Intensifying Yen Rally Sinks Japan Stocks, Rattles Global Market
- Japanese bond yields tumble most since 1999, hurting banks
- Topix index erases a year of gains, enters bear market
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Turmoil in Japan’s financial markets boiled over Monday as the yen extended its rebound against the dollar to about 13% from July’s low and stocks tumbled into a bear market. Yields on benchmark Japanese government bonds slid by the most in more than two decades.
The accelerating moves continued to take investors by surprise, hurting everyone from mom-and-pop traders of shares and currencies to large hedge funds and institutions. The slump in bond yields triggered record declines in the shares of Japan’s three biggest banks, wiping 12 trillion yen ($85 billion) from their market value in the past two trading days, as investors weighed the threat to interest income on lenders.