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Nikkei Extends Slide as Record JGB Yields and Greenland Tariff Threats Hit Sentiment

Investors gauge election tax-cut pledges that have driven borrowing costs higher.

People walk in front of an electronic stock board showing Japan's Nikkei index at a securities firm Monday, Jan. 19, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)
People walk in front of an electronic stock board showing Japan's Nikkei index at a securities firm Monday, Jan. 19, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)
Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), right, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Tuesday, Jan. 20, 2026. (AP Photo/Ahn Young-joon)
A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Monday, Jan. 19, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

Overview

  • Japan’s Nikkei fell for a fourth straight session, with early trade showing losses of about 0.8% as selling persisted across sectors.
  • Japanese government bond yields climbed to record levels, including the 40-year yield reaching 4%, pressuring equity valuations.
  • Prime Minister Sanae Takaichi set a Feb. 8 snap election and proposed a temporary suspension of the sales tax on food, stoking fiscal worries.
  • President Donald Trump threatened new U.S. tariffs on eight European countries over Greenland, starting at 10% from Feb. 1 and rising to 25% on Jun. 1, weighing on European and Asian markets.
  • Safe-haven demand lifted precious metals, with silver hitting a fresh record near US$94.73 as risk-off flows built across the region.