Nikkei Volatility Index Soars 13% as Global Rates and Tensions Rise

The Nikkei Stock Average Volatility Index surged to 33.30 on the afternoon of the 18th, up 13% from the previous day, as investors grew increasingly cautious amid rising global interest rates and escalating Middle East tensions.

The index measures how much investors expect the Nikkei Stock Average to fluctuate over the coming month, and it tends to spike during periods of sharp stock declines. On the 18th, it reached an intraday high of 33.32 and a low of 30.63, a daily range of roughly 2.7 points.

The move followed a session in which all three major U.S. equity indexes declined for a second straight day, with uncertainty surrounding negotiations aimed at ending hostilities between the United States and Iran remaining elevated. The U.S. 30-year Treasury yield climbed to 5.31%, its highest level since 2007.

In Japan, expectations of an early rate hike by the Bank of Japan combined with fiscal concerns pushed the yield on newly issued 10-year Japanese government bonds up 2.5 basis points from the previous day to 2.945%, approaching the psychologically significant 3% level.