Business cycle | A collapse in the Japanese stock market on Monday – “We haven’t seen anything like this since the corona pandemic”

of Tokyo the stock exchange’s general index fell exceptionally low as the nervousness of the stock market continued on Monday.

The main index of the Tokyo Stock Exchange, the Nikkei 225, fell by as much as 12.4 percent on Monday. The Indes score fell by more than 4,450 points, which according to the news agency AFP was the largest daily drop in the index score ever.

Monday’s collapse was a continuation of the decline that started last week. On Friday, the Nikkei fell by almost six percent.

The broader Topix index also fell by more than 12 percent. Bloomberg’s according to Monday was Topix’s weakest day since 1987.

Stock prices have fallen on Monday in Asia more broadly. Asian stock markets outside of Japan are widely followed by MSCI Asia ex Japan index took off already on Thursday. On Monday at 10:40 Finnish time, the index was down about 4.3 percent.

Trading was suspended on Korea’s Kosdaq exchange after it slumped eight percent like its neighbor. Instead, the Taiwan stock exchange, which has fallen by seven percent, plans to hold a press conference to reassure investors.

Financial media Bloomberg and news agency Reuters reported on the situation.

“We do not haven’t seen this kind of carnage since the sales day of the corona pandemic in February-March 2020″, summarized to Bloomberg analyst at financial company IG Australia Tony Sycamore.

The value of Japan’s currency, the yen, has increased, which hurts the country’s exports.

“Many companies did not expect such a sharp and surprising rise in the Japanese yen,” summed up the SMBC banking group’s economist Ryota Abe for Reuters.

Root causes the hassle can be found, at least in part, in the United States and its struggling economy.

The country’s employment situation was revealed last week worse than expected. The unemployment rate rose to 4.3 percent, which is the highest reading since autumn 2021. fear of recession.

At the same time, inflation, i.e. the increase in consumer prices, has not slowed down in the United States as predicted, so the country’s central bank has delayed interest rate cuts. The bank decided in the middle of last week its policy rate unchanged.

In itself, slowing down the labor market is apt to slow down inflation. However, the market doubts the US central bank’s ability to react to the situation.

In the United States, stock market futures are also predicting a noticeable downward opening until Monday’s stock market day. The futures of the technology-focused Nasdaq index were down about five percent Finnish time on Monday morning, while the futures of the broad S&P 500 index were down about 2.6 percent.

The market “there was a dramatic turn in the narrative”, commented on the confusing situation to Reuters a Singaporean analyst Chary Chanana.

Australian analyst George Boubouras reassured in an interview with Reuters that everyone was “overreacting”. According to him, employment data should look at a longer course of development.

Nordea’s chief analyst Jan von Gerich assesses on the messaging platform X that the exceptionally sharp drop in the main indices of the Japanese market “smells like an overshoot at this point, but sometimes even sufficient fears of a recession can trigger one”.