Tokyo’s Nikkei closes down more than 3pc on slowdown fears | 2019-03-26 | daily-sun.com

Tokyo’s Nikkei closes down more than 3pc on slowdown fears

26 March, 2019 12:00 AM printer

TOKYO: Tokyo’s benchmark Nikkei index dived more than three percent on Monday, as fears grow over a global economic slowdown.

The Nikkei 225 index lost 3.01 percent, or 650.23 points, to close at 20,977.11, while the broader Topix index fell 2.45 percent, or 39.70 points, to 1,577.41.

Tokyo shares opened sharply lower, taking a negative lead from Wall Street, where stocks dropped on Friday after the closely watched yield curve flashed a warning sign that a recession could be looming, reports AFP.

“The Tokyo market sharply reacted to the yield curve inversion, which is a symbolic sign of slowdown,” Daiwa Securities senior technical analyst Hikaru Sato told AFP.

The yield curve, which tracks the spread between short- and long-term rates on US Treasury bonds, briefly inverted on Friday, with yields on three- month bonds falling below those for 10-year notes — the first time this had happened since before the global financial crisis in 2007.

The yield curve has inverted prior to all recessions in recent decades. Masayuki Kubota, chief strategist at Rakuten Securities, said the dovish US Federal Reserve decision last week was a relief for stock markets but “it also alarmed investors as it suggested the global economy is worsening”.

“A 2019 global slowdown has not yet fully been factored in. Recently, data after data show worsening of the global economy,” he said.

 


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