Is anyone getting those 2008 déjà vu vibes yet?
https://www.straitstimes.com/business/japan-s-stock-rout-enters-third-day-with-nikkei-in-bear-market
TOKYO – Japan’s equity rout entered a third day as weak US jobs data added another blow to investor confidence left fragile from a surge in the yen, higher interest rates and geopolitical tensions in the Middle East.
The Nikkei 225 Stock Average slid as much as 7 per cent in morning trading on Aug 5, driving the blue-chip gauge’s drop from a record high to over 21 per cent – a loss that signals a bear market. The benchmark, which entered a technical correction last month, has tumbled almost 12 per cent over three days.
The broader Topix sank more than 6 per cent All 33 of its industry groups have fallen since the Bank of Japan (BOJ) raised interest rates on July 31, triggering a surge in the yen that has cast a pall over the earnings outlook for exporters. Even insurers and banks that were expected to benefit from higher rates are now some of the biggest losers since the BOJ’s hike as global equity markets slump.
Signs of weakness in the US economy sparked a slump on Wall Street on Friday (Aug 2) and a plunge in Treasury yields.
The Nikkei plunged 7% on market open, trading was halted, index now down 21+% since July
byu/rwandb-2 ineconomy
by rwandb-2
6 comments
Tech stocks and bitcoin coin will bring down the rest of market a la 2000 dot com crash
Not sure why it says Japanese banks were expected to benefit from the interest rate hikes. With how infamously risk-adverse banks are in Japan, a huge part of their balance sheets were probably low bps NEGATIVE interest rate Gov bonds. Hell, I wouldn’t even know if this is recorded as an asset or liability. Anyways, any potential interest rates they can charge on new accounts would be wiped out 10X or more from interest rate risk and impairment revisions to what they already hold in Gov bonds to… wait for it… even more negative interest on what they bought. Very f’d up situation for them.
Yup
When’s the bottom?
Doom loop commence
Not really. Interest rate cuts are coming and they’ll fix all this. Powell waited too long because he wanted to keep them high until after the election.