Japan stocks drop 1.2%, leading declines in Asia as Trump tariffs dent sentiment

Japanese stocks led declines in Asia-Pacific markets, after U.S. President Donald Trump made it clear that tariffs on Mexico and Canada would go into effect as planned.

The benchmark Nikkei 225 index plunged 1.20% to end the day at 37,331.18, while the broader Topix index lost 0.71% to close at 2,710.18.

Japan’s employment rate for January came in at 2.5%, slightly higher than Reuters’ estimates of 2.4%.

South Korea’s Kospi index ended the day 0.15% lower at 2,528.92, while the small-cap Kosdaq retreated 0.81% to 737.90.

The country’s retail sales for January fell 0.6% from the previous month. Revised estimates show a rise in the 0.2% rise in the metric in December.

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

Investors kept a watch on Chinese stocks as the mainland kicks off its annual parliamentary gathering, known as the “Two Sessions.” Mainland China’s CSI 300 index ended the day flat at 3,885.22.

Australia’s S&P/ASX 200 ended the day 0.58% lower at 8,198.10.

The country’s retail sales for January rose 0.3% in line with Reuters estimates. Retail sales had declined 0.1% in December.

Indian’s benchmark Nifty 50 was trading down 0.28%, while the BSE Sensex index lost 0.27% as at 1.15 p.m. local time.

Overnight in the U.S., all three major indexes fell as Trump reiterated that 25% levies on imports from Mexico and Canada would go into effect Tuesday stateside.

The S&P 500 fell 1.76% to end the day at 5,849.72. This marks its worst day since December and brings its year-to-date performance to a loss of about 0.5%. The Dow Jones Industrial Average dropped 649.67 points, or 1.48%, to finish at 43,191.24. The Nasdaq Composite slid 2.64% to close at 18,350.19, weighed down by Nvidia‘s decline of more than 8%.

— CNBC’s Alex Harring and Yun Li contributed to this report.