Japan bourse tanks amid recession fears
The average’s daily sell-off was the largest ever in history and worse than in the Black Monday crash of October 1987
Daily TribuneThe average’s daily sell-off was the largest ever in history and worse than in the Black Monday crash of October 1987
Japan’s benchmark Nikkei Stock Average recorded its worst-ever daily sell-off on Monday, losing 4,451.28 points from the previous day’s closing amid panic selling triggered by fears of a possible US recession and the yen’s strength.
The average’s daily sell-off was the largest ever in history and worse than in the Black Monday crash of October 1987, when it lost 3,836.48 points. The average closed down 12.4 percent to 31,458.42. By percent, it was the second-largest fall since Black Monday.
The yen surged to 141.73 against the dollar, a level not seen since early January, from 146.52 yen in New York on Friday.
The Japanese currency has rapidly appreciated from levels of nearly 162 in early July, its weakest value since 1986.
A stronger yen is a negative factor for Japanese exporters and the recent rally has been fueled by central bank policy decisions that have reversed the trends of recent years.
BoJ rates up
The Bank of Japan (BoJ) last week raised interest rates for the second time in 17 years, with talk of another rate hike to come, while the US Federal Reserve has hinted at a cut as soon as September.
Daiwa Securities said the losses in Tokyo reflected “deepening concerns over the uncertain US economy.”
“Investor sentiment was down as the US employment data for July came in lower than expected, raising fears that the US economy is slowing more than expected,” IwaiCosmo Securities said.
“The market was also weighed down by the yen’s appreciation against the dollar and as expectations for exporters’ upbeat financial results receded,” the brokerage added.
On Wall Street on Friday, the Dow Jones Industrial Average finished down 1.5 percent as data showed the US jobs market cooled much more than expected in July.
‘The market was also weighed down by the yen’s appreciation against the dollar and as expectations for exporters’ upbeat financial results receded.’
European stock markets also closed sharply in the red.
In an attempt to calm volatility in the market, futures trading was suspended for 10 minutes as a so-called “circuit-breaker” on the Nikkei and Topix indexes on the Osaka Exchange in Japan’s western metropolis, an exchange official said.
Semiconductor shares plunged with Tokyo Electron nosediving 18.48 percent to 22,055 yen and Advantest tumbling 15.84 percent to 5,313 yen.
