Blitz Bureau
JAPANESE stocks plunged on August 5 in their biggest drop since the 1987 Black Monday sell-off, amid concerns about the global economy and fresh forecasts of a possible recession.
The Nikkei 225, a stock market index for the Tokyo Stock Exchange, shed 12.40 per cent on August 5 , losing 4,451 points, the largest drop in its history. In 1987, the index lost 3,836.48 points, which was the worst previous decline.
The Nikkei share average drop comes as as Friday’s dismal jobs data in the United States heightened worries of a possible recession, and as the yen rallied to seven-month highs versus the dollar.
Japan’s banking stocks led the rout, pushing the Nikkei into bear market territory with a 27 percent drop from its July 11 peak of 42,426.77. From July 11 to Monday’s close of 31,458.42, the Nikkei has wiped out 113 trillion yen ($792 billion) of its peak market value. Japanese Finance Minister Shunichi Suzuki, who told reporters that the government was watching the markets, said that it is “hard to say” what is behind the plunge in the Nikkei. Some major Japanese companies were impacted. Honda Motor Co.
dropped 13.4 per cent, while Toyota Motor Corp fell about 11 per cent. Mitsubishi UFJ Financial Group fell 18.4 per cent, and Tokyo Electron plunged 15.8 per cent, according to Livemint.com.
