Japanese stocks slipped on Thursday as the yen firmed and investors weighed the risk of new US tariffs on autos, semiconductors, and pharmaceuticals.

The Nikkei 225 lost 1.33%, or 521.94 points, to close at 38,642.67.

Sentiment was dented after US President Donald Trump said he would impose a 25% duty on car imports and similar levies on key technology and drug sectors.

He said auto tariffs could take effect on April 2 after receiving cabinet reports on trade measures.

Trump has long criticized foreign auto tariffs, pointing to the EU's 10% duty on vehicle imports, compared with the US' 2.5% on passenger cars and 25% on pickup trucks from outside North America.

EU trade chief Maros Sefcovic is set to meet US officials in Washington on Wednesday to discuss the proposed measures.

The yen strengthened 0.38% to 151.49 per dollar as investors sought safety in the Japanese currency.

In corporate news, The Yokohama Rubber (TYO:5101) reported an 11% rise in attributable profit to 74.9 billion yen for 2024, as revenue climbed 11% to 1.095 trillion yen on strong tire sales and a weaker yen.

ITFOR (TYO:4743) took a stake in Tokyo-based Vacan, an AI-driven congestion management startup, via a third-party share allotment completed Feb. 17. The company plans to roll out Vacan's platform to regional governments.

Mitsui & Co. (TYO:8031) is acquiring 40% of Australia's Rhodes Ridge iron ore project for $5.34 billion. The site, holding 6.8 billion tons of ore, is slated to start production in 2030.

Rio Tinto (ASX:RIO) will operate the project, leveraging Mitsui's Robe River infrastructure. The acquisition adds 400 billion yen to Mitsui's investment budget.