Tokyo stocks opened lower Friday, after US President Donald Trump announced a five percent tariff on all goods from Mexico, with shares in automakers that have Mexico plants dropping sharply.

Pedestrians looks at a stock indicator showing share prices of the Tokyo Stock Exchange in Tokyo. (File photo: AFP)

The benchmark Nikkei 225 index fell 0.79 percent, or 164.66 points, to 20,777.87 in early trade, while the Topix index was down 0.77 percent, or 11.72 points, at 1,520.26.

Trump abruptly announced the tariff plan on Twitter, saying Washington would impose it from June 10 until "illegal migrants" stop coming through Mexico into the United States.

The move sent shares in Japanese automakers down sharply, with Honda dropping 3.75 percent to 2,665 yen, Mazda plummeting 6.25 percent to 1,071.5 yen, Nissan down 3.66 percent to 747.4 yen, and Toyota slipping 2.54 percent to 6,404 yen.

Trump said the tariff "will gradually increase until the Illegal Immigration problem is remedied, at which time the Tariffs will be removed," he wrote.

"Details from the White House to follow," he added.

Hiroaki Hiwata, strategist at Toyo Securities, said many Japanese carmakers would be negatively affected by the decision because they have plants in Mexico.

The dollar traded at 109.26 yen in early Asian trade, against 109.61 yen in New York late Thursday.

Trump's move to impose a five percent tariff would be "disastrous," Mexico's under-secretary for North American affairs at the Mexican foreign ministry said, vowing to retaliate.

The threat of the fresh tariff hike overwhelmed the positive impact on the Tokyo market of rallies on Wall Street, analysts said.

In New York, the Dow ended up 0.2 percent at 25,169.88.