financetom
Market
financetom
/
Market
/
Japanese shares dive as market frets over premiership, US-China tensions
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Japanese shares dive as market frets over premiership, US-China tensions
Oct 14, 2025 5:55 AM

TOKYO (Reuters) -Japanese shares sank on Tuesday after a long weekend, clocking their sharpest one-day drop since April, as investors fretted over uncertainty surrounding the country's next premier and persistent U.S.-China trade tensions.

The Nikkei share average closed 2.58% lower at 46,847.32, while the broader Topix slid 2% to 3,133.99.

Japanese investors returning from a national holiday on Monday faced a complex global backdrop, including a stronger yen and a steep Wall Street sell-off on Friday.

While both saw partial reversals, market sentiment remained fragile as U.S.-China trade tensions accelerated, with shifting signals from U.S. President Donald Trump unsettling traders.

On balance, weaker U.S. stocks and a stronger yen since the start of Japan's extended weekend weighed on the market, said Maki Sawada, an equity strategist at Nomura Securities.

In addition, the initial euphoria from fiscal dove Sanae Takaichi's election as leader of the Liberal Democratic Party at the start of the month has faded after coalition partner Komeito pulled support. This opened a small possibility of an opposition party leader being elected prime minister by parliament later this month. Local media say October 20 or October 21 are likely dates for the vote.

The Nikkei struck a record high last week in the immediate reaction to Takaichi's surprise victory but the shock exit of Komeito has cast doubts over what happens next.

"The decline of the 'Takaichi trade' is one reason" for weakness in Japanese stocks on Tuesday, Sawada said. "Political uncertainty is weighing."

The Japanese yield curve also steepened on Tuesday, with investors buying short-dated Japanese government bonds and selling longer-dated securities as investors took stock of the political flux.

Exporters, whose overseas revenue is crimped by a stronger currency, dropped on Tuesday, with Toyota down 1.2%.

SoftBank Group slumped 6%, extending its pullback from a record high on Thursday as the heavyweight startup investor continued to retreat.

Elsewhere, Muji owner Ryohin Keikaku surged more than 13% following its earnings after the closing bell on Friday, making it the Nikkei's top-performing stock.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Sector Update: Healthcare Stocks Decline Premarket Thursday
Sector Update: Healthcare Stocks Decline Premarket Thursday
May 21, 2026
09:21 AM EDT, 05/21/2026 (MT Newswires) -- Healthcare stocks were declining premarket Thursday, with the iShares Biotechnology ETF (IBB) 1% lower and the State Street Health Care Select Sector SPDR ETF ( XLV ) down 0.1%. Immix Biopharma ( IMMX ) shares were up more than 6% after the company said it achieved a 95% complete response rate in a...
Sector Update: Energy Stocks Advance Pre-Bell Thursday
Sector Update: Energy Stocks Advance Pre-Bell Thursday
May 21, 2026
09:28 AM EDT, 05/21/2026 (MT Newswires) -- Energy stocks were advancing pre-bell Thursday, with the State Street Energy Select Sector SPDR ETF ( XLE ) 0.8% higher. The United States Oil Fund ( USO ) was up 3.4% and The United States Natural Gas Fund ( UNG ) was 0.4% higher. Front-month US West Texas Intermediate crude oil was 0.8%...
Sector Update: Financial Stocks Fall Premarket Thursday
Sector Update: Financial Stocks Fall Premarket Thursday
May 21, 2026
09:27 AM EDT, 05/21/2026 (MT Newswires) -- Financial stocks were falling premarket Thursday, with the State Street Financial Select Sector SPDR ETF (XLF) declining by 0.4%. The Direxion Daily Financial Bull 3X Shares (FAS) was down 1.1% and its bearish counterpart Direxion Daily Financial Bear 3X Shares (FAZ) was 0.9% higher. S&P Global ( SPGI ) shares were down more...
Sector Update: Tech Stocks Decline Premarket Thursday
Sector Update: Tech Stocks Decline Premarket Thursday
May 21, 2026
09:19 AM EDT, 05/21/2026 (MT Newswires) -- Technology stocks were declining premarket Thursday, with the State Street Technology Select Sector SPDR Fund (XLK) down 0.6% and the State Street SPDR S&P Semiconductor ETF ( XSD ) 0.6% lower. IBM ( IBM ) , GlobalFoundries ( GFS ) and D-Wave Quantum ( QBTS ) are among the major quantum companies set...
Copyright 2023-2026 - www.financetom.com All Rights Reserved