The reason for the fall was the decision of the Bank of Japan to increase the key interest rate
The major stock markets in Asia faced a massive drop in the shares of key companies, leading to a decline in indices worldwide. This was reported by WNTab on Monday, August 5th.
In particular, the Nikkei index of the Tokyo Stock Exchange fell by 13%, marking the largest drop since “Black Monday” in 1987, when asset values decreased by 15%.
Experts cite the decision of the Bank of Japan to raise the key interest rate to 0.25% from 0.1% as the main reason for the decline in quotations. This led to the strengthening of the national currency, the yen, but triggered a decrease in export revenues of local companies. Amid the news, their shares began to plummet rapidly.
Moreover, experts expect a recession in the United States, which became an additional factor in the market decline. The reason for such sentiments was the unemployment report in the country, published on August 2nd, which indicated that the rate had risen to 4.3%, the highest in three years. There was a massive sell-off of shares in American companies worldwide.
The state of the Japanese stock exchange triggered declines in other trading platforms. In particular, Taiwan’s Taiex index fell by 8%, South Korea’s KOSPI by 9%, and the Istanbul Stock Exchange suspended trading after falling by 6.72%.
The situation also caused a drop in cryptocurrency assets. Bitcoin, at times, traded below $50,000, showing the largest drop in a day since 2021 – 18%. Other cryptocurrencies also fell in price following the main digital asset.
Previously, WNTab reported that China had reduced its main lending rates to stimulate the economy.
