WhyItDropped

Nikkei 225 · November 4, 2010

The day after the Fed said six hundred billion

+2.17%

single-day change vs previous close

Part of a longer stretch

A rebound that ended at the earthquake

midway through · 2010-08-31 → 2011-02-21, +23.04% over the whole period

What happened that day?

  • The Nikkei rose 2.17% on the day
  • The Fed had announced the night before that it would buy six hundred billion dollars of government bonds — a different tool, since rates could go no lower
  • The effect did not stay inside the US. It weakened the dollar and lifted risky assets everywhere together
  • For Japan it cut both ways: helpful for share prices, but a weaker dollar meant a stronger yen, which kept working against exporters
  • The Nikkei, which had bottomed that summer at a fifteen-year high in the yen, recovered from around here into the following February
  • That recovery was cut off by the earthquake in March 2011

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.