The Nikkei 225 dropped 247 points or 0.9% to 37,595 in Monday morning trade, while the broader Topix fell 0.3% to 2,733, tracking a plunge in U.S. futures after Moody's downgraded the U.S. credit rating to Aa1 from Aaa on Friday, citing a deteriorating fiscal trajectory and "a lack of effective policy action" to rein in deficits. Sentiment was further pressured by Treasury Secretary Bessent's warning that trade partners would face maximum tariffs if they failed to negotiate with the U.S. in "good faith." Additionally, Japan's Q1 2025 GDP shrank 0.2% qoq, worse than the expected 0.1% fall and marking the first drop in a year, reflecting the impact of U.S. trade policies and weak external demand, particularly from China. Most sectors retreated as investors awaited key Chinese data for April, including industrial output and retail sales, due later today. Early notable decliners included Japan Post Holdings (-2.6%), Sompo Holdings (-1.3%), Tokyo Electron (-1.0%), and Sony Group

Source: Trading economi