Japan’s financial markets took a severe hit on Monday as the Nikkei share average tumbled nearly 9% early in the trading session, reflecting growing concerns over a tariff-induced global recession.
The index dropped as much as 8.8% to 30,792.74, its lowest level since October 2023, and was trading down 7.3% at 31,318.79 as of 0034 GMT, according to Reuters.
All 225 component stocks of the index were in the red, signaling widespread panic.
The broader Topix sank 8% to 2,284.69, while a Topix index of banking shares slumped as much as 17.3%, later easing to a 13.2% decline.
The banking sector has been hit hardest, plummeting up to 30% over the past three sessions, underscoring the severity of the sell-off in Japanese equities.
Global trade tensions escalate with retaliatory tariffs
The turmoil extends beyond Japan, with Asian markets slumping as fears of a global trade war intensify.
China’s base metal prices tumbled on Monday, with copper prices sliding to a more than three-month low.
The most-traded copper contract on the Shanghai Futures Exchange dropped 7% to 73,640 yuan per metric ton as of 0138 GMT, while the London Metal Exchange’s benchmark three-month copper fell 1.9% to $8,614.5 per metric ton.
China retaliated on Friday by imposing a 34% tariff on all US goods, effective April 10, following Trump’s 34% tariff on most Chinese goods.
Other metals, including aluminium, zinc, lead, nickel, and tin, also saw significant declines on both exchanges, with traders citing worries over a trade war impeding global economic growth.
Countries are scrambling to respond to the tariff regime.
Taiwan’s president, Lai Ching-te, offered zero tariffs as a negotiation basis on Sunday, pledging to remove trade barriers and boost US investments.
Israel’s Prime Minister Benjamin Netanyahu plans to seek relief from a 17% tariff during a Monday meeting with Trump.
An Indian government official indicated no immediate retaliation to a 26% tariff, with talks underway for a potential deal.
In Italy, Prime Minister Giorgia Meloni, a Trump ally, promised to shield businesses hit by a planned 20% tariff on European Union goods, though Italian wine producers at a Verona fair reported slowed business and feared lasting damage.
Indian markets brace for sharp decline
India’s financial markets are also feeling the strain, with the benchmark Nifty 50 poised to open sharply lower on Monday.
GIFT Nifty futures were trading at 22,089 as of 7:55 am IST, suggesting a 3.6% drop from Friday’s close of 22,904.45.
Abhishek Goenka, chief executive officer of India Forex and Asset Management, warned that recent lows around 21,800 may be re-tested, citing tariff-related uncertainty.
The Nifty 50 has already fallen about 13% from its late September record high, driven by slowing earnings, growth concerns, and a $27-billion foreign exodus.
India’s central bank is widely expected to cut rates by 25 basis points, anticipating a more supportive monetary policy as tariffs threaten economic stability.
A finance ministry official noted that India’s projected 6.3-6.8% growth for fiscal year 2025-26 remains achievable if oil prices stay below $70 a barrel despite global disruptions.
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