Nikkei 225 Plummets in Worst Day Since 2020

Japan's benchmark Nikkei 225 index experienced its worst day since the pandemic selloffs of 2020, dropping nearly 6%, or over 2,000 points. The decline, driven by concerns over interest rates and a strengthening yen, erased significant gains propelled by AI enthusiasm in related sectors.

Japan's benchmark Nikkei 225 index has endured its worst day since the pandemic-triggered selloffs of 2020, plummeting nearly 6% or more than 2,000 points. The index closed at 35,909.70, a level not seen since mid-January, effectively eliminating substantial gains that had propelled it past the 40,000 mark. This surge was previously fueled by enthusiasm for artificial intelligence, which had driven shares in computer chipmakers and other related sectors higher.

The recent decline follows a downturn on Wall Street, spurred by weak economic data and concerns that the Federal Reserve may have missed its opportunity to cut interest rates, thereby jeopardizing economic growth.

Adding to the woes, Japanese shares have been battered after the Bank of Japan increased its benchmark interest rate. The yen's appreciation against the dollar is seen as a potential threat to manufacturers' earnings and a dimming of the tourism boom. Early Friday, the yen traded at 149.07 against the dollar, an increase from 149.37 late Thursday.

(With inputs from agencies.)