Japan’s Nikkei 225 stock index plunges 12.4% as investors dump a wide range of shares

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Japan’s Nikkei 225 stock index plunges 12.4% as investors dump a wide range of shares
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TOKYO — Japan’s Nikkei 225 stock index plunged more than 12% on Monday as investors worried that the U.S. economy may be in worse shape than had been expected and dumped a wide range of shares.

Monday’s decline was the second largest percentage loss in a single day and the largest ever loss in terms of points. “The surge in financial market volatility was the result of a perfect storm of macro and market shocks at a time when risk assets were already overbought and overstretched,” BMI, a unit of Fitch Solutions, said in a report. It said the Bank of Japan’s July 31 decision to raise its key interest rate “led to a sharp unwind of the yen carry trade, which added downside pressure on risk assets which were already selling off.

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