(Feb 28): Japanese stocks had their biggest monthly drop since 2022 as a selloff in chip-related firms accelerated and concerns over the global economic impact of President Donald Trump’s tariffs deepened.

There was a broad slump in export-sensitive industries such as electronics and automobiles, non-ferrous metals and shipping. An 8.5% plunge in Nvidia Corp shares on Thursday weighed on semiconductor- and AI-related names in Japan. The two worst performers on the Nikkei 225 Stock Average were Disco Corp and Advantest Corp, with both dropping more than 8%.

“There’s panic-driven selling all across the market,” said Yusuke Sakai, a senior trader at T&D Asset Management Co. “There was some relief among tech shares in Tokyo yesterday after Nvidia’s results, but I think after seeing how tech reacted in the US, people realised that was premature, so now they’re selling and that’s driving more panic.”

The Topix Index fell 2% to 2,682.09 as of the market close in Tokyo, while the blue-chip Nikkei declined  2.9% to 37,155.50, tumbling as much as 3.7% at one point during the day, the biggest intraday drop since September. Both indexes posted their biggest monthly losses since December 2022.

Trump said that 25% tariffs on Canada and Mexico are on track to take effect on March 4, and added he would impose an additional 10% tax on Chinese imports.

“The Nikkei Stock Average has fallen below the 38,000 yen range from October of last year, and the weakness of the market is very noticeable, “said Kohei Onishi, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co. “The market consensus for US President Trump’s tariffs was probably a little optimistic, so the fact that they are actually being implemented in countries such as Mexico, China and others was a surprise.”

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