Updated: Japanese market hits rock-bottom since 1987

Tue, 08/06/2024

by Ellie LeTu

Source: Financial Times

• Record-low in Japanese market

  • The TOPIX experienced its sharpest drop since 1987, falling 12.2%.

  • As mentioned before, Japan raised interest rates from 0.1% to 0.25%, the highest in 15 years, causing a sell-off in Japanese stocks.

  • Futures trading in Japan was suspended on Monday afternoon due to dramatic price swings affecting market liquidity.

• Slump in US market

  • The S&P 500 dropped 3% on Monday, 08/05/2024, with 95% of stocks declining.

  • Nvidia's stock prices also fell.

  • The VIX reached a record high, increasing fears of an economic crash.

• FED’s pressure to cut interest rates

  • Markets are expecting two 50 basis point cuts and one 25 basis point cut from the FED in the final three meetings of the year.

• Negative effects on global markets

  • The decline in the US stock market, along with the high VIX index, and the crash in the Japanese market had significant global impacts.

  • Similar downturns were observed in markets worldwide, particularly in Korea and Europe.