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he The Nikkei 225 index on the Tokyo Stock Exchange fell 12.4%. Mark lIn nominal terms, this is the largest drop in history This was the most significant market crash since 1987 and had a contagion effect on other international markets.
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The Japan Select Index is now down more than 20% from its all-time high on July 11. It has entered bear market territory and erased all of its gains so far this year.
Dictators don’t like this.
Professional and critical journalism practice is a fundamental pillar of democracy. That is why it troubles those who think they are in possession of the truth.
Why does this happen?
The main reason is that cChanges in the Bank of Japan’s monetary policy The higher-than-expected rate hike surprised investors.
Over the years, The Bank of Japan has zero or almost negative interest rates. Investors used this opportunity to find cheap financing and invest in other markets that offer positive returns, such as U.S. Treasuries, stocks and currencies of emerging countries.
These investors are recalibrating their strategies after rising credit costs, which creates short-term uncertainty.
Domino effect shakes global markets
this Japan’s steep decline did not stop there. The US market was also affected Major U.S. indices including the Dow Jones, S&P 500 and Nasdaq 100 opened lower. In itself, Cryptocurrency Market And other risk assets. All of this is happening against a backdrop of greater volatility.
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In addition to the contagion effect, a weak U.S. jobs report heightened concerns about a possible recession as the Federal Reserve stopped short of explicitly cutting interest rates to support the economy.
How to act or invest in such events?
High market volatility can create uncertainty for investments, at least in the short term. It is important to stay informed.
Full skyyes calm: Reacting impulsively may not be the best option. On days like this, it is better to observe what is happening and then make better decisions when volatility decreases and the market starts to provide more clues about where it will go in the coming months.
notifybutt: The best thing to do in this situation is to follow the news and analyze the situation carefully.
remember: In the past 24 years, the market has only fallen every year for 3 years. It is normal to fall for a few days, weeks or even a month. These days of failure may be opportunities in the next few months.
* IOL Investments Online Investment Strategy Manager.
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