Nikkei plunges 6% in worst daily session in 4 years

Japan’s Nikkei index plunged about 6% to record its worst session in more than 4 years as investors avoided risky assets, amid fears of a slowdown in the US economy and uncertainty over the path the Japanese central bank will take regarding monetary policy.

The Nikkei index closed down 5.8% at 35,909 points, its lowest closing level since January 26, and it is also the biggest daily decline since March 2020.

The broader Topix index fell 6.1% to 2,537.6 points in its biggest daily decline since March 2020.

The losses in the Japanese indices coincided with a broader decline on Wall Street. After data raised concerns that the economy is slowing faster than expected while the US Federal Reserve maintains its tightening of monetary policy.

The Bank of Japan raised interest rates this week to 0.25%, and the bank’s governor, Kazuo Ueda, did not rule out another increase this year, prompting expectations of a rate hike to 0.5% by the end of the year and 0.75% in April.