US-China Trade tariff dispute trigger market instability in Japan

TOKYO: The ongoing US-China trade tariff dispute has sent shockwaves through Japanese markets, causing extreme instability and investor concerns.

On Friday, Tokyo’s Nikkei 225 index witnessed a substantial decline of up to 1,900 points, representing a 5.7% drop at one point during the trading session.

As the day progressed, some investors cautiously repurchased shares, resulting in partial recovery. Nevertheless, the index closed at 33,585 points, marking a drop of 1,023 points or 2.96% compared to its previous close.

This sharp decline stands in stark contrast to Thursday’s market rally, where the benchmark index surged 9.1%, its second-largest single-day gain in history.

The fluctuations underscore the dramatic week for Tokyo’s stock market as the repercussions of the US-China Trade tariff dispute ripple through the global economy.

Concerns over trade tariffs and their potential impact on American economic stability prompted investors to sell off shares and reduce dollar holdings, leading to a temporary strengthening of the Japanese yen. The yen surged to 142 against the dollar, reaching its highest value in nearly six months.

Analysts note that investor fears about the escalating US-China Trade tariff dispute between the two economic superpowers have fueled instability in major markets worldwide.

The Japanese market crisis is viewed as a direct result of uncertainties regarding potential global economic fallout.

The situation highlights the growing interconnectedness of economies and the vulnerability of markets to geopolitical disputes, particularly between leading global players such as the United States and China.

Read More: China hits back at US by increasing tariffs to 125pc

Earlier today, Beijing increased its tariffs on U.S. imports to 125%, hitting back against U.S. President Donald Trump’s decision to hike duties on Chinese goods to 145% and raising the stakes in a trade war that threatens to up-end global supply chains.

The economic upheaval caused by Trump’s tariffs continued to reverberate on Friday, with global markets experiencing significant declines.

Foreign leaders grappled with the challenge of addressing what is being described as one of the most profound disruptions to the international trade system in decades.