The Asian Market Situation Today, 6th August 2024

This is the ‘day after’ of Black Monday in August 2024. The worldwide financial markets were in turmoil. Top performers like Apple. Nvidia, and Amazon were all down, some in double digits. There are fears of an armed conflict, involving Israel and Iran. This could potentially lead to WWIII. The Asian market took center point in this turmoil. 

We saw the biggest 2-day drop for the Nikkei in history. South Korea halted trading altogether. So, how is the situation in the Asian market today?

The Japanese Market

In the Asian market, the Japanese financial market took the hardest hit. On Monday, the Nikkei 225 Index fell 12.4%. That was the largest drop ever since the Black Monday 1987 event. It also lost 4,451.28 points on the index. This was the largest point loss in its history. It had already fallen by 5.8% on last Friday. 

At the basis of all this, is the BOJ to hike interest rates by 0.25%. That was the first rise in interest since 2007. This affected the Yen carry trade. For an explanation on this carry trade, read our article. However, this resulted in the worldwide crash of financial markets. 

The unwinding of this Yen carry trade caused a reduction in global liquidity. For example, it hit hard on the US Treasuries and crypto markets. It also impacted the US stock market and European markets.

On Friday, the Yen surged 4.7% against the USD. It topped yesterday. However, it seems like it is returning to weekend levels again. The BOJ is also taking further action. It wants enough U.S. dollar liquidity in the Japanese financial system. This measure can stabilize the market. Read this explanation by @JarekPiotrowski on X.

Source: X

But where does that leave the Japanese market today? Well, there’s good news. The Nikkei 225 index recovered by 10.4% at the time of writing. In index points, that’s 3.278.34 points. That means that it almost wiped out yesterday’s losses. It was the best day since October 2008 for the Nikkei index. See the picture below:

Source: Reuters

The Korean Market

The Korean market dipped 8.77% yesterday. That’s the KOSPI Index. At 2.14 pm Seoul time, it activated circuit breakers. This halted trading for 20 minutes, to prevent panic selling. These circuit breakers get activated when stocks have an 8% or more rise or fall. However, today, the KOSPI Index recovered by 3.30% at the time of writing.

Another issue to keep an eye out for in South Korea is the Avail situation. During its Bithumb listing, there’s a suspected price manipulation. The South Korean authorities are looking into this. As a result, we may see fewer listings on Korean crypto exchanges for a while. The picture below shows the current KOSPI Index situation.

Source: Yahoo Finance

Other Markets in the Asian Market

In the Asian market, there were various results, yesterday, and today. Here are some of the most important players in the Asian market. For instance,

• Taiwan — The TSEC weighted index in Taiwan was down over 8% yesterday. Today it already clawed back 3.38%.
• Hong Kong — The Hang Seng Index was down only by 1.62% at the end of their trading day. However, this index is already in decline since mid-May 2024. Nonetheless, the index seems flat today.
• China — The Chinese CSI 300 Index dropped 0.74% over the last 5 days. So, this index seems stable compared to the surrounding mayhem.

Conclusion

Certain markets in the Asian market were in distress yesterday. For example, the Japanese, South Korean, and Taiwanese financial markets experienced serious drops. In contrast, the Hong Kong and Chinese markets seemed flat in comparison. Today we also saw a recovery in the affected markets. All three affected markets were bouncing back. 

Disclaimer

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