Tokyo stocks plunged Monday ahead of a major round of tariffs set to be imposed this week by the United States and following big drops on Friday on Wall Street, where tech was hit especially hard.

Toyota, Honda and Nissan were among the big decliners in Japan as the week got rolling, and they were joined by Hitachi and Tokyo Electron. Stocks elsewhere in the region also fell, although the drops in other Asian markets were less pronounced than those in Japan.

U.S. President Donald Trump announced last week that 25% tariffs will be placed on all autos and auto parts imported into the United States from this Thursday. He is also expected to announce a major round of reciprocal tariffs this week in what he is calling "Liberation Day."

The possibility of the new duties — along with the president's on-again-off-again threats on the trade front — has rattled investors and increased concern that the U.S. economy could face stagflation, or low growth, high inflation and high unemployment.

Tech stocks in the United States are down more than 10% from their peak, while the broader S&P 500 index is down almost 10% from its highs.

On Monday in Tokyo, the benchmark 225-issue Nikkei average fell about 4% and traded at or near six-month lows. The yen strengthened throughout the day.

Traders and analysts are expecting a week of volatility as the tariff situation becomes clearer and waivers, if any, are granted. Japan has been pushing, so far without success, to be exempt from the new duties.

“The decline in stock prices isn't due to Japanese factors, so I think it depends on where U.S. stocks stop falling and where the yen's appreciation stops,” said Yutaka Miura, senior technical analyst at Mizuho Securities.

The Trump administration's reciprocal tariffs are designed to counter nontariff barriers, such as value-added taxes and weak currencies. Both China and Japan have been accused of keeping their currencies weak and could be targeted.

Economic statistics are also being closely watched. U.S. employment data will be released later this week, and they could cause further instability in the markets if they are outside of forecasts one way or the other.

If U.S. stocks continue to fall, Japanese stocks will likely decline further, Miura said. He added that it's possible that the Nikkei index might fall below the 35,500 level.

Japanese statistics might also play into the calculations of investors. Industrial production and retail sales were both released Monday and both came in slightly higher than expected. Signs of the economic recovery being on track might give the Bank of Japan cause to raise rates sooner rather than later.

Once the tariff news and U.S. economic indicators are out of the way, stocks might bottom out and then start rebounding toward early May, Miura said.

“However, if the economic impact of the tariffs becomes apparent or if economic data show poor performance, we could see another sell-off,” he added.

Japanese stocks have been struggling to convincingly break the curse of the ’80s since the index hit all-time highs in July last year. The 225-issue Nikkei average broke the previous high of 38,915.87 — set in 1989 — on Feb. 22, 2024, and then made its way as far as 42,426.77 in July.

Since then, it settled range-bound between about 38,000 and 40,000, and then started dropping as the Trump administration got underway.

The benchmark index is now about 15% off its peak.

Analysts have said the market may be overly cautious about Japanese stocks because of the potential impact of the U.S. tariffs, while the yen’s weakening trend seems to have ended for the time being.

A weak currency helps to boost the earnings of the large exporters that dominate the benchmark index.