Japanese Stocks Plunge into Bear Market on Yen Surge, US Recession Fears

Japanese stock markets experienced a significant decline, with the Topix and Nikkei 225 indexes dropping over 20% from their recent highs. This downturn, pushing both benchmarks towards a bear market, is attributed to a strengthening yen, tighter monetary policies, and concerns about the US economy. The yen`s surge, driven by investors unwinding carry trades, particularly impacted Japanese exporters. Additionally, declining global bond yields, particularly US Treasury yields, fueled the sell-off, impacting even sectors like banks that were expected to benefit from rising rates. This widespread market anxiety has led to a rapid unwinding of positions, amplifying the market decline.