Asian stock markets experienced significant declines on Monday, echoing last week’s global market downturn.
In Japan, the Nikkei 225 dropped a massive 7.3%, and the Topix fell almost 8%, primarily due to fears of a recession in the US sparked by weak jobs data released on Friday.0
The Bank of Japan’s recent interest rate hike has led to a stronger yen, which appreciated by about 9% against the US dollar over the past month. The currency strengthening makes Japanese goods more expensive for foreign buyers, contributing to the stock market selloff, especially for export-heavy sectors like automaking.
Other Asian markets followed suit, with Taiwan’s main share index down 7.7% and South Korea’s Kospi falling 6.6%. In contrast, the Hang Seng in Hong Kong saw a minor dip of 0.2%, and the Shanghai Stock Exchange managed a slight gain.
The market turmoil extended to cryptocurrencies, with Bitcoin dropping to just over $53,000, its lowest since February.
The global selloff began after disappointing US jobs data indicated only 114,000 jobs were added in July, far below expectations. This raised concerns about the potential end of the long-running US jobs boom and increased speculation about Federal Reserve interest rate cuts. High borrowing costs and waning optimism over artificial intelligence (AI) investments have also contributed to the market unease.
The Nasdaq’s 10% decline from its recent peak, marking a “correction,” alongside significant drops in the Dow Jones Industrial Average and the S&P 500, underscored the widespread investor anxiety.
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