In a tumultuous day for global markets, Japan’s Nikkei 225 stock index plummeted by a staggering 12.4% on Monday, closing at 31,458.42 points. The broader TOPIX index also experienced a significant drop of 12.8% as selling intensified throughout the day.
The sudden sell-off was triggered by a report indicating a slowdown in hiring by U.S. employers, causing widespread concern about the state of the American economy. This news shattered the recent record highs of the Nikkei, which had soared above 42,000 in previous weeks.
Friday’s 5.8% decline marked the Nikkei’s worst two-day performance in history. The index’s previous record for a single-day drop was set during the infamous “Black Monday” in October 1987, with a plunge of 14.9% or 3,836 points. At one point on Monday, the Nikkei sank as much as 13.4%.
The downward trend in share prices in Tokyo began following the Bank of Japan’s decision to raise its benchmark interest rate last Wednesday. As a result, the Nikkei has now fallen by 3.8% compared to this time last year.