President Donald Trump’s decision to implement a tariff pause fort all countries other than China for 90 days generated no shortage of stock market winners.
One of the large markets that immediately saw massive gains was Japan. The benchmark Nikkei 225 index soared with the April 10 morning bell and is, at press time on the same day, up 9.13%.
The beloved gaming giant Nintendo (TYO 7974) is a particularly major winner of the decision, as the new grace period effectively gave it the time to ship vast quantities of its Nintendo Switch 2 console to the U.S. before the tariffs are implemented.
The console, a successor to the exceptionally successful Nintendo Switch, is scheduled to hit the shelves on June 5, 2025 – more than a month before the tariff pause expires.
Still, it is worth noting that the Switch 2 is set to have a long lifecycle, judging by the predecessor that launched in 2017, meaning one month provides precious little time to gain a foothold in the American market.
Despite the potential long-term headaches, investors reacted positively to the development and the window of opportunity, and Nintendo stock was up 11.70% on April 10 and changed hands at ¥10,505 (~$72.14).
Trump tariff pause gives a much-needed reprieve to Japanese stocks
Along with providing traders with a major one-day gain, the rally ensured that Nintendo shares hit their April highs and effectively erased the preceding tariff losses. The Liberation Day announcement hit Japan with the comparatively low – yet in absolute terms high – 24% tariff
The East Asian country’s equity market reacted violently. Between April 5 and April 9, the Nikkei 225 dropped 6.12%, a situation grave enough to trigger a trade war alliance between China, South Korea, and Japan.
Despite the latest rally, the island nation’s stock market remains substantially below the late March levels, with the benchmark index 6.53% in the red in the 30-day chart. Simultaneously, Nintendo stock is 5% up within the same time frame but 7.28% below its March 26 high.
Why the Nintendo tariff pause rally might evaporate quickly
Lastly, despite the positive developments, Nintendo’s stock rally might not persist for long. The 30-day window is relatively short, meaning that while it gives a chance for a strong launch, it leaves much room for doubt in the long term. Additionally, the original console was manufactured in Vietnam and China.
If the same facilities continue being used for the production of Nintendo Switch 2, not only will the product be subject to the much higher 46% tariff on Vietnam, but some could also suffer from the China tariffs that have not been paused and, at press time on April 10, exceed 100%.
Featured image via Shutterstock
