Tokyo’s Nikkei index opened in the green on Tuesday, after losing 12.4% on Monday and suffering the biggest drop in points in its history.
Markets open higher in Japan, after the biggest collapse since the 1980s
Depositphotos
The Tokyo stock market plunged on Monday, while the yen appreciated sharply. However, this Tuesday (it should be noted that in Asia it is already a new day) The Nikkei index started the day in the green after having suffered the biggest drop in points in its history.
The main index on the Japanese stock market, which had already fallen 5.8% on Friday, plummeted 12.4% on Monday to 31,458.42 points, after falling some 4,400 points during the session.breaking its record for losses dating back to the stock market crash of October 1987.
The yen, which has appreciated sharply, is depreciating on Tuesday.
Why the markets fell sharply
What happened was that the employment figures in USAworse than expected, generated a feeling in the markets that it is possible that we are entering a period of recession, instead of a “soft landing”, which would force the Fed to cut rates further than expected to contain activity.
On the other hand, last Wednesday, the Bank of Japan (Boxwood) had decided to raise its target rate to 0.25%, the highest level since 2008. This complicated the “carry trade” that had been generated: basically They took advantage of the very low rates in Japan, and with that money they invested in other countries such as the United States.
Source: Ambito
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