Nikkei Index Drops Up to 3% Early in Session Due to "US Interest Rate Hike Concerns"

On the 16th, a citizen is passing in front of the Nikkei 225 index display board on a street in Tokyo, Japan. [Image source=AP Yonhap News]

[Asia Economy Reporter Kim Suhwan] As the U.S. Federal Reserve (Fed) recently moved up the timing of interest rate hikes to 2023 at the Federal Open Market Committee (FOMC) regular meeting, signaling the spread of tapering discussions, the decline in the Japanese stock market is intensifying.

On the 21st, the Nikkei Index in Japan recorded 28,124.23 at 9:30 a.m., down about 3% compared to the previous trading day, falling more than 800 points.

The TOPIX index in Japan also recorded 1,908.78, down 2% from the previous trading day.

This is analyzed as reflecting market concerns following the recent acceleration of the timing of the U.S. interest rate hike due to inflationary pressure worries.

Earlier, on the 16th (local time), according to the dot plot released after the Fed's FOMC meeting, 13 out of 18 FOMC members expected an interest rate hike in 2023.

Considering that in the dot plot announced at the March FOMC meeting, 7 members expressed the possibility of a rate hike in 2023, the timing of the rate hike has been moved forward.

In particular, the FOMC warned, "If inflationary pressures increase further, interest rates could be raised as early as the second half of 2022."

As a result, the U.S. Dow Jones Industrial Average recorded a decline for five consecutive days.

Takashi Nakamura, Chief Strategist at Tokai Tokyo Research Center, diagnosed that with concerns over interest rate hikes reflected, "the volatility of the stock market is increasing."

This content was produced with the assistance of AI translation services.