Japanese Stock Exchange Drops 3%, The Japanese stock exchange, Topix Index, was recorded to have fallen 3% in Monday’s trading. The weakening occurred when the market expected the Bank of Japan (BOJ) to raise interest rates.
The Topix index fell 3.1% to 2,642.31 at 13:51 Tokyo time with 32 of 33 sub-sectors experiencing declines. The exporter-dominated Nikkei fell 3% to 38,504.53, the biggest drop in Asia. The Topix index weakened in yesterday’s afternoon trading by more than 3% as speculation increased that the Bank of Japan would soon raise interest rates, which strengthened the yen and hurt exporter shares.
Technology shares fell sharply, tracking index declines in the United States as investors took advantage of some of the best performances in the past year.
Automotive companies such as Toyota Motor Corp. made the largest contribution to the decline in the Topix Index, with a decline of 4.4%. Of the 2,150 stocks in the index, 169 rose and 1,944 fell, while 37 were stagnant.
Japanese Stock Exchange Drops 3%, Semiconductor companies including Renesas Electronics Corp. fell after US technology stocks such as Nvidia Corp. fell due to profit taking. The Philadelphia Semiconductor Index fell 4% on Friday.
The BOJ is expected to make policy adjustments at its March 18-19 meeting, reinforced by reports that the bank is considering eliminating its yield curve control program. Additionally, the number of policymakers leaning towards ending negative interest rates is increasing.
Monday’s data showing Japan’s economy managed to avoid recession at the end of last year also strengthens the argument for the BOJ raising interest rates for the first time since 2007.