Panic as Japan stocks take biggest dive since Black Monday, 1987
Aug 6, 2024
If it was panic last Friday, the Asahi Shimbun declared when the stock market fell more than 2,200 points, or 5.8 percent. It was double panic by this afternoon (Monday) when the market fell even more, by 3,800 points to the 31,000 mark.
Reasons were various. The fall in the US Dow last week had its predictable knock-on effect on Japanese stocks. Concerns over the US economy, manufacturing indicators especially, caused the yen to strengthen suddenly, by more than 6 percent, hurting Japanese exports. And in both countries there was a sudden realisation that the boom in AI stocks, Nivida or Microsoft for example, had gone too far.
From its peak of 42,224 yen on July 11 this year the market has fallen, at first gradually and now precipitously, more than 10,000 points. At closing this afternoon it registered 31,200 points.
There is a symbolism in this 30,000 plus level. It marked the peak for the crazy stockmarket levels reached at the end of the 1980’s Bubble economy, when all in Japan seemed to believe land prices, and therefore stock prices, would rise forever — Japan as Number One.
It subsequently fell to 7,000 points, thanks in part to mistaken austerity policies.
Now we have had the 40,000 mark reached, and again collapse
This stock market crash will not match what we saw in the 1990s. But both reflect the intense volatility of booms and busts, Japanese style.
Australia could now well face two economies suffering bad indigestion – China, as it tries to recover from its absurd building boom and now Japan.
For more on this topic, P&I recommends:
Gregory Clark was the first postwar Australian diplomat trained in Chinese, with postings to Hong Kong, Moscow and the UN before retiring in protest against the Vietnam War. After PhD studies at the ANU he became Japan correspondent for The Australian. A spell in Canberra’s Prime Ministers department led to professorships at Tokyo’s Sophia University and emeritus president of Tama University, Tokyo, before becoming co-founder of the very successful English language Akita Kokusai Daigaku. He has now retired to Latin America (Peru) and Kiwi fruit growing in Boso peninsular south of Tokyo.
His works include ‘In Fear of China’ (1969) and several books in Japan on education and foreign policy.
He used to speak Chinese and Russian with fluency. He now speaks Japanese and Spanish.
Contributions to Pearls and Irritations
Your contribution will fund quality independent comment and analysis in Pearls and Irritations
Contribute
