TOKYO: Japan’s Nikkei 225 surged 7.9% to close at 34,226.17 on Thursday, buoyed by investor relief following US President Donald Trump’s surprise announcement of a 90-day suspension on newly imposed tariffs. The broader Topix index also climbed 7.2% to 2,518.26, as nearly all sectors rebounded sharply.
The rally marks a dramatic turnaround after a week of heightened market volatility. On Monday, the Nikkei plunged 7.8% to a one-and-a-half-year low, before rebounding 6% on Tuesday, then falling another 4% on Wednesday. Thursday’s recovery was fueled by a strong overnight performance on Wall Street, where the S&P 500 posted a 9.5% gain — its biggest single-day increase since 2008.
Market analysts attributed the rebound to investor optimism that the tariff pause could soften geopolitical tensions and reduce headwinds for global trade.
“Investors were quick to buy back into the market, likely regretting the heavy selling earlier in the week,” said Seiichi Suzuki, Chief Equity Market Analyst at Tokai Tokyo Intelligence Laboratory. “The sharp rebound also shows the market had overreacted to the initial tariff announcement.”
Fast Retailing, the parent company of Uniqlo, rose 7.2%, providing a strong lift to the benchmark index. Chip-related stocks also posted outsized gains, with Tokyo Electron jumping 11.77% and Advantest surging 13.66%, buoyed by renewed investor confidence in the tech sector.
All 33 industry sub-indexes on the Tokyo Stock Exchange gained, with the nonferrous metals sector leading the rally with a 12.65% increase. The banking sector, which had been heavily sold off amid recession concerns, bounced back with a 9.2% gain.
Morgan Stanley analysts said the tariff suspension is particularly bullish for Asian markets, with Japan standing out due to its strong reflationary fundamentals.
“Japan had come closest to pricing in a recession among major Asian markets,” the investment bank noted in a research update. “This policy reversal unlocks significant upside potential.”
Of the 225 constituents on the Nikkei, all but one registered gains. On the Tokyo Stock Exchange’s Prime Market, 99% of stocks advanced, underscoring broad-based investor confidence and renewed momentum in Japanese equities.
