MOSCOW, August 5 The tightening of monetary policy in Japan has become one of the reasons for the outflow of funds from the American market, whose decline is already in a spiral intensified the collapse in Japan, which resulted in a domino effect on stock markets around the world, analysts surveyed believe.
Monday began for investors with a fall in almost all Asian stock markets: the largest collapse was recorded in Japan, where the Nikkei 225 index fell by 13.47%. The Shanghai Stock Exchange index fell by 1.54%, the South Korean index by 8.77%, and the Istanbul index by 6.7%. The MSCI Singapore index fell by 2.9%, and the Hong Kong Hang Seng by 1.6%. Then the collapse spread to Europe, where the pan-European STOXX 600 index fell by 2.3%, and the London FTSE 100 by 2.4%.
< br />«The long-standing difference in rates between the Fed and the Bank of Japan provoked a strategy of trading on this difference: borrow the depreciating yen and buy dollars for the same amount. This went on for quite a long time. Now people have decided that it is no longer interesting and have started to close these positions. This causes a spiral effect: there is an outflow of these funds from the American market, which in turn affects the Japanese market,» they say at Anderida Financial Group.
As Maxim Osadchiy, Head of the Analytical Department of BKF Bank, noted, «the collapse of the Japanese stock market caused a domino effect on a global scale.» Against this background, global markets are seeing a shift away from risk, analysts at Anderida Financial Group agree.
«This is not Armageddon, this is already high volatility — we will see the actions of the US Federal Reserve. Either they will wait for the September meeting to lower the rate, or they will hold an emergency meeting. They could have lowered the rate on July 31, then it would have been calmer,» the company believes.
Osadchiy noted that the impact on the Russian stock market will be relatively weak due to the current sanctions.