Donald Trump’s effective election as the 47th U.S. President jolted global markets. Japanese stocks rose while Chinese markets declined, possibly foreshadowing shifts in the global economic landscape.
On Wednesday, Japan’s benchmark Nikkei 225 index surged as Trump, the former president and Republican nominee, gained an edge in the U.S. election vote count.
The Nikkei closed at 39,480, up 2.61% from the previous day’s 38,474. It peaked at 39,664 around 12:50 PM, nearing the 40,000 threshold. Notable gains were seen in export-oriented stocks like Tokyo Electron and defense industry players such as Mitsubishi Heavy Industries and Kawasaki Heavy Industries.
The yen-dollar exchange rate fluctuated, initially dropping from 152.2 yen at the previous Tokyo forex market close to about 151.3 yen at 9 AM before spiking to 154.3 yen by 3:40 PM.
Japanese market analysts predict that a Trump victory could lead to higher U.S. inflation due to potential tax cuts and import tariffs. This could make it challenging for the Federal Reserve to cut rates, potentially prolonging yen weakness.
While Japanese stocks gained, Chinese markets moved in the opposite direction. The Shanghai Composite Index closed at 3,383.81, down 0.09% from the previous session.
The Shenzhen Component Index slipped 0.35% to 10,968.14, and the ChiNext, often dubbed “China’s Nasdaq,” closed 1.05% lower at 2,265.83.
Despite opening 0.24% higher at 3,395.22, the Shanghai Composite Index fluctuated throughout the morning before trending downward in the afternoon, ultimately closing in negative territory.
This downturn was estimated to be driven by fears of worsening U.S.-China relations, compounded by the election outcome. While the agriculture and real estate sectors showed resilience, banks, coal, and AI phone companies faced challenges.
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