Stock prices in Asian markets plummeted on Monday, with treasury yields falling, influenced by a shift in monetary policy direction from the Federal Reserve. The dollar remained at its highest level in nearly two months. Japanese stocks led the losses in Asian markets, with the Nikkei 225 index falling nearly 4%, marking its largest decline since April 2020, while European and American stock futures also dropped.
Given the high proportion of economically sensitive stocks, the Japanese market faced a particularly hard hit. The decline in shares of "Fast Retailing" and semiconductor equipment maker "Tokyo Electron" had the largest impact on the Nikkei 225 index, which closed down 3.3%. Electronics and chemicals companies were the biggest contributors to the losses in the broader Topix index, which fell by 2.4%, with all 33 industrial groups declining except for one.
Financial stocks also retreated, following a deep drop in long-term U.S. treasury yields, after the Federal Reserve accelerated the expected tightening of its policy last week. James Bullard, president of the St. Louis Federal Reserve, stated in an interview with CNBC on Friday that inflation risks might necessitate starting to raise interest rates next year, indicating the possibility of increasing rates earlier than previously mentioned in the central bank's comments a few days earlier.
