Nikkei 225 Enters Correction as Trump’s Tariffs Lead to Widespread Sell-Off in Asia
Asian markets experienced significant declines on Monday as concerns over a fresh round of tariffs from US President Donald Trump triggered a broad-based sell-off, with Japan’s Nikkei 225 falling into correction territory.
The Nikkei 225 dropped 4.05% to close at 35,617.56, marking a nearly 12% decline from its December peak and its lowest level in more than six months. The broader Topix index also fell by 3.57%, closing at 2,658.73.
The sell-off was not limited to Japan. South Korea’s Kospi index ended the day 3% lower at 2,481.12, while the smaller Kosdaq index fell 3.01% to 672.85. In Australia, the S&P/ASX 200 closed 1.74% down at 7,843.40 ahead of the Reserve Bank of Australia’s policy meeting on Tuesday.
Chinese markets fared somewhat better, with the CSI 300 index slipping by 0.71% to 3,887.31, while Hong Kong’s Hang Seng Index dropped 1.09%.
In Japan, the Nikkei’s sharp fall was driven by declines in major technology and semiconductor stocks. Renesas Electronics saw a significant 10.97% drop, while other firms such as Socionext Inc. and Disco Corp also saw heavy losses. Automakers, including Nissan and Toyota, also experienced significant drops, fueled by fears of US tariffs on imported cars.
The sharp declines come as President Trump prepares to implement new tariffs later this week. On Sunday, he reiterated plans to impose tariffs on “all countries,” stoking fears of a trade war and fueling uncertainty in the global economy. Trump’s statements have led to volatility in markets as investors await clarity on the exact scope of the tariffs, which are expected to be unveiled by Wednesday.
Trump’s trade policies have particularly impacted East Asian economies, including Japan and South Korea, which have large trade surpluses with the US The uncertainty surrounding these tariffs has sparked widespread concerns of higher costs for manufacturers and consumers, potentially harming the global economy.
Gold, often seen as a safe-haven asset during periods of market turbulence, rose to a new record high of $3,125.91 an ounce as investors sought protection from the market turmoil.
