The Nikkei fell as much as 4.6% in early trading, dropping to 34,102.00 for the first time since August 7. By 0050 GMT, the benchmark index recouped some losses to 2.9%.
Of the Nikkei’s 225 components, 216 were in the red, while just nine showed gains.
The broader Topix lost as much as 4.3% before recovering slightly to trade down 3.1%.
“We thought tariffs would be 10%, maybe 20%, but instead they were a whopping 24%,” said Kazuo Kamitani, an equities strategist at Nomura Securities.
“Call it the Trump tariff shock,” he said. “The market is firmly in risk-off mode.” Banks were the worst performers among the Tokyo Stock Exchange‘s 33 industry groupings, sliding 6.4%, as a sharp decline in bond yields at home and abroad darkened the outlook for income from lending and investing. The bourse’s automaker sub-index dropped nearly 4%, with a separate 25% tariff on car exports to the United States set to go into effect later on Thursday. Shares of Toyota Motor slid 4.7%.
Chip-sector heavyweights also saw significant sell-offs. Tokyo Electron, a chip-making equipment manufacturer, dropped 5.8%, while Advantest, a chip-testing equipment maker and Nvidia supplier, slumped 4.9%.
