Japanese Market Significantly Lower

(RTTNews) - The Japanese stock market is trading significantly lower on Tuesday, snapping a five-session winning streak, despite the broadly positive cues from Wall Street overnight, with the Nikkei 225 falling below the 40,100 level, with weakness across most sectors led by index heavyweights and financial stocks.

US President Donald Trump threatened to impose new tariffs on Japan, following the country's resistance to importing American rice. He also confirmed that the 25% tariff on Japanese auto imports would remain in place, due to the persistent trade imbalance.

The benchmark Nikkei 225 Index is down 409.18 points or 1.01 percent at 40,078.21, after hitting a low of 40,036.09 earlier. Japanese shares ended significantly higher on Monday.

Market heavyweight SoftBank Group is losing almost 1 percent andUniqlo operator Fast Retailing is declining almost 3 percent. Among automakers, Honda is edging up 0.3 percent, while Toyota is losing more than 1 percent.

In the tech space, Advantest is edging up 0.4 percent, while Screen Holdings is declining almost 2 percent and Tokyo Electron is losing more than 1 percent.

In the banking sector, Mitsubishi UFJ Financial is down more than 1 percent, while Mizuho Financial and Sumitomo Mitsui Financial are losing almost 1 percent each.

The major exporters are mostly lower. Panasonic is edging down 0.2 percent, while Canon and Sony are declining almost 2 percent each. Mitsubishi Electric is gaining almost 1 percent.

Among the other major gainers, Tokyo Electric Power is surging more than 5 percent, while OKUMA and Furukawa Electric are gaining more than 3 percent each. Sumitomo Heavy Industries and Toto are adding almost 3 percent each.

Conversely, Lasertec and Otsuka Holdings are losing almost 3 percent each.

In economic news, large manufacturing in Japan accelerated slightly in the second quarter of 2025, the Bank of Japan's quarterly Tankan Survey of business sentiment showed on Tuesday with a diffusion index score of +13. That beat forecasts for +10 and was up from +12 in the previous three months. The outlook came in at +12, beating forecasts for +9 and unchanged from the previous quarter.

The large non-manufacturers index came in at +34, matching forecasts and down from +35. The outlook slipped to +27 from +28 in the three months prior. The small manufacturing index fell to +1 from +2, while the small non-manufacturing index was steady at +9. Large industry capex is seen higher by 11.5 percent, up from 3.1 percent in Q1. Small industry capex was down 5.6 percent after sinking 10.0 percent in the three months prior.

In the currency market, the U.S. dollar is trading in the higher 143 yen-range on Tuesday.

On Wall Street, stocks moved mostly higher over the course of the trading session on Monday, adding to the strong gains posted last week. With the continued upward move, the Nasdaq and the S&P 500 once again set new record closing highs.

The major averages reached new highs late in the session before giving back some ground going into the close. The Dow advanced 275.50 points or 0.6 percent to 44,094.77, the Nasdaq climbed 96.27 points or 0.5 percent to 20,369.73 and the S&P 500 rose 31.88 points or 0.5 percent to 6,204.95.

Meanwhile, the major European markets have moved to the downside on the day. While the German DAX Index slid 0.5 percent, the U.K.'s FTSE 100 Index fell by 0.4 percent and the French CAC 40 Index dipped by 0.3 percent.

Crude oil prices closed lower on Monday amid a backdrop of easing Middle Eastern tensions and concerns of excess supply as OPEC plans to scale up production. West Texas Intermediate crude for August delivery closed down by $0.41 to settle at $65.11 per barrel.