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Nikkei hits lowest point since August as yen surges amid U.S. economic worries

The Nikkei Stock Average and the Tokyo Stock Price Index (TOPIX) both recorded their largest declines since August 5, a day marked by significant global market volatility. This latest selloff was precipitated by the Institute for Supply Management’s (ISM) report on August’s manufacturing activity, which revealed a contraction for the fifth consecutive month, falling short of market expectations. Particularly hard-hit were technology stocks in the U.S., including Nvidia, which saw its shares plummet, erasing $278.9 billion in market value—an unprecedented drop for a single U.S. stock.

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Japanese stock market rebounds as Nvidia’s impact wanes; medium-term bonds in favor

Nvidia’s earnings report, released early on August 29 Japan time, revealed a forecast for the third quarter (August-October) that fell short of market expectations. This miss triggered a steep decline of over 8% in Nvidia’s shares during after-hours trading on U.S. markets. The company's forecast, coupled with issues related to new chip developments, initially spurred a sell-off in Japanese semiconductor stocks. However, the impact was mitigated by Nvidia’s stronger-than-anticipated second-quarter results, which helped to stabilize Japanese stocks related to the semiconductor sector. Additionally, gains in insurance and shipping stocks provided further support to the market.

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Nikkei stock average rebounds on weaker yen and technology boost

During the trading session, the Nikkei surged by over 2% before settling at its final figure. The broader Topix index also experienced gains, rising 1.1% to end the day at 2,670.54. The upward movement in the Nikkei was driven by domestic tech stocks tracking their U.S. counterparts higher, contributing to the overall positive performance of the benchmark index.

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Tokyo stock market plunges in historic sell-off amid U.S economic concerns

The dramatic downturn followed the release of disappointing U.S. jobs data for July, which revealed nonfarm payrolls significantly below market expectations and an increase in the unemployment rate. The weak data triggered concerns about a potential hard landing for the U.S. economy, spurring a global sell-off in equities. On Friday, the Dow Jones Industrial Average had already experienced its largest decline of the year, closing down 610 points.

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