Tokyo stocks fall in morning on Mideast concern, Dow Jones drop
TOKYO (Kyodo) -- Tokyo stocks fell Thursday morning as concerns grew about intensifying tensions in the Middle East following reports that the United States may join Israel in striking Iran.
The 225-issue Nikkei Stock Average fell 287.99 points, or 0.74 percent, from Wednesday to 38,597.16. The broader Topix index was down 16.41 points, or 0.58 percent, at 2,791.94.
The U.S. dollar mostly traded around the 145 yen line in Tokyo as caution prevailed, dealers said.
At noon, the dollar fetched 145.17-19 yen compared with 145.12-22 yen in New York and 144.94-96 yen in Tokyo at 5 p.m. Wednesday.
The euro was quoted at $1.1455-1457 and 166.28-34 yen against $1.1479-1489 and 166.50-60 yen in New York and $1.1512-1513 and 166.86-90 yen in Tokyo late Wednesday afternoon.
On the stock market, sentiment was dampened after Trump reportedly told senior aides that he approved Iran attack plans but has put the final order on hold to see if Tehran would abandon its nuclear program, brokers said.
The market was also dragged down by selling to lock in recent gains after the Nikkei index rose more than 1,000 points over the past three trading days.
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Kyodo News
40 minutes ago
- Kyodo News
FOCUS: "Japan first" push puts PM in dilemma on Trump tariffs ahead of polls
By Noriyuki Suzuki, KYODO NEWS - 9 minutes ago - 17:09 | All, Japan, World Japanese Prime Minister Shigeru Ishiba ended up empty handed in what was viewed as a high-stake meeting with U.S. President Donald Trump in Canada to clinch a deal over U.S. tariffs, suggesting he is in a dilemma as he seeks to put "Japan first" ahead of a must-win national election. Ishiba, whose premiership could be put in peril with another election loss, is treading carefully not to be perceived as yielding to Trump's "America First" pressure and is making his case that there will be no agreement if it hurts Japan's national interest. He also hopes to set a precedent for other countries that negotiations on U.S. tariffs can produce results that can benefit both sides, not one side, without stepping back from Japan's long-held role as a defender of free trade under multilateral arrangements, trade experts say. High on the protection list are autos, as the sector serves as the backbone of the export-driven Japanese economy. But Japan's persistence in demanding a 25 percent auto tariff imposed by the Trump administration be removed -- or reduced at least -- complicates bilateral negotiations, they say. Speaking to reporters after his meeting with Trump on Monday on the fringes of the Group of Seven summit in Canada's picturesque Kananaskis, Ishiba admitted that last-ditch efforts to reach an agreement had continued. "We negotiated to the greatest extent possible over the possibility (of a deal)," he said. "We spoke our hearts out to protect each other's national interests." The meeting capped six rounds of bilateral ministerial-level tariff negotiations, which started in April after Trump imposed new tariffs on steel, aluminum and autos while threatening further "reciprocal tariffs" that could be raised to as high as 24 percent against imports from Japan. Expectations had grown that some sort of agreement could come out of the sit-down between Ishiba and Trump, the second of its kind since February. But the only thing the two leaders agreed upon during their half-hour talks was to accelerate negotiations. Junichi Sugawara, senior fellow at Owls Consulting Group Inc., said gaps over the auto tariff likely prevented what could have been the "best scenario" for the latest summit -- namely to reach a broad agreement the details of which could be later hammered out by working-level officials. "Ultimately, it boils down to whether Japan can come up with plans that are strong enough to prompt Trump to say 'yes' to," said Sugawara, an expert on trade negotiations, referring to proposals on energy investment and ways to enhance economic security in the face of China's growing global influence. Japan has urged the U.S. government to reconsider its tariff policy, which Trump has implemented as a way to reduce his country's massive trade deficit. Last year, Japan shipped around 1.38 million cars to the United States, accounting for more than a quarter of U.S.-bound shipments from Japan in value. The higher levy on U.S.-bound automobiles, therefore, would have a strong bearing on Japanese automakers. When Japan held trade negotiations with the United States under Trump's first term as president, it scrambled to fend off a threatened higher auto tariff and barely escaped from the levies by agreeing to cut tariffs on U.S. farm produce such as pork and beef. As Japan braces for a House of Councillors election on July 20, months after Ishiba's ruling coalition lost its majority in the more powerful House of Representatives in a general election, making easy concessions in tariff talks was never on the table. "Accepting the 25 percent auto tariff would have prompted a strong backlash from labor unions and industry groups and hurt voter support," said Hideo Kumano, an executive chief economist at the Dai-ichi Life Research Institute. "It's the right thing to avoid rushing to a deal because it may be better to see how other countries negotiate their own deals," he said. Yet, without a deal, the economic repercussions will be felt. The major automakers may be able to withstand the effect of the auto tariff for the time being, but the situation will be different for smaller suppliers, according to Kumano. If Trump's tariff policy translates into negative growth for the U.S. economy, this would be a