WhyItDropped

Nikkei 225 · November 4, 1998

After the public money was decided

+4.12%

single-day change vs previous close

Part of a longer stretch

The IT rally

early in it · 1998-10-09 → 2000-04-12, +61.75% over the whole period

What happened that day?

  • On 4 November 1998 the Nikkei 225 rose 4.12%
  • That October, parliament had passed the law putting public money into the banks — a decision postponed for six years
  • 9 October had been the low of the stretch. The decision and the bottom arrived together
  • Recognise the losses, add capital, and banks can lend again. Money circulating is the precondition for recovery
  • The US Fed was also cutting three times in this period, lifting markets everywhere
  • No single trigger can be pinned to this day
  • The rise that started here ran to April 2000

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.