Nikkei 225 · March 5, 2007
The week the borrowed yen came home
-3.34%
single-day change vs previous close
Part of a longer stretch
Four years off the bottom
near the end of it · 2003-04-28 → 2007-07-09, +140.04% over the whole period
What happened that day?
- March 5, 2007 — the Nikkei 225 fell 3.34% to 16,642.25. No single cause for the day could be pinned down
- It started a week earlier with a one-day collapse in the Chinese market, and the flight from risk spread worldwide
- Japan took it hardest because of the currency: the trade of borrowing cheap yen to buy assets elsewhere was unwinding, and the yen shot up
- A stronger yen cuts exporter earnings, and the further the unwind runs the stronger it gets. The pressure only goes one way
- It was the fifth straight decline, the lowest close since December 12, 2006, and the second largest one-day fall of the year
- From February 26 to March 5 the episode ran -8.64% — all of it inside seven days
- The index recovered by summer, then met a bigger fall in August
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 put together from the public record; where a specific source was consulted it is listed above.