May 16, 2021

Nikkei Dives More Than 4 Percent

HONG KONG — The battered Japanese stock market lurched into bear market territory Thursday, after a tumble of 4.5 percent took the combined decline in the Nikkei 225 index since May 23 to more than 20 percent.

By early afternoon in Tokyo, the Nikkei 225 hovered around 12,680 points, about 20 percent below a high of nearly 16,000 reached in intraday trading three weeks earlier.

The drop on Thursday was one of many sharp declines seen in recent weeks, since a feverish six-month rally in Japanese stocks — incited by optimism over the government’s aggressive efforts to reinvigorate the listless economy — came to an abrupt end.

The Nikkei 225 soared more than 80 percent between mid-November and mid-May, but staged a sudden about-face with a 7.3 percent plunge on May 23.

Sentiment has been fragile and trading volatile ever since, as investors have taken stock of the challenges that face “Abenomics,” the economic policies of Prime Minister Shinzo Abe, and weighed the pros and cons of taking profits after the rally.

But factors beyond Japan also have come into the fray, and helped send markets lower around the world.

In China, which is a key engine of global growth, the flow of economic data in recent weeks has reinforced the picture of an economy that is struggling to regain momentum.

And in the United States, comments on May 22 by Ben S. Bernanke, the chairman of the U.S. Federal Reserve, that he and his colleagues might consider paring back their bond-buying programs “in the next few meetings” if the economy is showing signs of improvement have helped fan global nervousness. Investors and analysts, meanwhile, have struggled to assess the possible implications of even a small withdrawal of the bond buying that has supported markets in recent years.

The concerns about the “tapering” of U.S. stimulus measures have sent stocks lower around the world. In the United States, the Dow Jones industrial average and the S. P. 500 have sagged 3.2 percent and 4 percent, respectively, in the past three weeks. The DAX in Germany has fallen about 4.5 percent and the CAC 40 in France has dropped more than 6 percent.

Key markets in the Asia-Pacific region have tumbled even more.

The Straits Times index in Singapore and the Hang Seng in Hong Kong have both shed more than 10 percent since May 22, and in Australia, the S.P./ASX 200 has sagged more than 9 percent.

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