Japanese Banks Tumble Amid Trump's Trade Turmoil

Japanese bank shares nosedived due to fears that U.S. President Trump's tariffs could hinder global growth. The Tokyo banking index fell 10%, impacting major banks like Mitsubishi UFJ. This highlights the potential setbacks to Japan's recovery from deflation and its reliance on U.S. economic relations.

Shares of Japanese banks nosedived on Friday, underscoring the ripple effects of U.S. President Donald Trump's latest tariffs. Concerns are mounting over a potential global economic slowdown, which could derail Japan's fragile recovery and delay crucial rate hikes.

The Tokyo index of banking stocks dropped a staggering 10% as of 0537 GMT. This decline was most prominently seen with Mitsubishi UFJ Financial Group, Japan's largest bank by assets, suffering a 10% fall in its share price.

The downward trend in Japan's banking sector serves as a stark reminder of how Trump's protectionist measures could hinder Japan's tentative steps out of deflation. Analysts stress that the future trajectory of Japan's growth is heavily linked to developments in the U.S., a primary market for Japanese automakers and other industries.

(With inputs from agencies.)