Japan stocks drop 1.2% as Trump tariffs dent sentiment

Japanese stocks led the downturn in Asia-Pacific markets after U.S. President Donald Trump confirmed that tariffs on Mexico and Canada would be implemented as planned.

The benchmark Nikkei 225 index dropped 1.20%, closing at 37,331.18, while the broader Topix index fell 0.71%, ending the day at 2,710.18.

Japan’s employment rate for January came in at 2.5%, slightly above the forecast of 2.4%.

In South Korea, the Kospi index closed 0.15% lower at 2,528.92, while the smaller Kosdaq index dropped 0.81%, ending at 737.90. South Korea’s retail sales for January decreased by 0.6% compared to the previous month, with revised estimates showing a 0.2% increase in December.

Hong Kong’s Hang Seng index was down 0.16% in its final hour of trading.

Chinese stocks were closely monitored as the country began its annual parliamentary session, known as the "Two Sessions." The mainland’s CSI 300 index ended the day flat at 3,885.22.

Australia’s S&P/ASX 200 finished the day 0.58% lower at 8,198.10. Retail sales in Australia for January rose 0.3%, in line with Reuters’ expectations, after a 0.1% decline in December.

In India, the benchmark Nifty 50 index was down 0.28%, and the BSE Sensex index lost 0.27% as of 1:15 p.m. local time.

In the U.S., all three major indexes fell as Trump reiterated that the 25% tariffs on imports from Mexico and Canada would go into effect on Tuesday. The S&P 500 fell 1.76%, closing at 5,849.72, its worst day since December, and bringing its year-to-date performance to a loss of approximately 0.5%. The Dow Jones Industrial Average dropped 649.67 points, or 1.48%, to finish at 43,191.24, while the Nasdaq Composite slid 2.64%, closing at 18,350.19, weighed down by a more than 8% drop in Nvidia’s stock.