Japan’s stock market took a hit Friday, with benchmark indexes dropping as much as 5%, mirroring a downturn across Asia-Pacific markets following a significant sell-off on Wall Street due to recession fears.
The Nikkei 225, already down 2.62% from Thursday, led regional losses, hitting its lowest point since February before paring back to a 4.56% drop. The broader Topix index followed suit, trading 4.47% lower.
Heavyweights like Softbank Group plummeted over 5%, while trading giants Mitsui and Marubeni fell over 8% and 6%, respectively. Tokyo Electron, a key player in the semiconductor industry, saw a 9% decline.
In the bond market, Japanese government bond yields slipped, with the 10-year JGB yield dropping below 1%, reaching its lowest level since June 20.
South Korea’s Kospi index tumbled 3.19%, dragged down primarily by banking stocks, and the smaller Kosdaq index plunged 3.46%.
However, K-pop stocks bucked the trend, with shares of all four listed K-pop companies rising, led by Hybe following the announcement of its new business strategy.
Australia’s S&P/ASX 200 fell 2.14%, retreating from its record high on Thursday. Hong Kong’s Hang Seng index dropped 2%, and mainland China’s CSI 300 experienced a smaller loss, down 0.66%.
Adding to the regional gloom, South Korea’s July inflation numbers slightly exceeded expectations, with the consumer price index rising 2.6% year-on-year, compared to the 2.5% forecasted by economists.
The Asian market downturn was triggered by Wall Street’s steep decline on Thursday, where recession concerns sent all three major U.S. indexes plummeting.
The Dow Jones Industrial Average fell 1.21%, the S&P 500 shed 1.37%, and the tech-heavy Nasdaq Composite slid 2.3%. The Russell 2000, a small-cap index, dropped 3%.
In the U.S., economic data fueled fears of a potential recession and concerns that the Federal Reserve might be too slow in cutting interest rates.
Initial jobless claims saw their largest increase since August 2023, and the ISM manufacturing index fell to 46.8%, signaling economic contraction.
Consequently, the 10-year Treasury yield dipped below 4% for the first time since February.
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