This is an AI translated post.
Japanese Stock Market Plunges, Nikkei Average Drops Over 2,500 Yen...Concerns Over US Economy and Yen Strength
- Writing language: Korean
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Base country: Japan
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- Economy
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Summarized by durumis AI
- The Japanese stock market plummeted due to concerns about a US recession, and the New York Stock Exchange also fell sharply as the US employment data released last weekend missed expectations.
- In particular, if the US employment data suggests a relaxation of labor supply-demand imbalance, yen buying could strengthen further.
- As the yen surges against the dollar, there is a high likelihood of a yen appreciation against other currencies as well. Therefore, it is necessary to be cautious about sudden market fluctuations after the release of the data.
Japan's stock market, which recorded its second-largest decline last weekend, plummeted by more than 2,500 yen on Monday due to concerns over a US recession. The Nikkei 225 Stock Average opened 660 yen lower than the previous weekend and fell by more than 2,500 yen at one point. It is the first time in about seven months that the Nikkei has fallen below 34,000 yen. The release of US employment data last weekend, which fell short of expectations, heightened concerns about a US economic slowdown and led to a sharp decline in the New York Stock Exchange. In the foreign exchange market, the dollar was sold, causing the yen to rise temporarily to the mid-145 yen level against the dollar. This yen appreciation has spread selling of stocks related to exports.
According to the market information page of the Nihon Keizai Shimbun, the Japanese stock market has been showing signs of instability due to concerns about a US recession. In particular, the US employment data released last weekend fell significantly short of market expectations, raising concerns about a US economic slowdown, which led to a sharp decline in the New York Stock Exchange. Federal Reserve Chairman Jerome Powell said that he is "increasingly confident that inflation is moving down to our 2% goal," leading to growing expectations of interest rate cuts in the market.
In this situation, the yen has strengthened against the dollar since the announcement of the US consumer price index (CPI) in June. Reports have emerged that the Japanese government and the Bank of Japan have intervened in the exchange rate, leading to a sharp decline in the dollar and a rise in the yen in the dollar-yen exchange rate.
This employment data announcement comes at a time when the dollar-yen exchange rate is at a turning point, and if the results are different from market expectations, the impact on the market is expected to be significant. In particular, with attention currently focused on weakness in US economic indicators, if this employment data suggests an easing of labor supply-demand imbalances, the yen buying momentum is likely to intensify.
If the yen rises sharply against the dollar, the yen's appreciation against other currencies is also likely to spread, so caution is needed against sharp market fluctuations following the announcement.
