Asia-Pacific stock markets encounter "Black Monday": Panic spreads triggering circuit breakers

Today, Asia-Pacific stock markets experienced intense volatility, with major indices plunging sharply. Several markets triggered circuit breakers due to excessive declines, drawing high attention from global investors.

The Japanese stock market was hit hardest. The Nikkei 225 index plummeted after opening, with intraday declines exceeding 8%, hitting the circuit breaker threshold. The Topix index also performed poorly, with heavy selling in sectors such as banking and automotive. South Korea's market was not spared; the KOSPI index opened sharply lower and quickly widened its decline, with algorithmic sell orders surging, activating the "Sidecar" mechanism to pause algorithmic trading for the first time in nearly four years. Additionally, markets in Australia, Hong Kong, and Southeast Asia generally recorded declines of 2% to 4%.

Analysts believe that the trigger for this sharp decline was the weak U.S. employment data from last week, which heightened fears of an economic recession in the United States. Meanwhile, the technology sector, led by chip stocks, experienced a collective profit-taking, with Japan's semiconductor-related stocks, which had previously surged, leading the decline. Furthermore, the sharp rise in the yen squeezed profits of Japanese export companies, further amplifying market risk aversion.

As panic spread, funds rushed into government bonds for safety. This "Black Monday" has cast a shadow over the upcoming opening of European and American markets this week.