If the Japanese thought they could avoid the global market meltdown by taking a day off this week, they were very, very wrong.
Before a one-day public holiday on Thursday, the benchmark Nikkei-225 had already hit its lowest point since October 2014, when the Bank of Japan sparked a big stock rally with a wave of monetary stimulus.
On Friday, Tokyo stocks finished off a disastrous week by taking another dive. The Nikkei-225 dropped 4.84% to bring the total decline for the holiday-shortened week to 11%. The broader Topix index sank 5.43% to post a 12% loss since Monday.
This week’s global rout was sparked by comments from US Federal Reserve Chair Janet Yellen. Yellen said she expects to keep raising US interest rates this year, even as global financial conditions increase the risk to the US economy.
But Japan, in particular, has its own issues. With the yen getting stronger in the wake of the Bank of Japan instituting negative interest rates late last month, many fear the central bank may intervene in the market for the first time since 2011 after Japanese officials to say they would take “appropriate counter-measures.”