Japan’s Stock Market Has Crashed to its Worst Drop Since 1987

Japan’s Stock Market has crashed which is the biggest drop in market since the Black Monday crisis of 1987. The Nikkei and TOPIX indices have each dropped over 8%, with both falling about 20% from their July 11 highs. This historic plunge follows a 5% drop in the Nikkei and a 6% decline in the TOPIX just days earlier. The decision by the Japanese central bank to hike interest rates in an effort to curtail its purchases of government bonds has been blamed for the steep slump. 

This move, combined with a weaker yen, has spurred massive sell-offs, with major trading houses like Mitsubishi, Mitsui & Co., Sumitomo, and Marubeni seeing around a 10% drop in their stock values. The yen has also hit its lowest level against the US dollar since January 2024, trading at 142.77. This yen devaluation has led to a rush of investor exits from the Japanese market. With ongoing uncertainty and further rate hikes anticipated, the Japanese financial landscape remains precarious. 

Japan’s Stock Market Crash Triggers Global Financial Turmoil

The turmoil in Japan is reverberating across global markets. South Korea has halted sell orders as its stock market also faces significant losses. In the cryptocurrency sphere, Bitcoin has plunged 17% to $50,350, contributing to a $1.04 billion drop in the broader crypto market. The U.S. is bracing for a recession, with the Fed expected to cut rates, adding further instability. The interconnected nature of these markets underscores the global impact of Japan’s financial woes.