Nikkei hits 3-1/2-month low as carmakers plunge on Trump's Mexico tariff jolt
The Nikkei share average ended 1.6 per cent lower to 20,601.19.
TOKYO: Japan's Nikkei tumbled to a 3-1/2-month low, led by a plunge in carmakers after US President Donald Trump said the United States would impose a new tariff on all imports from Mexico next month until illegal immigration is stopped.
The Nikkei share average ended 1.6 per cent lower to 20,601.19, the weakest closing price since February 8.
For the week, it dropped 2.4 per cent to post a fourth straight day of losses, and is off 7.4 per cent for the month for its the biggest monthly drop since last December.
The transport equipment sector tumbled 3.2 per cent and was the second worst sectoral performer on the board. Mazda Motor Corp dived 7.1 per cent, Toyota Motor Co shed 2.9 per cent, Nissan Motor Co slumped 5.3 per cent and Honda Motor Co declined 4.3 per cent.
Trump said on Thursday the US will impose a 5 per cent tariff on all goods coming from Mexico starting on June 10 until illegal immigration across the southern border is stopped.
"The tariff will gradually increase until the Illegal Immigration problem is remedied, at which time the tariffs will be removed," Trump said on Twitter.
In a statement issued by the White House, Trump said the tariff would increase to 10 per cent on July 1, 15 per cent on Aug. 1, 20 per cent on Sept. 1 and to 25 per cent on Oct. 1.
"It doesn't look like there are prospects of resolving the immigration issue by the deadline. Although the specific impact on the Japanese auto industry is unclear at this point, investors are growing increasingly worried about a negative effect on auto sales," said Yoshinori Shigemi, a global market strategist at JPMorgan Asset Management.
"The immigration issue itself is contained between the US and Mexico, but Trump's latest move reminded investors about his hardline stance on trade issues so the market is cautious about a trade deal between the US and Japan as well."
Trump had indicated during his Japan trip this week that there will be trade announcements between the two sides "probably in August," and that the trade gap between the two countries could be "straightened out rapidly."
Bucking the weak trend, Japan Display Inc jumped 21 per cent after news it secured a financial aid from a Chinese-Taiwanese consortium in June.
Ono Pharmaceutical rallied 3.1 per cent after the company said it will buy back up to 2.92 per cent of its own shares, worth up to 30 billion yen.
The broader Topix index declined 1.3 per cent to 1,512.28, with all but one of its 33 subsectors in the red.
The Nikkei share average ended 1.6 per cent lower to 20,601.19, the weakest closing price since February 8.
For the week, it dropped 2.4 per cent to post a fourth straight day of losses, and is off 7.4 per cent for the month for its the biggest monthly drop since last December.
The transport equipment sector tumbled 3.2 per cent and was the second worst sectoral performer on the board. Mazda Motor Corp dived 7.1 per cent, Toyota Motor Co shed 2.9 per cent, Nissan Motor Co slumped 5.3 per cent and Honda Motor Co declined 4.3 per cent.
Trump said on Thursday the US will impose a 5 per cent tariff on all goods coming from Mexico starting on June 10 until illegal immigration across the southern border is stopped.
"The tariff will gradually increase until the Illegal Immigration problem is remedied, at which time the tariffs will be removed," Trump said on Twitter.
In a statement issued by the White House, Trump said the tariff would increase to 10 per cent on July 1, 15 per cent on Aug. 1, 20 per cent on Sept. 1 and to 25 per cent on Oct. 1.
"It doesn't look like there are prospects of resolving the immigration issue by the deadline. Although the specific impact on the Japanese auto industry is unclear at this point, investors are growing increasingly worried about a negative effect on auto sales," said Yoshinori Shigemi, a global market strategist at JPMorgan Asset Management.
"The immigration issue itself is contained between the US and Mexico, but Trump's latest move reminded investors about his hardline stance on trade issues so the market is cautious about a trade deal between the US and Japan as well."
Trump had indicated during his Japan trip this week that there will be trade announcements between the two sides "probably in August," and that the trade gap between the two countries could be "straightened out rapidly."
Bucking the weak trend, Japan Display Inc jumped 21 per cent after news it secured a financial aid from a Chinese-Taiwanese consortium in June.
Ono Pharmaceutical rallied 3.1 per cent after the company said it will buy back up to 2.92 per cent of its own shares, worth up to 30 billion yen.
The broader Topix index declined 1.3 per cent to 1,512.28, with all but one of its 33 subsectors in the red.