– “It’s A Disaster” – Japanese Stocks Suffer Biggest Point Drop Since Black Monday:
We warned yesterday that the BoJ has boxed itself into a corner – forced to decide between a crashing currency or a crashing stock market – and overnight it appears traders put policymakers to the test to see what their reaction function might be.
Yen strength exacerbated an ugly US session and dragged Japanese stocks down further overnight as Japan’s Topix Index entered a technical correction in its worst two-day rout since 2011…
“The recent strengthening of the Japanese yen coupled with tech sector weakness is poised to significantly impact the Asian stock market,” said Manish Bhargava, a fund manager at Straits Investment Holdings in Singapore.
“Given the substantial weight of tech stocks in Asian indices, disappointing results from tech giants could trigger a broader market downturn in Asian markets.”
So which will the policymakers choose to save?
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