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Stock prices fell sharply Friday morning on the Tokyo Stock Exchange, which plunged the index.
The Nikkei 225 benchmark closed the morning session at 21,031, down 509 points from Thursday's close.
The broad TOPIX index fell 33 points to 1,533.
According to market sources, the announcement by US President Donald Trump that tariffs would be imposed on more Chinese products fueled fears of prolonged trade tensions between the two countries.
They say that there is a sense of crisis that a possible slowdown in the global economy could bring an extra blow to Japanese companies.
One source said Trump's latest announcement was unexpected, causing confusion in the markets and dropping share prices in other parts of Asia.
The announcement of Trump would also have affected the currency trading in Tokyo. The dollar fell more than 2 yen to reach the top level of 106 yen at one point on Friday morning for the first time in about a month.
According to market sources, speculation that the US Federal Reserve could reduce the policy rate also led to a fall in US long-term interest rates, which led to the sale of the dollar and the purchase of the yen .
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