WhyItDropped

Nikkei 225 · July 11, 2016

Stimulus hopes the day after the election

+3.98%

single-day change vs previous close

Part of a longer stretch

Two and a half years the world rose together

early in it · 2016-02-12 → 2018-10-02, +62.32% over the whole period

What happened that day?

  • On 11 July 2016 the Nikkei 225 rose 3.98%
  • Japan had held upper house elections the day before and the ruling party won comfortably
  • The reasoning spread that a large stimulus package would follow. One duly arrived that August
  • The index had fallen hard on the Brexit shock, so the retrace was large too
  • When politics settles, policy becomes predictable — which means the market can price it
  • In this stretch the index was 14.91% below its peak
  • This bounce was part of the run that carried to October 2018

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.