As the sell-off from the previous week persisted, Asia-Pacific markets witnessed a continued decline on Monday, leading to Japan’s stocks officially entering a bear market. The Nikkei 225 and Topix recorded significant drops of over 12%, underscoring the bearish sentiment gripping the region.
Both benchmark indexes have now plummeted by more than 20% from their peak on July 11, indicating a stark downturn in market sentiment. The Nikkei’s staggering 12.4% decline, culminating in a close at 31,458.42, marked its worst performance since the infamous “Black Monday” crash of 1987. Notably, the index recorded its largest single-day point loss in history with a decrease of 4,451.28 points.
The Nikkei further suffered a setback by wiping out all gains amassed earlier in the year, thereby transitioning into a negative year-to-date position. The broader Topix index mirrored the Nikkei’s downward trajectory, experiencing a sharp 12.23% drop and concluding the session at 2,227.15 amidst the widespread market rout.
The Tokyo Price Index, TOPIX, which covers all domestic companies listed in the First Section of the Tokyo Stock Exchange, triggered a circuit breaker early in the morning following the Bank of Japan’s decision to raise its benchmark interest rate to about 0.25% last week, compared to the previous range of 0% to 0.1%. Under Ueda’s leadership, the BOJ has increased rates by a total of 35 basis points in just four months.
Mitsubishi, Mitsui and Co, Sumitomo, and Marubeni experienced steep declines of more than 14%, with Mitsui in particular witnessing a significant erosion of nearly 20% of its market capitalization.
