Investing.com– Japan’s Nikkei 225 and TOPIX indexes closed up more than 13% each on Monday, with both indexes falling into bear market territory, erasing all their gains through 2024 .
The closed 13.5% lower at 31,078.0 points, while the decreased 12.2% at 2,227.15 points. Both marked their weakest closes since November and fell more than 25% each from the all-time highs reached in July.
The losses in Japanese markets were part of a broader phase of risk-off in global markets, which was initially triggered by a series of weak US economic data that raised fears of a recession. .
But Japanese markets were particularly hard hit by the fall, especially after the Bank of Japan unexpectedly raised interest rates in a hawkish attitude.
The prospect of increased monetary tightening has canceled out most of the recent gains of Japanese markets that began to predict an increase in the value of the currency and less favorable economic conditions in the country.
The price rose sharply on this view, putting additional pressure on Japan’s export-oriented stocks, which make up the majority of Nikkei and TOPIX valuations.
The yen was also supported by demand for safe haven assets, while a sell-off characterized Asian markets in general.
Profit taking in technology stocks, in the context of difficulties for artificial intelligence, also puts Japanese markets under pressure.