Japan’s benchmark Nikkei 225 stock index plunged nearly 13% on Monday, extending sell-offs that shook world markets last week as worries flared over the state of the U.S. economy. Additionally, the Japan Nikkei plunge underscores the interconnectedness of global economies. #JapanNikkeiPlunge
Near closing time in Tokyo, the Nikkei was down more than 4,500 points at 31,341.29. The market’s broader TOPIX index fell 11.5% as selling picked up in the afternoon.
A report revealed that hiring by U.S. employers slowed significantly more than anticipated last month. This news has shaken financial markets. Consequently, it has erased the euphoria that drove the Nikkei to record highs of over 42,000 recently.
The Nikkei 225 dropped 5.8% on Friday and it is headed for its worst two-day decline ever. Its worst single-day rout was a plunge of 3,836 points, or 14.9%, on a day dubbed “Black Monday” in October 1987. Share prices have fallen in Tokyo since the Bank of Japan raised its benchmark interest rate on Wednesday. The Nikkei is now down 4.3% from a year ago.
One factor driving the BOJ to raise rates was prolonged weakness in the Japanese yen, which has pushed inflation to above the central bank’s 2% inflation target. Early Monday, the dollar was trading at 142.67 yen, down from 146.45 late Friday and sharply below its level of over 160 yen a few weeks ago. #JapanNikkeiPlunge
This steep drop of nearly 13% highlights the volatility in international markets. Moreover, it has prompted investors to reevaluate their strategies. Furthermore, experts believe that the Japan Nikkei plunge could impact other Asian markets. The sharp decline is a reminder of how closely linked financial systems are, emphasizing the need for robust economic policies.
