Nikkei 225 Slumps as Yen's Influence on Tokyo Markets Comes Under Scrutiny
The Nikkei 225 index closed at 64,325.64 on September 2, marking a 2.85% decline from the previous day. This brings the index to 11.11% below its June 25 high of 72,366.34.
A financial expert predicts that the index will reach 63,500 by the end of September and advises selling strength closer to 65,200-65,800 rather than targeting a higher level.
The Japanese government's long-term bond yields reached record highs on September 1, with the 30-year JGB fixed at 4.131% and the 40-year at 4.145%. This development has led some to question whether the yen is still driving Tokyo's markets, amid growing concerns of intervention.
The yield curve has been inverted since 2026, with the 30-year bond becoming a stronger driver than ever before. The expert notes that this change in market dynamics may not be directly related to the recent decline in the equity market, but rather a sign of a larger shift in investor sentiment.