Japanese stocks have been on a wild ride over the last week or so, with the benchmark Nikkei Stock Average marking its two worst daily sell-offs of all time but also racking up its largest single-day rise.
Fears over a possible U.S. recession, a fluctuating yen and moves by central banks have been weighing on investors’ minds, while analysts warn more volatility could lie ahead — especially with major events approaching in September such as the U.S. Federal Reserve’s next policy meeting.
Here is a selection of stories to bring you up to date on the latest developments.
The Nikkei Average plummeted on Monday, recording its worst-ever daily sell-off. Panic selling, triggered by fears of a possible U.S. recession and the yen’s strength, led the index to drop 4,451.28 points, surpassing the Black Monday crash of October 1987. Read more.
Nikkei Stock Average rose as much as 3,453.38 points, or 10.98%, to 34,911.80 at one point. (Photo by Nanami Sato)
On Tuesday, however, the benchmark index surged 3,217.46 points — its largest single-day climb. The rebound followed the release of U.S. service sector data for July, which helped ease concerns of a recession. Read more.
Along with stocks, the yen has been on the move, gaining 10% against the dollar over the past month. That has prompted some foreign exchange strategists to predict the currency will end the year stronger than they had previously expected — in the mid-140 range to the greenback. Read more.
Japanese stocks took a big upswing on Aug. 6 after suffering their worst-ever sell-offs in the previous two trading days. (Photo by Nanami Sato)
Despite the already intense roller coaster ride, analysts say that investors should expect the Japanese market’s volatility to continue, especially with market trading set to decline due to Japan’s Bon holiday travel season this month. Read more.
The BOJ on Wednesday hiked interest rates to 0.25%, signaling its growing confidence in the recovery of Japan’s economy.
© Reuters
Comments aimed at calming the market came on Wednesday, when Bank of Japan Deputy Gov. Shinichi Uchida said it would not raise interest rates at times of market turmoil, prompting stocks to edge higher. Read more.
On July 31, the BOJ announced an interest rate increase to 0.25% from between 0% and 0.1%, in an aggressive move that signals the central bank’s growing confidence in the recovery of the domestic economy and its concern about a markedly weaker yen. Read more.
U.S. job growth slowed more than expected in July, while the unemployment rate increased to 4.3%, heightening fears that the labor market is deteriorating and of an economic recession. Read more.
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Publish date : 2024-08-09 13:00:00
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