Investing.com– Asian stocks fell sharply on Monday, extending last week’s losses amid growing fears of a U.S. economic slowdown, with Japanese markets set to enter a bear market from their July record highs.
Markets tracked a slump in Wall Street on Friday, after substantially weaker-than-expected nonfarm payrolls data ramped up concerns that the Federal Reserve will keep interest rates high for too long for the economy to see a soft landing. Other middling economic readings through the week and mixed earnings from heavyweight technology stocks also battered U.S. markets, providing weak cues to regional stocks.
U.S. stock index futures fell further in Asian trade on Monday.
Japan’s Nikkei, TOPIX eye bear market
Japan’s Nikkei 225 slid 5.5% on Monday, while the broader TOPIX plummeted nearly 7%. Both indexes were now trading more than 20% down from record highs hit in July- setting them up to enter a bear market if they closed at current levels.
Japanese stocks were battered by a mix of heavy profit-taking- with foreign investors pulling out en-masse as the Japanese yen appreciated sharply.
This trend was spurred by hawkish signals from the Bank of Japan, after the central bank raised interest rates last week and flagged more potential hikes in 2024.
Middling earnings from heavyweight automaker Toyota Motor (NYSE:TM) Corp (TYO:7203) set a dour tone for Japanese markets, with a slew of key earnings from the country due this week. Sony Corp (TYO:6758) and SoftBank Group Corp. (TYO:9984) are set to report in the coming days.
