Japan’s Nikkei index rebounded 6.5% amid bargain buying after hitting a 1.5-year low.
- Optimism over easing U.S. tariffs and Wall Street cues drove the market rally.
- Gains were broad-based, led by chipmakers, banks, and insurers.
- PM Shigeru Ishiba expressed concerns over U.S. tariffs in a recent call with Trump.
Nikkei Posts Strongest Single-Day Rally in Months on Hopes of Tariff Talks, Wall Street Recovery
Japan’s benchmark Nikkei 225 index jumped 6.5% on Tuesday, closing at 33,161.72, in a powerful rebound driven by investor optimism and signs of stabilization in U.S. markets. The broader Topix index also surged 6.8% to finish at 2,444.44.
The rally comes after both indices plunged to 18-month lows in the previous session amid rising fears of a global trade war sparked by U.S. President Donald Trump’s tariff policies. Investors were encouraged by gains in U.S. stock futures and expectations that Japan might negotiate an exemption or relief from the recently announced reciprocal tariffs.
“Investors bought back stocks as they believed prices were oversold,” said Takamasa Ikeda, senior portfolio manager at GCI Asset Management. “With U.S. stock futures up in Tokyo trading, sentiment improved sharply.”
While the S&P 500 and Dow Jones ended Monday in the red, the Nasdaq eked out minor gains. More notably, the U.S. semiconductor index rose 2.7% overnight, and futures for both the S&P and Nasdaq advanced more than 1% during Asian hours — signaling early signs of a global market rebound.
Japanese equities, particularly exporters, have been under pressure since Trump’s Liberation Day tariff announcement. The Nikkei and Topix have fallen about 13% from their pre-announcement levels. Prime Minister Shigeru Ishiba spoke with President Trump on Monday, expressing Japan’s deep concerns over the tariffs and urging a policy rethink.
Investor optimism was also fueled by hopes that the U.S. and Japan could resolve trade tensions diplomatically. “There’s growing belief that Japan might be able to negotiate relief, and that’s giving the market a boost,” Ikeda added.
Top Performing Stocks and Sectors:
- Tokyo Electron rose 8.6%, while Advantest, a major chip-testing firm, surged 11.6%, reflecting strength in the tech sector.
- Fujikura, a key player in data center infrastructure, rocketed 19%, topping the Nikkei’s gainers list.
- Banking stocks rallied on expectations of market stabilization and policy support: Mitsubishi UFJ gained 12.3% and Mizuho Financial advanced 14%.
- All 33 industry sub-indexes on the Tokyo Stock Exchange ended in positive territory. The insurance sector led with a 12.5% gain, while banking stocks rose 11.6%.
The broad-based recovery suggests investors are regaining confidence in Japanese equities, though much hinges on the outcome of trade negotiations and global macroeconomic signals.
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