Japan’s Nikkei 225 and Topix Indices Down: Japan’s Nikkei 225 was trading 7.3% lower, while the Topix was down by almost 8% due to weak US jobs data and a strengthening yen .
Strengthening Yen Impacts Japanese Goods: The yen has strengthened around 9% against the US dollar over the last month, making Japanese goods more expensive and less attractive for potential overseas buyers .
Other Asian Markets Affected: Taiwan’s main share index was down by 7.7%, with chip making giant TSMC more than 8.4% lower. In South Korea, the Kospi index fell 6.6%, with major chip makers including Samsung trading sharply lower .
Hong Kong and Shanghai Markets Less Impacted: The Hang Seng in Hong Kong was down by just 0.2%, while the Shanghai Stock Exchange was up a little . Cryptocurrencies Down: Bitcoin dropped to just over $53,000, its lowest level since February .
US Jobs Data Sparks Recession Fears: Weak jobs data in the US on Friday sparked fears of a recession in the world’s largest economy, leading to a global market downturn .
Asian stock markets plummeted on Monday, following a sharp decline in global markets last week. The downturn was triggered by weak US jobs data, which sparked fears of a recession in the world’s largest economy.
Japan’s Nikkei 225 and Topix Indices Down
In Japan, the Nikkei 225 was trading 7.3% lower, while the Topix was down by almost 8%. The decline was attributed to the strengthening yen, which has appreciated around 9% against the US dollar over the last month. This has made Japanese goods more expensive and less attractive for potential overseas buyers.
Strengthening Yen Impacts Japanese Goods
The yen’s strengthening has had a significant impact on Japanese exporters, particularly automakers. “The selloff was instigated by the sharp appreciation of the yen as global investors turned cautious on Japanese corporate earnings, especially that of exporters such as automakers,” said Kei Okamura, a Tokyo-based portfolio manager at investment firm Neuberger Berman.
Other Asian Markets Affected
The downturn was not limited to Japan, with other Asian markets also experiencing significant declines. Taiwan’s main share index was down by 7.7%, with chip making giant TSMC more than 8.4% lower. In South Korea, the Kospi index fell 6.6%, with major chip makers including Samsung trading sharply lower.
Hong Kong and Shanghai Markets Less Impacted
However, not all Asian markets were affected equally. The Hang Seng in Hong Kong was down by just 0.2%, while the Shanghai Stock Exchange was up a little.
Cryptocurrencies Down
The downturn also impacted cryptocurrencies, with Bitcoin dropping to just over $53,000, its lowest level since February.
US Jobs Data Sparks Recession Fears
The global market downturn was triggered by weak US jobs data, which showed that US employers added 114,000 jobs in July, far fewer than expected. The figures raised concerns that a long-running jobs boom in the US might be coming to an end and drove speculation about when and by how much the Federal Reserve will cut interest rates.
Global Markets Already Worried
Stock markets were already worried about high borrowing costs and unsettled by signs that a long-running rally in share prices, fueled in part by optimism over artificial intelligence (AI), might be running out of steam. Friday’s decline in the Nasdaq brought the index down about 10% from its most recent peak – a fall known as a “correction” – that in this case has happened in a matter of weeks.