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Japan's Nikkei 225 index plunges 12.4% as world markets tremble over risks to the US economy
By ELAINE KURTENBACH
Updated 12:17 AM PDT, August 5, 2024
BANGKOK (AP) — Japan’s benchmark Nikkei 225 stock index plunged 12.4% on Monday, resuming sell-offs that are shaking world markets as investors fret over the state of the U.S. economy.
The Nikkei closed down 4,451.28 points at 31,458.42. The market’s broader TOPIX index fell 12.8% as selling picked up in the afternoon.
Darkening the outlook for trading on Wall Street, early Monday the future for the S&P 500 was 2.4% lower and that for the Dow Jones Industrial Average was down 2.6%.
A report showing hiring by U.S. employers slowed last month by much more than expected has convulsed financial markets, vanquishing the euphoria that had taken the Nikkei to all-times highs of over 42,000 in recent weeks.
The Nikkei 225 dropped 5.8% on Friday, making this its worst two-day decline ever. Its worst single-day rout was a plunge of 3,836 points, or 14.9%, on Oct. 20, 1987, a day that was dubbed “Black Monday.” This Monday was gloomy enough: at one point, the benchmark sank as much as 13.4%.
Share prices have fallen in Tokyo since the Bank of Japan raised its benchmark interest rate on Wednesday. The Nikkei is now down 3.8% from a year ago.
One factor driving the BOJ to raise rates was prolonged weakness in the Japanese yen, which has pushed inflation to above the central bank’s 2% inflation target. Early Monday, the dollar was trading at 142.59 yen, down from 146.45 late Friday and sharply below its level of over 160 yen a few weeks ago.
The euro fell to $1.0914 from $1.0923.
https://apnews.com/article/stocks-markets-nikkei-economy-c6240977e9482bf7207abc53b2a11e58