Tokyo Stock Exchange Drops 9%... Nikkei Index Falls Over 1,700 Points

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kwon Jaehee] Due to the sharp decline in global stock markets, the Nikkei 225 index in the Tokyo Stock Exchange fell significantly on the 13th, dropping to the 16,800 level. As of 10:10 a.m. that day, the Nikkei 225 index recorded 16,858.66, down 9.16% (1,700.97 points) compared to the previous day. It is the first time in about 3 years and 4 months since November 2016 that the index fell below the 18,000 level during trading hours.

Following the previous day's sharp drop of 9.99% in the U.S. Dow Jones Industrial Average, investors' risk-averse sentiment appears to have deepened.

Additionally, when U.S. President Donald Trump mentioned the postponement of the Tokyo Olympics due to the novel coronavirus infection (COVID-19), negative forecasts emerged that the postponement of the Tokyo Olympics had become a reality, leading to widespread weakness amid concerns over the deterioration of the Japanese economy and corporate earnings.

According to Nihon Keizai Shimbun and NHK broadcasts, the Bank of Japan (BOJ) supplied 500 billion yen to the financial market by purchasing government bonds as the Tokyo stock market plunged that day. A Ministry of Finance official said, "We are carefully monitoring the entire market," and hinted at the possibility of an emergency meeting involving the Ministry of Finance, the Bank of Japan (BOJ), and the Financial Services Agency if necessary. After the Cabinet meeting, Economic Revitalization Minister Nishimura Yasutoshi also stated at a press conference, "Within the government and also between us and the BOJ, we share a strong sense of crisis regarding the impact on the economy."

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