WhyItDropped

Nikkei 225 · March 12, 2001

A sixteen-year low

-3.62%

single-day change vs previous close

Part of a longer stretch

The dot-com bust reaches Tokyo

near the end of it · 2000-04-12 → 2001-03-13, -43.27% over the whole period

What happened that day?

  • On 12 March 2001 the Nikkei 225 fell 3.62%, to its lowest since 1985
  • Japanese share prices had gone back sixteen years
  • As the shares banks held fell with the index, their own capital was eaten away
  • Less capital means less lending, less lending means a worse economy, and that pushes prices down again
  • The next session, 13 March, was the low of the stretch
  • A week later the Bank of Japan began quantitative easing — with no room to cut, it increased the quantity of money instead
  • In this stretch the index was 23.25% below its peak

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.