Japan’s Nikkei Drop 14%: Worst One-Day Plunge Since 1987!

Key Points:

• Japan’s Nikkei 225 plunged 12.9% to 31,290.63 points, marking its worst two-day decline ever.
• The drop follows a 5.8% decrease on Friday, reflecting concerns over potential US economic downturns.
• Key Japanese companies saw significant losses: Toyota -11%, Honda -13.4%, Tokyo Electron -15.8%, and Mitsubishi UFJ -18.4%.

Japan’s Nikkei 225 share index plunged nearly 14% on Monday as investors worried the US economy may worsen.

Japan’s Nikkei had dropped 13.6% to 31,010 points; after the index tanked 5.8% on Friday, the slide would put it on course to post its most severe two-day loss ever.

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Historic 12.9% Plunge Marks Worst Two-Day Decline

The current slump in Japan’s Nikkei rivals some of its most infamous crashes. The biggest one-day fall in the index was on October 19, 1987—”Black Monday”—when it fell 14.9% or 3,836 points. Other significant falls include an 11.4% decline during the global financial crisis in October 2008 and a 10.6% drop in March 2011 after devastating earthquakes and nuclear meltdowns in northeastern Japan.

This is the most recent wave of selling in a broader selling response to increased worries about the health of the US economy. This was since last Wednesday when the Bank of Japan increased its benchmark interest rate. The benchmark now stands at roughly 4% below what it was a year ago at today’s date, adding further pressure to the market.

Key Japanese Companies Suffer Losses

The broad sell-off hit Japan’s most prominent companies: Toyota Motor Corp. fell 13.66%, while Honda Motor Co. slid 17.71%. Tokyo Electron, a significant computer chip maker, slid 18.1%, and Mitsubishi UFJ Financial Group lost 17.84%.