1. The decline of the Japanese market:
- Japan's Nikkei 225 index fell about 13% on Monday, causing panic and damaging global stock market sentiment.
2. Spread to Asian market:
- JP Morgan warned that the decline could spread to Asian and broader markets, causing "unexpected cracks in the market."
3. Short-term recovery:
- Analysts expressed uncertainty about the short-term recovery, saying a new market structural equilibrium needs to be achieved and some geopolitical risks in the Middle East need to be overcome.
4. Factors causing decline:
- A combination of profit taking, carry trade unwinding, US recession concerns and hawkish messaging from the Bank of Japan caused the decline.
5. Nikkei 225 Recovery:
- The Nikkei 225 rallied on Tuesday and Wednesday, recouping losses on Monday after BOJ officials downplayed plans to raise interest rates.
6. Situation in other Asian markets:
- Other Asian markets also fell sharply this week but did not recover as quickly as Japan. Market sentiment remained under pressure from rising tensions in the Middle East.
7. US Interest Rate Forecast:
- JP Morgan expects the Fed to deliver two 50 basis point rate cuts in September and November, which could fuel some strength in Asian markets in the coming months.
Conclude:
- The sudden decline in the Japanese market has raised concerns about the possibility of spillover to other Asian markets. Although there are signs of recovery, it is still necessary to closely monitor market structure factors and geopolitical risks to assess the outlook in the coming period.
This is for informational purposes only and is not an official document that constitutes investment advice, so please consider your personal financial circumstances before making your investment decision, and note that investing in cryptocurrencies is high risk, so please consider carefully. DYOR!
