Current:Home > FinancePoinbank Exchange|Japan’s Nikkei 225 index plunges 12.4% as world markets tremble over risks to the US economy -Wealthify
Poinbank Exchange|Japan’s Nikkei 225 index plunges 12.4% as world markets tremble over risks to the US economy
Charles Langston View
Date:2025-04-08 22:14:14
BANGKOK (AP) — Japan’s benchmark Nikkei 225 stock index plunged 12.4% on Poinbank ExchangeMonday in the latest bout of sell-offs that are shaking world markets as investors fret over the state of the U.S. economy.
The Nikkei closed down 4,451.28 points at 31,458.42. The market’s broader TOPIX index fell 12.8% as selling picked up in the afternoon.
A report showing hiring by U.S. employers slowed last month by much more than expected has convulsed financial markets, vanquishing the euphoria that had taken the Nikkei to all-times highs of over 42,000 in recent weeks.
The Nikkei 225 dropped 5.8% on Friday, making this its worst two-day decline ever. Its worst single-day rout was a plunge of 3,836 points, or 14.9%, on a day dubbed “Black Monday” in October 1987. At one point, the benchmark sank as much as 13.4% on Monday.
Share prices have fallen in Tokyo since the Bank of Japan raised its benchmark interest rate on Wednesday. The Nikkei is now down 3.8% from a year ago.
One factor driving the BOJ to raise rates was prolonged weakness in the Japanese yen, which has pushed inflation to above the central bank’s 2% inflation target. Early Monday, the dollar was trading at 142.39 yen, down from 146.45 late Friday and sharply below its level of over 160 yen a few weeks ago.
The euro fell to $1.0896 from $1.0923.
Shares surged to stratospheric heights earlier this year on frenzied buying of shares in companies expected to thrive thanks to advances in artificial intelligence. The latest setback has hit markets heavily weighted toward computer chipmakers like Samsung Electronics and other technology shares: on Monday, South Korea’s Kospi plummeted 9.3% as Samsung’s shares sank 11.6%.
Taiwan’s Taiex also crumbled, losing 8.4% as Taiwan Semiconductor Manufacturing Co., the world’s biggest chip maker, dropped 9.8%.
Stocks tumbled around the world on Friday after weaker than expected employment data fanned worries the U.S. economy could be cracking under the weight of high interest rates meant to tame inflation. Early Monday, the future for the S&P 500 was 1.5% lower and that for the Dow Jones Industrial Average was down 0.7%.
“To put it mildly, the spike in volatility-of-volatility is a spectacle that underlines just how jittery markets have become,” Stephen Innes of SPI Asset Management said in a commentary. “The real question now looms: Can the typical market reflex to sell volatility or buy the market dip prevail over the deep-seated anxiety brought on by this sudden and sharp recession scare?”
The VIX, an index that measures how worried investors are about upcoming drops for the S&P 500, fell about 26% as of early Monday. Bitcoin which recently had surged to nearly $70,000, was down 14% at $54,155.00.
Oil prices were little changed. U.S. benchmark crude oil gained 9 cents to $73.61 per barrel while Brent crude was flat at $76.81 per barrel.
Investors will be watching for data on the U.S. services sector from the U.S. Institute for Supply Management due later Monday that may help determine if the sell-offs around the world are an overreaction, Yeap Jun Rong of IG said in a report.
Worries over weakness in the U.S. economy and volatile markets have rippled around the world, even though the U.S. economy is still growing, and a recession is far from a certainty.
Elsewhere in Asia, Hong Kong’s Hang Seng index lost 2.5% to 16,519.78 and the S&P/ASX 200 in Australia declined 3.8% to 7,637.40.
The Shanghai Composite index, which is somewhat insulated by capital controls from other world markets, edged higher but then gave way, losing 1.2% to 2,870.34.
The S&P 500’s 1.8% decline Friday was its first back-to-back loss of at least 1% since April. The Dow Jones Industrial Average dropped 1.5%, and the Nasdaq composite fell 2.4%.
Friday’s losses dragged the Nasdaq composite 10% below its record set last month. That level of drop is what traders call a “correction.”
The rout began just a couple days after U.S. stock indexes had jumped to their best day in months after Federal Reserve Chair Jerome Powell gave the clearest indication yet that inflation has slowed enough for cuts to rates to begin in September.
Now, worries are rising the Fed may have kept its main interest rate at a two-decade high for too long, raising risks of a recession in the world’s largest economy. A rate cut would make it easier for U.S. households and companies to borrow money and boost the economy, but it could take months to a year for the full effects to filter through.
“Specifically, the scenario of higher unemployment constraining spending and further restraining hiring and incomes and economic activity leading to a recession is the feared scenario here,” Tan Boon Heng of Mizuho Bank in Singapore said in a report.
veryGood! (2)
Related
- South Korean president's party divided over defiant martial law speech
- Get Sweat-Proof Makeup That Lasts All Day and Save $25 on These Tarte Top-Sellers
- Kylie Jenner Has the Best Plus-One in Daughter Stormi for Met Gala Night 2023
- 15 Skimpy Swimwear Essentials for Showing Off in Style: Triangle Tops, Cheeky Bottoms & More
- The Daily Money: Spending more on holiday travel?
- TikToker Jake Octopusslover8 Shane Shares How Amassing Millions of Followers Impacted His Mental Health
- Lea Michele Hits a High Note During First Met Gala Appearance in 9 Years
- Sydney Sweeney Reveals Her Nickname for Co-Star Glen Powell
- B.A. Parker is learning the banjo
- Mother’s Day 2023: The Best Flower Deals Your Mom Will Appreciate
Ranking
- Federal hiring is about to get the Trump treatment
- Wayfair Way Day Doorbusters: Last Day to Get $119 Sheets for $16 and Deals on KitchenAid, Dyson, and More
- Inside Halsey and Alev Aydin's Co-Parenting Relationship After Breakup
- Today’s Climate: April 17-18, 2010
- The Best Stocking Stuffers Under $25
- Shop Our Favorite Festival Fashion Trends That Dominated Coachella 2023
- Get Glowing Skin and Save 45% On a Complete Sunday Riley Beauty Routine
- Jamie Lee Curtis Congratulates Film Daughter Lindsay Lohan on Pregnancy With the Ultimate Message
Recommendation
'As foretold in the prophecy': Elon Musk and internet react as Tesla stock hits $420 all
How Kourtney Kardashian's Kids Supported Travis Barker at Blink-182's Coachella Show
I Tried This $15 Crystal Hair Remover From Amazon—Here's What Happened
You Won't Believe These Stars Have Never Been to the Met Gala
Federal Spending Freeze Could Have Widespread Impact on Environment, Emergency Management
Meltdown May Is Around the Corner — Here’s What To Buy To Avoid Yours
These Are the Celeb Exes Who Could Run Into Each Other Inside the Met Gala 2023
Why Kylie Jenner Thinks It's Time for Her Family to Address the Beauty Standards They're Setting