Tokyo (FFN) – Japan’s stock market suffered a catastrophic plunge on Friday, with the Nikkei 225 index plummeting over 5%. The dramatic decline was triggered by a perfect storm of economic woes, including disappointing US manufacturing data and a surprise interest rate hike by the Bank of Japan.
Investors were sent reeling as fears of a global recession intensified. The sell-off was so severe that it marked the second worst day in the index’s history, eclipsed only by the initial shockwaves of the Covid-19 pandemic.
The Bank of Japan’s decision to raise interest rates, a surprising move given the country’s long-standing battle with deflation, sent the yen soaring. A stronger yen hurts Japanese exporters, as it makes their products more expensive overseas.
All eyes will now be on how the Japanese government and central bank respond to this market meltdown. With global economic uncertainty looming large, investors are bracing for more volatility in the weeks ahead.
