Markets

Japan’s Nikkei Stock Average Ends with Biggest Gain after Record Loss Day Before (UPDATE 1)

Yomiuri Shimbun file photo
Tokyo Stock Exchange

Jiji Press

15:24 JST, August 6, 2024

Tokyo (Jiji Press)—Japan’s Nikkei 225 stock average marked its biggest-ever single-day point rise on a closing basis Tuesday, after ending with a record loss the day before.

The key index gained 3,217.04 points, or 10.23 pct, from Monday to end Tuesday’s session at 34,675.46, with the point gain far exceeding the previous record one-day climb of 2,676.55 points logged on Oct. 2, 1990. The Nikkei rose for the first time in four market days.

Following the Nikkei’s biggest drop of 4,451.28 points Monday, investors in the Tokyo market rushed to buy back a wide range of stocks Tuesday. The wave of buying helped the Nikkei surge over 3,400 points at one point in the morning.

The Tokyo Stock Exchange implemented its circuit breaker rule for the second straight day to halt stock index futures trading temporarily after they rose by the predetermined threshold of 8 pct or more.

Affected by drops in stock markets worldwide Monday, including the Nikkei average’s historic plunge, all three key U.S. stock indexes plummeted as well the same day.

Despite the less-than-ideal market environment, the Nikkei on Tuesday recouped part of the previous day’s plunge that “reflected an overreaction by market participants,” an official from a midsize securities firm said. The Nikkei recouped about 70 pct of Monday’s loss.

Investors’ buying appetite was also fueled by the dollar’s sharp rebound. Market participants moved to buy back the greenback against the yen following the U.S. unit’s precipitous fall on Monday.

At 3 p.m., the U.S. currency stood at ¥145.85-85 , up from ¥143.46-47 at 5 p.m. Monday. The dollar slumped below ¥142 briefly on Monday for the first time since early January.