WhyItDropped

Nikkei 225 · August 11, 1997

The summer the currency crisis spread

-3.98%

single-day change vs previous close

Part of a longer stretch

When the banks themselves failed

midway through · 1996-06-26 → 1998-10-09, -43.18% over the whole period

What happened that day?

  • On 11 August 1997 the Nikkei 225 fell 3.98%
  • In July, Thailand had given up defending its currency and the baht collapsed. That is where the crisis began
  • By August it had spread to Indonesia and Malaysia, each abandoning its defence in turn
  • Japan fell hard because of its banks, which had lent heavily across Southeast Asia
  • If that lending went bad, already fragile bank books got worse
  • In this stretch the index was 27.07% below its peak
  • By the end of the year the crisis reached Korea and Japanese financial institutions were failing

Sources

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.