Japan's Nikkei 225 share index experienced a significant drop of nearly 13% amid concerns over the state of the U.S. economy, prompting investors to offload a wide array of shares. The index plummeted by 12.9% to 31,290.63 during Monday's midafternoon trading session in Tokyo, following a 5.8% decline on the previous Friday. This downturn marks a potential record for the Nikkei, as it is on track for its worst two-day decline in history.
The Nikkei index has witnessed notable single-day plunges in the past, with the most severe being a 14.9% drop, equivalent to 3,836 points, on the infamous 'Black Monday' in October 1987. Other significant declines include an 11.4% fall during the 2008 global financial crisis and a 10.6% dip in the aftermath of the devastating earthquakes and nuclear disasters in northeastern Japan in March 2011.
The recent sell-off in Tokyo's stock market has been attributed to the Bank of Japan's decision to raise its benchmark interest rate last Wednesday. As a result, the benchmark now stands approximately 4% lower than its level a year ago, contributing to the prevailing bearish sentiment among investors.
A wide range of companies bore the brunt of the selling pressure, with notable declines seen across various sectors. Automotive giants Toyota Motor Corp. and Honda Motor Co. saw their shares plummet by 11% and 13.4%, respectively. Tokyo Electron, a prominent computer chip manufacturer, experienced a sharp decline of 15.8%, while financial powerhouse Mitsubishi UFJ Financial Group witnessed a substantial 18.4% drop in its share price.
