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Today (Friday), the most notable stock market crasher isn't just one stock – it's the Nikkei 225 index, Japan's benchmark.
The Nikkei came crashing down 488.32 points Friday to 14,327.66, for a 3.30% loss. That marks its lowest close since Feb. 14. Japan's broader index followed suit – the Topix of all First Section issues on the Tokyo Stock Exchange fell 38.76 points, or 3.22%, to 1,164.70. All in all, Tokyo ended the week down more than 6%.
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Here's the main force behind the Tokyo stock market dive…
Ukraine Uncertainty Rattles Markets Today
Russia is in a firm standoff with the West over its occupation of Ukraine.
The United States and the European Union (EU) have said they will impose sanctions should Russia continue aggressing; likewise, Russia has said it will impose sanctions on the United States and EU.
Last Thursday, the regional parliament of Crimea voted unanimously to become part of Russia.
This Tuesday, it voted that the Black Sea peninsula will declare itself an independent state if its residents agree to split off from Ukraine and join Russia in a referendum.
A referendum is set for this coming Sunday, and residents will have two choices on the ballot regarding whether to join Russia: "yes now" or "yes later." "No" is not an option, and both choices ultimately yield the same result; it's just a matter of immediately joining Russia, versus first declaring independence, and then joining Russia.
Investor sentiment in Japan today was a reaction to these geopolitical concerns.
Specifically, the Nikkei's tumble came as the latest developments in the Ukraine sent the safe-haven yen soaring against both the euro and the dollar.
"Investors are unwinding their long positions in the Nikkei and short positions in the yen," BNP Paribas head of global equities and commodity derivatives Kyoya Okazawa said to The Irish Times today.
Toyo Securities Co. strategist Hiroaki Hiwada noted that investor jitters were mounting ahead of Sunday's referendum in Crimea, according to Shanghai Daily. He said market players are still guessing as to the exact level issues will continue to fall.
Japanese markets aren't alone in taking a fall from the Ukraine. Hardest hit today was Moscow's MICEX index, which was down over 5% – its lowest point since 2009.
Wall Street additionally suffered similar woes this week. The Dow Jones Industrial Average has dropped 360.4 points, or 2.19%, since Monday. The S&P 500 is down 27.3 points, or 1.46%, since Tuesday, and the Nasdaq fell off 86.41 points (1.99%) since Tuesday.
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- The Irish Times:
Heightened Tensions over Ukraine Send Stocks Down
- Shanghai Daily:
Nikkei Plunges 3.30 pct on Yen's Rise as Ukraine Crisis Heats Up