WhyItDropped

Nikkei 225 · October 21, 1987

Tokyo the day after Black Monday

+9.30%

single-day change vs previous close

Part of a longer stretch

Black Monday in Tokyo

early in it · 1987-10-14 → 1987-11-11, -21.05% over the whole period

What happened that day?

  • On 21 October 1987 the Nikkei 225 rose 9.3% in a single day
  • New York's Black Monday hit Tokyo the next morning, and Tokyo took it back the day after that
  • The Japanese government and the large brokerages intervened actively to steady the market
  • Japan's economy was in very good shape at the time — trade surpluses were piling up and corporate earnings were strong
  • Low rates had left money everywhere, so there was deep demand to buy the dip
  • That speed was itself a warning. Momentum a crash could not break kept inflating the bubble into late 1989

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.