A historical market session summarized in one chart
Japan’s stock market posted its worst drop since Wall Street’s Black Monday in 1987, contributing to fears of global turmoil in the markets. Concerns about a slowing U.S. economy and the unwinding of the global yen "carrytrade" are battering stocks. Source: Genuine Impact
The Nikkei's 12.4% decline today was the 2nd largest in its history, trailing only the 14.9% fall during the October 1987 crash.
What happened in the year after the 1987 crash? The Nikkei 225 rose 26.5%. Those who embraced panic were rewarded. Source: Charlie Bilello
JPY FX positioning is finally NET LONG (per GS).
The yen is now free to crash again... Source: www.zerohedge.com, Goldman Sachs
Japanese stocks are now up 9.4% overnight.
They are on track for biggest gain since October 2008 Source: Markets & Mayhem, CNBC
Deutsche Bank: "Why the BOJ has no choice and is merely prolonging the inevitable*
"at a gross balance sheet value of around 500% GDP or $20 trillion, the Japanese government's balance sheet is, simply put, one giant carry trade."
Japan Equities Crash, how significant?
Nikkei 225 lost 20% or more within a 3-week period? 1. 1990: -21%, (February 14 - March 7), asset price bubble plunge in Japan. 2. 2008: -23%, (September 26 - October 16) post the Lehman collapse. 3. 2013: -21%, (May 22 - June 13), economic stimulus panic. 4. 2020: -23%, (February 21 - March 13), the COVID pandemic panic of 2020. Source: Lawrence McDonald, Bloomberg
Almost all Japanese stock gains for 2024 wiped out in 3 days...
Today was an absolute chaos in Japan as stocks plummeted more than 6%, the largest decline in 8 years, and experienced 2 circuit breakers during the session... What will the BOJ save first? The Yen, Japanese stocks or the JGBs (of which they already own 50%)? Source: www.zerohedge.com
India is set to welcome billions of dollars of foreign inflows when JPMorgan adds the country’s sovereign debt to its emerging markets index on Friday
A move that some analysts say will leave it more vulnerable to fickle flows of hot money. The inclusion of India marks the first time the bonds of the world’s fastest-growing large economy have been included in a major benchmark and is the latest move to open up a once closed-off market. It was only in 2020 that India removed foreign ownership restrictions on some rupee-denominated debt. The inclusion of 28 government bonds worth more than $400bn will give India a 10 per cent share of the widely tracked measure, according to JPMorgan. About $11bn has flowed into Indian bonds as investors position themselves ahead of the formal inclusion, according to Goldman Sachs. The bank expects a further $30bn to arrive as the bonds are gradually incorporated into the index over the next 10 months, raising foreign ownership from around 2 per cent to about 5 per cent. Source: FT Link to the article >>>
