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Just now, the Japanese stock market collapsed.

Japanese stocks collapsed

Let’s first look at the decline of several major Japanese stock indices.

Among them, the share price of Daiwa Securities fell 21%, Sumitomo Mitsui Financial Group fell more than 8%, and SoftBank Group fell more than 6%. Giants such as Toyota Motor, Honda Motor, and Sony all fell sharply.

The plunge in Japanese stocks also affected other markets. Among them, the South Korean Composite Index opened sharply lower, the Australian S&P 200 Index plunged, and the Singapore stock index also opened sharply lower.

Gold rose slightly.

The Japanese yen also continued to strengthen.

Japanese stocks continue to collapse

In fact, Japanese stocks fell sharply yesterday.

The Nikkei 225 index fell sharply after opening yesterday. The Topix index fell nearly 4% at one point, the largest intraday drop since April 2020, and all sectors fell. As of the close, the Nikkei 225 index closed down 975.49 points, or 2.49%, at 38,126.33 points.

Earlier, the Bank of Japan held a monetary policy meeting and decided to adjust the current policy rate of 0% to 0.1% to 0.25%. This rate hike is the first rate hike since the lifting of the negative interest rate policy in March this year. In addition, the Bank of Japan also decided to reduce the scale of Japanese government bond purchases in the next 1 to 2 years.

On March 19 this year, the Bank of Japan decided to end its negative interest rate policy and raised the policy interest rate from -0.1% to a range of 0 to 0.1%. This was the first interest rate hike by the Bank of Japan in 17 years since February 2007.

Poor performance of European and American markets

The plunge in Japanese stocks was also affected by the sharp drop in European and American markets last night.

Among them, the S&P 500 index closed down 75.62 points, or 1.37%, to 5446.68 points.

The Dow Jones Industrial Average closed down 494.82 points, or 1.21%, at 40,347.97, while the Nasdaq Composite Index closed down 405.25 points, or 2.30%, at 17,194.15.

European markets also suffered a sharp drop across the board, with stock indices in Britain, France and Germany all falling.

On the news front, the U.S. labor market continued to cool, and several indicators suggested that it had returned to pre-pandemic levels.

The number of first-time unemployment claims in the United States in the week ended July 27 was 249,000, higher than the expected 236,000 and the previous value of 235,000. The rebound in the number of first-time claims in the United States last week to the highest level in a year added to the positive news of interest rate cuts. The US data showed signs of economic slowdown again. The US ISM Manufacturing PMI in July was 46.8, significantly lower than the market expectation of 48.8 and the previous value of 48.5 in June. The shrinkage was the largest in eight months, exacerbating market concerns about a US recession.

In addition, the Bank of England cut interest rates by 25 basis points for the first time since the beginning of 2020, and hinted that it would cut interest rates cautiously and slowly in the future, predicting that future inflation risks would maintain an upward trend. Bank of England Governor Bailey said not to cut interest rates "too quickly or too much."

Editor: Peng Bo

Proofreader: Peng Qihua