Key takeaways:

• Japan's Nikkei share average fell to an eight-month low due to President Trump's new tariffs.
• The index dropped as much as 4.6%, impacting major sectors including banking and automotive.
• Overall market sentiment turned negative amid fears of a global recession, exacerbated by economic turmoil in the U.S.

TOKYO: Japan's Nikkei share average slumped to an eight-month low on Thursday, triggering alarm among investors following U.S. President Donald Trump’s announcement of substantial reciprocal tariffs, including a 24% levy on Japanese goods. The Nikkei fell as much as 4.6% during early trading, leveling off eventually at 34,102.00 points—its lowest since August 7. By 0050 GMT, the index regained some ground but still remained down by 2.9%.

Out of the 225 stocks in the Nikkei, a staggering 216 were in the red, reflecting widespread market distress. The broader Topix index also saw significant losses, down by nearly 4.3%, before closing 3.1% lower. Kazuo Kamitani, an equities strategist at Nomura Securities, characterized the situation as a "Trump tariff shock," marking a significant risk-off sentiment in the market.

Banking stocks, a critical sector on the Tokyo Stock Exchange, were hit hardest, sliding by 6.4%. The outlook for lending and investment income looks bleak due to a sharp decline in bond yields both locally and globally. The automotive sector faced a similar fate, with shares of major companies such as Toyota experiencing a 4.7% decrease amid tariffs on car exports to the U.S.

Tech stocks also mirrored this downturn. Notable losses were observed with Tokyo Electron declining 5.8% and Advantest falling 4.9%, further exacerbating the bearish market trend. Investors are now highly cautious, closely monitoring the ramifications of these tariffs amid rising global recession fears. According to Bangkok Post, the selloff in Japan's markets coincides with a challenging scenario on Wall Street, where major indices recorded significant losses.

As market analysts like Jon Withaar highlight, Japanese banks find themselves entrapped in a dual crisis of declining rate-hike expectations and looming recession risks. The Bank of Japan has indicated it will reassess its monetary policy outlook in light of potential economic fallout from these unprecedented tariffs.

For further details, refer to the full articles from Channel News Asia and Reuters.