Tokyo Stock Market Plunges, Nikkei Index Temporarily Drops Over 3,100 Points

(Central News Agency, reporter Dai Yazhen, Tokyo, 8th) Affected by better-than-expected U.S. employment data, Tokyo's stock market fell sharply on the 8th, with the Nikkei index temporarily plunging over 3,100 points to 63,406 points, marking the 4th largest intraday drop on record. At the same time, the yen weakened past the 160 yen per dollar level again, and the market is watching whether the Japanese government will step in to stabilize the currency.

According to the Asahi Shimbun, artificial intelligence (AI) and semiconductor-related stocks, which had been driving the market's recent rally, were the hardest hit in this wave of selling. As these tech stocks had already risen significantly, investors were concerned about an overheated market and rushed to take profits after the negative news, leading to a clear decline in share prices.

The trigger for the market turmoil was the U.S. non-farm payroll report for May, released on the 5th. The data showed that the number of new jobs added in the U.S. far exceeded market expectations, further raising expectations that the Federal Reserve (Fed) will raise interest rates again this year. Reacting to this news, major U.S. stock markets closed lower on the 5th, and Tokyo's market opened sharply lower on the 8th.

In addition to the stock market decline, currency market volatility was also significant. With expectations of a potential Fed rate hike, investors bought dollars and sold yen, pushing the dollar above the 160 yen level in the Tokyo foreign exchange market on the morning of the 8th, breaking through a key level closely watched by the market.

Since the 160 yen level has long been seen as a "defense line" for the Japanese government and the Bank of Japan, the yen's fall below this level has increased expectations of official intervention to stabilize the currency.

Market analysts suggest that if U.S. economic data remains strong and the Fed maintains a hawkish stance, global stock markets could continue to face pressure. Whether the yen will weaken further and whether the Japanese government will intervene will be the key focus for the market. (Editor: Wei Shu) 1150608