Japan’s Nikkei 225 index experienced a dramatic decline of over 12% on Monday, as fears grew over the potential deterioration of the U.S. economy, leading investors to sell off a broad range of stocks.
The Nikkei 225 fell by 4,451.28 points to close at 31,458.42. Following a 5.8% drop on Friday, the index has now recorded its steepest two-day decline ever, plummeting 18.2% in just the last two trading sessions. At its lowest point during the day, the index had sunk by as much as 13.4%.
Historically, the Nikkei’s most significant single-day decline occurred on October 19, 1987, with a 14.9% drop, known as “Black Monday.” Other notable declines include an 11.4% fall in October 2008 during the global financial crisis and a 10.6% drop in March 2011 following major earthquakes and nuclear disasters in northeastern Japan.
The recent turmoil follows the Bank of Japan’s decision to raise its benchmark interest rate last Wednesday. This adjustment has led to a rate that is now approximately 3.8% lower than it was a year ago.
The broad-based sell-off affected a wide range of companies. Shares of Toyota Motor Corp. fell by 11%, while Honda Motor Co. saw a 13.4% drop. Tokyo Electron, a major computer chip manufacturer, experienced a 15.8% decline, and Mitsubishi UFJ Financial Group plunged by 18.4%.
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