Japanese Nikkei Stock Exchange Falls on Slowing Global Economy

Early Tuesday morning, selloffs began across Japan’s Nikkei stock exchange as investors were scared away by more negative reports of the slowing global economy. Eventually, the decline lead to steep fall as the Nikkei 225 index fell approximately 6.4%. A Marketwatch article entitled: “Nikkei sinks below 8000 level; Woodside, HSBC fall,” attributed a large part of the decline to news about the ailing manufacturing sector. In addition, the Bank of Japan announced that “it would accept a broader range of collateral against the provision of liquidity. The new standards will see the bank accept corporate bonds rated BBB or higher, loosened from its previous standard of A-rated or higher.” The measure was the latest attempt from the central bank to help ameliorate the seemingly ever-mounting problems derived from the credit crisis.
The article continues to say: “’Financial conditions in Japan have become less accommodative on the whole, as the financial positions of small firms have deteriorated and an increasing number of large firms have faced a worsening in funding conditions,’ the BOJ said in a statement.”
The drastic swing resulted after a report was released on Monday stating that the US manufacturing sector contracted at an exceptionally fast rate. This is only one of the latest of worldwide developments which has resulted in 6%+ single-day swings in major markets and underscores the continuing fragile, and exceptionally volatile, nature of markets worldwide. Japan in particular has had a rocky quarter, as shown by the Emerginvest Japanese Market

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