Nikkei closes flat on concerns over US-Japan trade deal, Trump's retaliatory tariffs

Nikkei index, Tokyo stock marketThe index closed almost unchanged on Thursday (July 4), pressured by concerns over US-Japan trade talks after President Donald Trump warned that the US government could start sending letters detailing new reciprocal tariffs to trading partners as early as Friday.

Kyodo News Agency reported that the Nikkei index closed at 39,810.88 points, an increase of 24.98 points or +0.06%.

The gainers were led by the power and gas sectors, as well as the banking sector, while the decliners were led by the marine transportation and non-ferrous metals sectors.

The Nikkei briefly broke through the 40,000-point mark in the morning, boosted by gains in semiconductor stocks that followed the US market after reports that the US government had lifted restrictions on chip design software exports to China.

However, the positive factor was overshadowed by concerns over US-Japan trade talks after President Trump warned on Thursday (July 3) that the US government could start sending letters detailing new reciprocal tariffs to trading partners as early as Friday, with a 90-day suspension of tariffs set to expire next Wednesday (July 9).

"Investors are cautiously watching for developments that may occur later this Friday or in the next few days, which could have an impact on the market's direction," said Asuka Sakamoto, senior economist at Mizuho Research & Technologies Ltd.

China's Shanghai Composite Index closed higher on Thursday (July 4) amid volatile trading as investors remained cautious amid uncertainty over global trade.

The Shanghai Composite Index closed at 3,472.32, up 11.17 points, or +0.32%.

Stocks that rose today included Foxconn Industrial, up 2.3%, Shenzhen Woer, up 7.6% and Wus Printed Circuits, up 6.5%.

US President Donald Trump announced on Monday that the US plans to begin sending letters detailing new reciprocal tariffs to trading partners in the coming days as a trade negotiation deadline approaches, potentially unilaterally imposing new tariffs.

Hong Kong's Hang Seng Index closed lower on Thursday (July 4), pressured by concerns about US tariffs after President Donald Trump said the US government could start sending letters detailing new reciprocal tariffs to trading partners as early as Friday, with a 90-day suspension of tariffs set to expire next Wednesday (July 9).

The Hang Seng Index closed at 23,916.06 points, down 153.88 points or -0.64%.

Meanwhile, investors are eyeing key Chinese economic data due next week, including June's consumer price index (CPI) and June's producer price index (PPI), due on Wednesday (July 9).

South Korea's benchmark stock index closed lower on Thursday (July 4) on profit-taking after recent gains, as investors awaited progress in tariff talks between the United States and its trading partners as the 90-day deadline for tariff relief looms.

The South Korean Stock Market Composite Index (KOSPI) closed at 3,054.28 points, down 61.99 points or -1.99%.

Large-cap stocks Samsung Electronics fell 0.78%, chipmaker SK Hynix lost 2.87%, and battery maker LG Energy Solution lost 2.51%.

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