Nikkei drops over 10%

Japan’s stock market entered a confirmed bear market on Monday as Asia-Pacific markets continued last week’s sell-off. The Nikkei 225 and Topix indexes both dropped over 10%, marking a decline of more than 20% since their July 11 highs. Major trading houses, including Mitsubishi, Mitsui & Co, Sumitomo, and Marubeni, saw sharp declines of around 10%. Monday’s drop followed Friday’s significant losses, with the Nikkei 225 and Topix suffering their worst days since March 2020 and in eight years, respectively. Concurrently, the yen strengthened to its highest level against the dollar since January, trading at 143.40. Investors are now focused on upcoming trade data from China and Taiwan, as well as central bank decisions from Australia and India. Meanwhile, China’s service sector showed stronger growth in July, with the Caixin PMI rising to 52.1 from 51.2 in June, driven by new business growth and improved demand.