Japan’s Nikkei share average plunged nearly 5% on Friday, closing a highly volatile week on a sour note. Investor sentiment was rattled by mounting fears over the economic impact of the intensifying U.S.-China trade war, alongside a sharp rise in the yen fueled by safe-haven flows.
By GMT, the Nikkei (.N225) had tumbled 4.8% to 32,931.30, while the broader Topix index (.TOPX) also declined 4.7% to 2,419.67.
“Equity markets are too risky right now with extreme daily fluctuations. The wisest move at this point is to stay away,” said Yusuke Sakai, senior trader at T&D Asset Management.
The week saw dramatic swings in the Nikkei. After plunging 4% earlier in the week, it rebounded 6% on Tuesday and then surged 9% on Thursday—its biggest one-day gain since August—before Friday’s sharp drop erased much of the optimism.
“Stocks perform well when companies grow, but I fear many firms may withhold their outlooks or issue cautious forecasts. That uncertainty could drag the Nikkei even lower,” Sakai added.
Japanese companies are expected to begin releasing their financial guidance for the fiscal year by the end of the month.
Meanwhile, Wall Street also faced a sell-off overnight, as all three major U.S. indexes lost ground. Investor concerns over escalating U.S.-China tensions outweighed the optimism from recent upbeat U.S. economic indicators and improved U.S.-Europe trade dialogue.
In the currency market, the dollar weakened 1% to 142.88 yen—its lowest level since September 30—as investors sought safety in the Japanese currency.
A stronger yen is generally unfavorable for Japanese exporters, as it reduces the value of their foreign earnings when converted back to yen.
Among notable stocks, Fast Retailing (9983.T), the parent of Uniqlo, slid 3.29%, becoming the largest drag on the Nikkei. Semiconductor-related stocks also struggled, with Tokyo Electron (8035.T) down 2.8% and Advantest (6857.T) plunging 8%.
On the upside, consulting firm Baycurrent (6532.T) surged 7.7% after it upgraded its annual net profit forecast and unveiled a share buyback plan.
