Japan’s stock market entered a bear market on Friday, falling 20.30% from its previous peak in July last year as Trump’s tariffs are in full-blast for the world’s fourth-largest economy.
The Nikkei 225 settled 2.75% lower on April 4, 2025, a day after digesting new reciprocal tariffs announced by the U.S. President Donald Trump, aiming to balance bilateral trade in a strange way.
Japan was slapped with 24% country-specific tariffs, which is on top of global baseline tariffs of 10%. Fears struck the capital market as a slowdown in global growth is evident and that could derail Japan’s economic recovery.
The banking stocks in Japan took a significant blow as the banking index was down more than 8%, fueling the accumulated loss this week to 20%. The share price of Japan’s largest financial firm Mitsubishi UFJ Financial Group, Inc. also dropped 8.48% on Friday.
After decades of low interest rates, the Bank of Japan finally raised interest rates for the first time last year. However, economists expect that Trump’s tariffs could delay the decision to raise rate, but not derail the idea.
