Japanese Stocks Plunge Triggers Circuit Breaker—Why Are Analysts Still Bullish?  

TradingKey - Japanese stocks plummeted, triggering a trading halt, but analyst Jason Tang remains optimistic about their outlook.  

Monday marked a dark day for Japanese stocks, with markets opening sharply lower and continuing to decline. The Nikkei 225 index plunged over 8% intraday, hitting its lowest level since October 2023, while the TOPIX index dropped more than 12%. 

The steep losses triggered circuit breakers for Nikkei 225 and TOPIX futures, leading to a temporary trading suspension.  

Since the beginning of this year, Japanese stocks have been on a downward trend, with the Nikkei 225 falling over 20% and the TOPIX losing around 18%, severely denting investor confidence.  

Nikkei 225 Price Chart, Source: Google.

In the view of Nikkei analysts, the bottom for Japanese stocks remains uncertain, with potential for further volatility or declines. They noted, "It may take more time for the market to truly find its bottom."

Contrary to this outlook, TradingKey analyst Jason Tang is bullish on Japanese stocks.  Tang believes, "The decline in Japanese stocks is driven by multiple factors, including Trump’s foreign policies, spillover effects from the U.S. economic slowdown, the impact of falling U.S. tech stocks, and the Bank of Japan’s rate hikes—with Trump’s tariff measures being the most critical factor."

Jason Tang added, "As the headwinds from tariffs fade, potential negative effects remain manageable, and Japan’s economy recovers, we remain optimistic about the Japanese stock market."