Nikkei 225 · October 8, 1998
The Yen Surge — Carry Trade Unwind
-5.78%
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?
- 8 October 1998 — Nikkei 225 fell 5.78%
- In currency markets the yen was appreciating dramatically over just two days
- The cause was the aftermath of Russia's default and the LTCM collapse
- Positions funded by borrowed yen were being closed en masse, concentrating orders to buy yen back
- For Japan the surge was unwelcome. The domestic economy was depressed by bad bank loans, and exports — the one part still holding up — were made harder by the exchange rate
- Fell 23.02% from peak
- The structure where a strengthening home currency is bad news for the home market recurs in Japan
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.