From Nikkei Asia, August 5:
Japan stocks dive 4,451 points, more than Black Monday in 1987
Yen surges to 141 per dollar as potential U.S. recession spooks investors
Japan's benchmark Nikkei Stock Average recorded its worst-ever daily sell-off on Monday, losing 4,451.28 points from the previous day's closing amid panic selling triggered by fears of a possible U.S. recession and the yen's strength.
The average closed down 12.4% to 31,458.42. By percent, it was the second-largest fall since the Black Monday crash of October 1987, when the index lost 3,836.48 points (14.9%), which had been the worst previous decline.
Stocks have been on a downward spiral since Thursday, a day after the Bank of Japan aggressively raised rates to 0.25% from 0.1% and said it was open to more hikes this year. The Nikkei average shed 3.5% on Thursday. The following day the index lost 5.8%, or 2,216.63 points, marking its second-worst daily sell-off.
"We are monitoring the market with concern, in cooperation with the Bank of Japan," Finance Minister Shunichi Suzuki told reporters after the market close. "Even amidst market volatility, including dips in market prices, we urge everyone to make calm judgments, taking into account the importance of long-term, accumulated, diversified investments," he said.
Foreign investors are selling Japanese stocks due to concerns that the U.S. may be heading for a recession, said Naka Matsuzawa, chief strategist at Nomura Securities. "The fall is not really happening due to Japan-specific reasons," he said. "Markets are still trying to find the bottom."
He said he is taking a "wait-and-see approach until U.S. tech stocks show some kind of resilience." He does not foresee a global recession, and said markets will be volatile until the U.S. Federal Reserve lowers rates. Investors are pricing in a cut by September....
....MUCH MORE
Their comment on Japanese financial stocks probably has Warren Buffet licking his lips in anticipation:
....Japanese megabanks plummeted, with Mizuho Financial Group down by 19.7%, Mitsubishi UFJ Financial Group by 17.8%, Resona Holdings by 19.5% and Sumitomo Mitsui Financial Group by 15.5%....
Yikes!
