Japan Nikkei in Historic Single-Day Points Nosedive
Japan Nikkei in Historic Single-Day Points Nosedive
Kanako Mita and Hiroshi Saito
Modern Tokyo Times
The Japan stock market plummeted by 12.4% (down by 4,451 points). This is unparalleled in the points history of the Nikkei and left the index closing at 31,458.
October 19, 1987, witnessed the biggest Nikkei drop in percentage terms – when the stock market plunged by 14.9% (3,836 points).
NHK reports, “The prospect of a narrowing interest-rate gap between Japan and the United States is prompting investors to sell the dollar and buy the yen.”
Accordingly, the decline of the Nikkei 225 by 12.4% highlights the natural fundamentals of the Japanese stock market. Since early July, the Nikkei 225 is down by approximately 25%.
CNN reports, “Fears of a sharp slowdown in the US economy have raised expectations that the Federal Reserve will have to slash interest rates. Coming as the Bank of Japan (BOJ) takes its interest rates higher to contain inflation, that is boosting the value of the yen against the US dollar and making Japanese export-dependent stocks less attractive.”
Shunichi Suzuki (Finance Minister) said the central government was observing international markets with “grave concern.”
Suzuki continued, “It’s hard to say what is behind the decline in stocks.”
The banking sector of Japan witnessed a mega one-day rout of tumbling by 17%.
Yoshimasa Hayashi (Chief Cabinet Secretary) said, “We’re aware there are various evaluations regarding the stocks plunge this time around, and about the status of the Japanese economy, but the government will continue its efforts to completely break free of deflation and to transition to a growth-driven economy.”
ABC News – concerning the economy of America – reports, “A bonanza around artificial intelligence technology helped drive Big Tech stocks higher, while other areas of the market held up amid rising hopes for coming cuts to interest rates by the Federal Reserve. But professional investors have been warning that shakier times may be ahead given uncertainty about how quickly the Fed will cut interest rates and other big questions.”
The yen strengthened to 142 on Aug 5 concerning the dollar from 161 in early July.
Lee Jay Walker (Modern Tokyo Times analyst) says, “The Japanese stock market and market volatility is based on the interconnectivity with America. This isn’t in the natural interest of a major G7 nation.”
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