WhyItDropped

Nikkei 225 · July 1, 1998

The summer public money was finally discussed

+3.36%

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 1 July 1998 the Nikkei 225 rose 3.36%
  • Parliament had begun seriously discussing putting public money into the banks
  • It was a problem postponed for six years. Recognising the losses would have sunk the banks, so it kept being put off
  • Rescuing banks with taxpayer money is politically unpopular, which is why it took a crisis this deep to be discussed at all
  • No single trigger can be pinned to this day
  • In this stretch the index was 24.98% below its peak
  • The decision came that October — and that moment was the low of the stretch

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.