Nikkei 225 Index Plunges Amid Concerns Over Trump's Trade Policies
The Nikkei 225 index experienced a significant drop on November 26th, 2023, plummeting by over 700 points at one point. This decline was primarily driven by growing concerns surrounding U.S. President-elect Donald Trump's protectionist trade policies.
The benchmark index ultimately closed the day at 38,442.00, representing a decrease of 338.14 points, or 0.87 percent, compared to the previous day's closing value.
The market sell-off was triggered by social media posts made by Trump earlier that day. In these posts, he threatened to impose new tariffs on China (10%), Canada (25%), and Mexico (25%) following his inauguration in January.
The Tokyo Stock Exchange opened significantly lower, with selling pressure evident across a wide range of sectors. Semiconductor-related stocks, such as Advantest Corp. and Tokyo Electron Ltd., which hold considerable weight within the Nikkei index, were among the most heavily impacted.
Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., suggested that the market's reaction to Trump's posts was relatively subdued due to investors becoming accustomed to his negotiating tactics. Ichikawa further stated that any future volatility stemming from Trump's policies would likely remain within a predictable range, as investors have already witnessed similar episodes in the past.