Tokyo under pressure after Wall Street's black session

The November 6 session in Tokyo recorded one of the sharpest declines of recent weeks for the Japanese stock market. The Nikkei 225 fell intraday by more than 4,300 points, down to the 56,000-point range, while the mid-session close stood at 57,858.61 points, marking a loss of 3,219.29 points compared with the previous day. By mid-session, more than 90% of the stocks listed on the Prime segment of the Tokyo Stock Exchange were down.

The Japanese slump comes just hours after Wall Street’s negative close on November 5. The Dow Jones lost 1,833 points, or 3.4%, while the Nasdaq Composite shed 5.5%, bringing it 11.9% below the all-time high reached the previous month. It is the kind of session that, given the scale of the decline, quickly spreads to Asian markets opening in the following hours.

The Nasdaq’s decline is not an isolated episode: the technology index entered correction territory after the U.S. midterm elections, with an overall drop of 4.5% that particularly affected technology-related stocks. The correction marks a change of phase compared with previous months, which were characterized by an almost uninterrupted rise in the same stocks.

On the U.S. monetary policy front, the Federal Reserve kept interest rates unchanged in the 3.75% to 4% range, with two committee members in favor of a rate hike. This specific piece of information currently comes from a single source, MarketScreener; no independent confirmation of the breakdown of the internal Fed vote is available in the material collected.

The combination of a session of widespread selling on Wall Street and the immediate knock-on effect on the Tokyo Stock Exchange paints a picture of markets under pressure in the hours immediately following the U.S. midterm elections, with the technology sector at the center of the broader movements on both markets. In Tokyo, the share of declining stocks at mid-session remains the most immediate measure of the extent of the sell-off.