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Japan's Nikkei bounces as US tariff pause eases market concerns
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Japan's Nikkei bounces as US tariff pause eases market concerns
Feb 3, 2025 7:39 PM

(Updates for midday market close)

By Brigid Riley

TOKYO, Feb 4 (Reuters) - Japan's Nikkei share average

rebounded on Tuesday as concerns around U.S. tariffs eased after

President Donald Trump suspended his threat of steep tariffs on

Mexico and Canada, helping battered automakers recover.

The Nikkei gained 1.6% to 39,140.41 as of the midday

break as investors bought back shares after the benchmark index

logged its worst session in four months on Monday. The broader

Topix added 1.4% to sit at 2,757.47.

Trump agreed to a 30-day pause before engaging in

further negotiations with neighbouring Canada and Mexico,

alleviating immediate fears that rattled global markets on

Monday.

Among stocks rallying on Tuesday were Japanese automakers,

which took a hit in the last session as investors weighed how

tariffs on Mexico might impact auto production. Several

automakers have factories in Mexico.

The auto sub-index rebounded, climbing 2.3% to be

one of the top performers among the Tokyo Stock Exchange's 33

industry groups.

However, uncertainties over the implications of the tariffs

going forward remained.

Kazuo Kamitani, an equities strategist at Nomura Securities,

noted that while Toyota ( TM ) recovered some degree of

Monday's losses in early trade, major Japanese automakers didn't

rise as much as expected.

"Considering that we're still looking at a trade war in one

month, it might be difficult for Toyota ( TM ) to see a more

significant bounce back," he said.

Toyota Motor ( TM ) was last up 2.9%.

Along with lingering questions about U.S. tariffs on Canada

and Mexico, trade barriers on China are still due to take effect

within hours.

Among individual stocks, domestic company revenue reports

created some of the biggest percentage winners and losers on the

Nikkei.

Ceramics maker Kyocera ( KYOCF ) soared 9% and Murata

Manufacturing ( MRAAF ) jumped 5.8%. Mitsubishi Motors ( MMTOF )

slid 13.1% to the bottom of the pack.

Of the Nikkei's 225 constituents, 189 rose and 35 declined.

One share was untraded.

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