source of concern for Trump and could prompt a rethink. The Japanese economy, meanwhile, is in on shakier ground, with the elevated prices boding ill for the July upper house election. The tariff negotiations also have diplomatic implications, which Ishiba is keenly aware of. The prime minister has told fellow lawmakers that when he holds talks with foreign leaders, they spend a large amount of time talking about Trump. "We are negotiating representing Asia," he was quoted as saying about the Japan-U.S. tariff talks. In the run-up to the summit with Trump, Ishiba held a series of phone calls or in-person meetings with most of the members of the trans-Pacific free trade pact that Japan salvaged following the U.S. withdrawal during Trump's first term. Ishiba, delivering a speech at a recent event to discuss the future of Asia, said Japan will take the lead in expanding the so-called Trans-Pacific Partnership framework to include more members of the Association of Southeast Asian Nations and the European Union. Sugawara, the trade expert, said when the United States is using "economic coercion" to urge Japanese action, Tokyo will have little choice but to explore ways to reduce its overdependence on the key market and find alternatives. The TPP, formally known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, could be a key arrangement. "What Japan should do is to first prioritize its bilateral negotiations with the United States. It also needs to promote dialogue with ASEAN or Europe and keep them updated" as they are also suffering from Trump's tariffs, Sugawara said. "If Japan thinks it can still demand the complete removal of the auto tariff, realistically it'd be a tall order," he said. "But they can work to find common ground in a way that can be logically explained to the peoples of both nations." Related coverage: PM Ishiba says Japan Inc. suffering under Trump tariffs Trump says he sees chance of trade deal with "tough" Japan Japan, U.S. fail to reach tariff deal at Ishiba-Trump summit
Japan Today
an hour ago
- Japan Today
Nippon Steel buyout deal hints at business fragility in U.S.
Nippon Steel Chairperson and CEO Eiji Hashimoto speaks during a press conference at the company's headquarters in Tokyo on Thursday. By Junko Horiuchi U.S. President Donald Trump's bid to attract investment threatens to undermine the appetite for corporate spending in an ironic twist, with the 18-month saga over Nippon Steel Corp's buyout of United States Steel Corp showing the growing vulnerability of businesses in the U.S. market, according to analysts. The U.S. administration's earlier blocking of the $14.1 billion takeover deal was clearly driven by political motives and corporate executives will no longer be able to make decisions regarding their U.S. operations based only business criteria, they said. The wrangling in the high-profile case could lead global companies to think twice about making sizeable investments and acquisitions in the world's largest economy, with many moving to reduce their exposure to the U.S. market. "I do think many companies are pausing investments and major capital expenditures, not only because of the Nippon-U.S. Steel deal but due to general uncertainty surrounding political and economic dynamics in Washington," said Zack Cooper, senior fellow at the American Enterprise Institute. Trump had repeatedly rejected Nippon Steel's plan to take full control of U.S. Steel. But Nippon Steel, the world's fourth-largest steel producer, and U.S. Steel, the 29th largest, said Wednesday following Trump's approval of the buyout plan that they had signed a national security agreement with the U.S. government and finalized the acquisition transaction. Under the deal, the Japanese steelmaker is obliged to invest $11 billion by 2028 on bolstering the U.S. steelmaker's operations, far more than the previously planned $2.7 billion. The U.S. government also obtained a golden share allowing it to veto key management decisions, such as when reducing investment, shedding production capacity in the United States or closing plants. Nippon Steel CEO Eiji Hashimoto told a press conference on Thursday that his company had learned from a year and a half of negotiations with the U.S. government that a flexible management strategy is required. The top executive said it had been believed that governments should not get involved in business deals. "But are strengthening their involvement in economic and business matters through industrial policy," he said. Hashimoto said while his company's acquisition of U.S. Steel should help the world's largest economy, trade levies will not revive its manufacturing sector. "I believe President Trump came to the conclusion that it is necessary to utilize our power to revive the U.S. steel industry," Hashimoto said, adding the Japanese steelmaker aims to bolster its U.S. unit's overseas operations as well. Nippon Steel has concluded a National Security Agreement with the U.S. government, pledging to invest around $11 billion by 2028 in the iconic but struggling company and keep its headquarters in Pittsburgh. During the news conference, Hashimoto shrugged off the possibility that the security pact will hamper its U.S. business. Trump's predecessor, Joe Biden, initially blocked the purchase of U.S. Steel on national security grounds, saying the manufacturing icon, based in Pittsburgh, Pennsylvania -- a key battleground state in the 2024 presidential election -- should be "American-owned and American-operated." Trump also opposed the deal during the presidential race, saying the acquisition of a minority stake in U.S. Steel would not cause any issues, but foreign ownership of the company