Effects of President Trump Remarks on Japanese Automakers

Abstract

We investigated effects of President Trump remarks in May 2018 on Japanese automakers. We can extract the hidden relationship among companies just from seeing the movement of stock prices. When a large event happens, stocks are likely to move in a similar way if they have a tight relation. The analysis method we used is Random Matrix Theory and the data is the stock prices of 38 Japanese automakers. We found that Isuzu has a similar movement to Toyota compared with Suzuki and Matsuda, although Isuzu, Suzuki, and Matsuda belong to the Toyota group. In addition, we found that Suzuki and Yamaha are likely to move reversely, compared to other automakers, because Suzuki and Yamaha would not be given so large damages from the tariff rise. Then we found indices of minor damage of Suzuki.