Economy Japanese stock market faces biggest crash since Black Monday 1987

thomas · 3 Aug 2024

Japan's stock market suffered its second-worst day on record on Friday, mirroring a sharp decline on Wall Street. The Nikkei index plummeted by nearly 6%, its largest drop since the infamous Black Monday crash of 1987. Chip and financial stocks bore the brunt of the sell-off, with major companies like Tokyo Electron, Advantest, Daiwa Securities, Mitsubishi UFJ Financial Group, and Nomura Holdings experiencing significant losses.

"Speculative players are expanding a lot of their short positions in Japanese equities this morning, especially in the futures market, and they are buying U.S. equities," said Yoshitaka Suda, a quantitative strategist at Nomura Securities. "The magnitude of macro hedge funds shorting Japanese equities is shocking." He said macro hedge funds were net selling Japanese equities and net buying U.S. ones because "where earnings are concerned, U.S. equities look better able to ride out a global economic downturn, whereas Japanese equities are more cyclical." He said that diverging monetary policies in Japan versus the U.S. and Europe are behind speculators' moves. The yen's appreciation is contributing to the sell-off, he said. He expected the possibility of speculative players selling an additional 2 trillion yen ($13.4 billion).

Paywall alert:

Japan stocks take largest dive since Black Monday of 1987

Nikkei average tumbles to lowest close since January; Taiex and Kospi also skid

asia.nikkei.com

Japanese Stocks Tumble 6% as Long-Running Surge Falters

A rapidly strengthening yen and a sell-off in stocks in the United States pushed Japan’s markets to a second consecutive day of big losses on Friday.

www.nytimes.com

In the Tokyo foreign exchange market, the yen strengthened against the dollar, reaching 148 yen per dollar in the morning. The rapid appreciation of the yen has been pressuring export-related stocks.

Nikkei plunges to second-worst decline since 1987 crash | The Asahi Shimbun: Breaking News, Japan News and Analysis

Today, we're at JPY 146.59 for 1 USD.

thomas · 5 Aug 2024

Tokyo's benchmark stock index suffered a catastrophic meltdown on Monday, plummeting 12.4% to close at 31,458.42. This marked the steepest single-day decline in the Nikkei's history, eclipsing even the infamous Black Monday crash of 1987. The index shed a staggering 4,451.28 points amid widespread panic selling triggered by fears of a looming U.S. recession and a strengthening yen. The sell-off culminated in a turbulent week. The Nikkei had already lost 3.5% on Thursday and another 5.8% on Friday following the Bank of Japan's surprise interest rate hike. The central bank's more hawkish stance has ignited concerns about its potential impact on Japan's economy and financial markets.

Japanese megabanks plummeted, with Mizuho Financial Group down by 19.7%, Mitsubishi UFJ Financial Group by 17.8%, Resona Holdings by 19.5% and Sumitomo Mitsui Financial Group by 15.5%. Regional banks were no exception. Chiba Bank declined by 23.7% and Fukuoka Financial Group by 17.9%. Brokerage giant Nomura Holdings was off 18.6%. Exporters were hit by the stronger yen, with Toyota down 13.7%.

Paywall alert:

Japan stocks dive 4,451 points, more than Black Monday in 1987

Yen surges to 141 per dollar as potential U.S. recession spooks investors