would not be good psychologically. He ordered a new review of the deal by the Committee on Foreign Investment in the United States in April with a deadline for Trump to make a final decision initially set for June 5. "Because predictability is insanely low right now in the United States, Japanese companies are going to cut back the percentage of their business in the country," said Keisuke Hanyuda, the chief executive of Owls Consulting Group. While rising costs must be dealt with, "The last thing a business wants is to lose predictability," said Hanyuda, a former Japanese trade ministry official in charge of trade talks. Nippon Steel is betting on firm demand for high-tensile strength steel in the U.S. market, capitalizing on its advanced production technology for high-end steel plates used in products such as electric vehicles. The United States is one of three growth markets for the Japanese steelmaker, compensating for shrinking domestic demand. Under Trump, the steel, aluminum, auto and semiconductor sectors have been targeted by specific tariffs driven by political pressures and companies in these industries should consider other markets for growth to hedge their risks, analysts say. Earlier this month, Trump signed an order doubling the tariffs on steel and aluminum imports to 50 percent. "I think Japanese companies will have a difficult time purchasing famous American companies in sectors that President Trump prioritizes, such as autos, steel, aluminum, and chipmaking," Cooper at the American Enterprise Institute said, though investment in other sectors may still be viable. "But any Japanese company that is considering a major deal in the United States should develop a detailed political strategy before announcing a deal, lest they suffer similar roadblocks as Nippon Steel," he said. The United States remains a lucrative market with high growth potential but some global companies are beginning to reduce their reliance on it after the tariffs imposed by Trump, Hanyuda said. The European Union and the Association of Southeast Asian Nations, for example, have resumed economic partnership negotiations, while the EU is also looking at Japan, which is part of a trans-Pacific free trade pact that took effect in 2018 without the United States. © KYODO
Yomiuri Shimbun
3 hours ago
- Yomiuri Shimbun
G7 Summit Closes: ‘U.S. absence' Reveals Group's Fragility
This was a summit that symbolically indicated that an era in which the United States led the international order ended and the world is shifting to an extremely dangerous time. The summit of Group of Seven advanced nations, held in Canada, has ended. This year marked the 50th anniversary since the first summit, at which the leaders of six countries — Japan, the United States and European nations — met in 1975. But the leaders at this year's summit failed to adopt a comprehensive leaders' statement. It was the first time in the history of G7 summits. The direct cause of the unusual turn of events was U.S. President Donald Trump. He had opposed the adoption of the leaders' statement and abruptly returned to the United States after the first day of discussions. The G7 nations have maintained unity by sharing values such as democracy and the rule of law. However, Trump touts an 'America First' policy and turns his back on international cooperation. It can be said that the G7 nations have been transformed into a structure of 'the United States plus the group of six.' Although the influence of the United States is decreasing, the reality that the G7 framework cannot function without the United States has also become obvious. The situation in Ukraine, which should have been one of the main topics on the agenda, was not sufficiently discussed due to Trump returning to the United States, resulting in the G7 nations not adopting a joint statement on additional sanctions against Russia. Despite the extremely tense situation in the Middle East, with Israel bombing Iran just before the opening of the summit, it must be noted that the response of the G7 nations to the situation was far too inadequate. There is no doubt that Iran's continued nuclear development is the root cause of the current crisis. However, in a joint statement, the G7 nations did not condemn Israel's military actions. It is obvious the G7 nations are much too biased in favor of Israel. Before the start of the summit, Prime Minister Shigeru Ishiba said, '[Israel's military actions are] absolutely unacceptable and I strongly condemn them.' Despite this, there are no signs that he asserted this point at the summit. With the debate among the United States, Canada and the European nations being dominated by support for Israel, it is unsatisfying that, as the only Asian country to participate in the summit, Japan failed to take advantage of the opportunity to throw a wrench into the discussions. Trump is trying to promote his own response, rather than work within the framework of the G7 nations. He is pressing Iran for an 'unconditional surrender,' and some observers believe that he may step in to intervene militarily at Israel's request. The era of the G7 nations being able to exert their influence by touting their ideals is over. In the face of a deepening crisis, to what specific extent will the behavior of Israel and the United States be tolerated? Europe and Japan are being forced to make tough decisions. Nevertheless, at the very least, the G7 nations should be able to agree on respecting sovereignty and territorial integrity and refusing to allow the status quo to be changed by force. The G7 nations must return to these principles and focus on stopping warfare. (From The Yomiuri Shimbun, June 19, 2025)
