Japan's Nikkei 225 Index Sees Historic Collapse: What's Behind the 12.4% Drop?
Japan's Nikkei 225 Index witnessed a massive 12.4% drop, its biggest single-day fall since October 1987. What triggered this historic collapse? We take a closer look at the factors behind this dramatic decline.
Nikkei 225 IndexStock MarketJapanBear MarketAsian Stock IndexesReal Estate NewsAug 05, 2024
The Nikkei's dramatic fall followed a 5.8% decline on Friday, wiping out all its gains this year. In fact, the index has dropped more than 25% since it reached a record high last month, officially entering bear-market territory.
The historic collapse has left investors reeling, with many scrambling to make sense of the sudden downturn. So, what exactly triggered this massive drop?
One major factor contributing to the Nikkei's collapse was the disappointing U.S. jobs data. The latest figures showed a significant slowdown in job growth, stoking fears of a global economic downturn. This, in turn, led to a significant increase in the value of the yen, further exacerbating the Nikkei's decline.
The Nikkei's collapse also had a ripple effect on other Asian stock indexes. South Korea's benchmark Kospi, for instance, fell 8% on Monday.
The question on everyone's mind now is what's next for the Nikkei? Will the index recover from this historic collapse, or will it continue its downward spiral?
Only time will tell, but one thing's for sure – the Nikkei's collapse has left investors on edge, and the road to recovery will be long and arduous.
About Nikkei Inc. Nikkei Inc. is a Japanese media company that publishes the Nikkei 225 Index, a widely followed stock market index. The company was founded in 1876 and is headquartered in Tokyo, Japan.
Frequently Asked Questions
What triggered the Nikkei 225 Index's 12.4% drop?
The Nikkei's collapse was triggered by a combination of factors, including disappointing U.S. jobs data and a further rise in the yen.
What is the Nikkei 225 Index?
The Nikkei 225 Index is a widely followed stock market index published by Nikkei Inc. It tracks the performance of 225 blue-chip companies listed on the Tokyo Stock Exchange.
Is the Nikkei 225 Index in bear-market territory?
Yes, the Nikkei 225 Index has dropped more than 25% since it reached a record high last month, officially entering bear-market territory.
How did the Nikkei's collapse affect other Asian stock indexes?
The Nikkei's collapse had a ripple effect on other Asian stock indexes, including South Korea's benchmark Kospi, which fell 8% on Monday.
What's next for the Nikkei 225 Index?
It's difficult to predict what's next for the Nikkei 225 Index, but one thing's for sure – the road to recovery will be long and arduous.
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