WhyItDropped

Nikkei 225 · April 2, 1998

When the package fell short

-3.32%

single-day change vs previous close

Part of a longer stretch

When the banks themselves failed

near the end of it · 1996-06-26 → 1998-10-09, -43.18% over the whole period

What happened that day?

  • On 2 April 1998 the Nikkei 225 fell 3.32%
  • The government was preparing a new stimulus package and expectations had run up
  • The higher the expectation, the further the price falls when the substance disappoints. This day sat inside that pattern
  • Early April is also when the fiscal year turns, so the support that holds prices up for the book close disappears
  • No single trigger can be pinned to this day
  • In this stretch the index was 14.76% below its peak
  • The low of the stretch came that October

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.