Japan Nikkei Index Records Largest Drop Since February... Falls 3%

Closed at 28,608.59 on the 11th... Largest Drop Since February 26
Inflation Concerns Caused Previous Day's Decline in US Stock Market

On the 11th, a citizen is walking past an electronic billboard showing the Nikkei index falling on a street in Tokyo, Japan. [Image source=EPA Yonhap News]

[Asia Economy Reporter Kim Suhwan] On the 11th, the Nikkei 225 index at the Tokyo Stock Exchange in Japan recorded its largest drop since February. The rise in U.S. long-term Treasury yields amid inflation concerns led to a decline in the U.S. stock market the previous day, which is analyzed to have also affected the Japanese stock market.

On that day, the Nikkei 225 index closed at 28,608.59, down 3.08% (909.75 points) from the previous trading day. The TOPIX index closed at 1,905.92, down 2.37% (46.35 points).

This marked the largest drop since February 26, when it fell 1,202.26 points, and during the session, it plunged to as low as 28,536.35, down about 1,000 points.

The background to the decline in the Japanese stock market is attributed to the U.S. stock market's downturn the previous day due to inflation concerns. The U.S. 10-year Treasury yield rose to 1.607% amid market inflation worries, recovering to the 1.6% level for the first time in five days. Consequently, the Nasdaq index, which is mainly composed of technology stocks, fell 2.5%.

Nomura Securities analyzed, "With many Japanese companies expected to announce earnings this week, investors are hesitant to buy stocks, which has led to a greater impact from the U.S. stock market decline."

Additionally, according to the Nihon Keizai Shimbun, some investment experts view the Japanese stock market as undergoing a correction and estimate it could fall by up to about 10%.