The Nikkei 225 Index fell 2.17% to close at 36,887 on Friday, nearing its lowest levels since September and tracking losses on Wall Street, where technology stocks were hit by heavy selling pressure.

President Trump's shifting tariff policies and the escalating global trade war fueled fears about the economy, increasing market uncertainty.

Additionally, local equities faced pressure from a stronger yen and rising Japanese Government Bond (JGB) yields, as expectations grow that the Bank of Japan will continue raising interest rates this year. Economy Minister Ryosei Azakawa announced that Japan is set to officially declare the end of long-term deflation, marking a significant shift in the government's economic stance that could influence the timing of the next rate hike.

Sharp losses were seen across various sectors, including Fujikura (-4.6%), Kawasaki Heavy Industries (-4.2%), Sony Group (-4.2%), IHI Corp (-5.2%), and Nintendo (-9.2%).

Source: Trading Economics