of U.S. tariffs on steel and aluminum imports to 50 percent, which took effect Wednesday, had little impact on the market, brokers said.
Economic Times
28-05-2025
- Automotive
- Economic Times
Nikkei sheds early gains as mood turns cautious ahead of Nvidia earnings
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Japan's Nikkei share average shed early gains of as much as 1.2% to end flat on Wednesday, as the mood turned cautious ahead of earnings from artificial intelligence chip leader Nvidia later in the Nikkei ended the day down 1.71 point at 37,722.40, effectively unchanged but snapping a three-day broader Topix also finished essentially flat but up 0.02 point at 2, stocks were initially buoyed by a sharply weaker yen, which boosts the value of overseas revenues for the country's many heavyweight a poor auction of super-long Japanese government bonds also saw yields pushing higher again, weighing on Nikkei particularly struggled above the key psychological level of 38,000, after pushing as high as 38,178.73 in morning additional push is needed to take the Nikkei firmly above 38,000, such as further positive developments in U.S. tariff negotiations, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset a weaker yen supports sentiment, "one can't say the foreign-exchange market has stabilized", he the more cautious finish to the session, chip-testing equipment maker and Nvidia supplier Advantest remained the Nikkei's biggest gainer in index-point terms through to the close, ending with a 1.6% contrast, chip-making machinery manufacturer Tokyo Electron flipped from early gains to finish down 0.1%.Automakers as a group had been strong in early trading but ended the day mixed. Honda climbed 1.3%, but Toyota reversed gains to drop 0.3%.Nissan was among the most volatile stocks on the day, leaping as much as 4.6% at the start of the afternoon session following a media report that it plans more than $7 billion in fundraising to help turn the business around. However, it shed those gains to end the day down 0.3%.
