Tokyo, Feb 3 (IANS): Tokyo stocks plunged on Monday as concerns over the impact of US tariffs on the global economy led to a broad sell-off, particularly in auto stocks.
The benchmark Nikkei stock index, the 225-issue Nikkei Stock Average, closed down 1,052.40 points, or 2.66 per cent, to end at 39,572.49.
In a reaction to US President Donald Trump's decision to impose tariffs on Mexico, Canada, and China, short-term overseas investors sold stock index futures to hedge risks, further pressuring the Nikkei.
Major automakers such as Toyota, Nissan, Honda, and Mazda saw declines due to concerns over the impact of tariffs on their earnings.
Despite the overall market decline, some individual stocks showed resilience. SoftBank Group and its telecom unit, SoftBank, rose slightly after announcing a partnership with OpenAI to launch a new AI service for enterprises.
The broader Tokyo Stock Price Index (TOPIX) also declined, closing 68.27 points, or 2.45 percent, lower at 2,720.39, Xinhua news agency reported.
Among the listed stocks on the Tokyo Stock Exchange's Prime Market, 1,470 declined, while 154 rose, and 15 remained unchanged.
On Saturday, Trump ordered to impose a 25-per cent tariff on imports from Mexico and Canada, and a 10-per cent tariff on Chinese goods. He also signalled that the European Union (EU) could be next, citing the bloc's persistent trade surplus with the US.
The European Commission on Sunday criticised the move and vowed to hit back, if targetted.
"The European Union (EU) regrets the US decision to impose tariffs on Canada, Mexico, and China," an EU spokesman was quoted by local media as saying.
He highlighted the importance of "open markets and respect for international trade rules," saying they are essential for strong and sustainable economic growth. "Tariffs create unnecessary economic disruption and drive inflation. They are hurtful to all sides," he added.
Referring to potential US tariffs on EU products, the spokesman said "the EU would respond firmly to any trading partner that unfairly or arbitrarily imposes tariffs on EU goods."
"Our trade and investment relationship with the United States is the biggest in the world. There is a lot at stake," he was quoted as saying.