Japan is battling one of its sharpest market shocks in years, with stocks, bonds and the yen falling together. The Nikkei plunged over 1,600 points in a single session and has dropped nearly 5.5% across five trading days. The yen weakened to 180 per euro for the first time, while record-high yields on 30-year and 40-year bonds signalled deep investor anxiety. Experts link the selloff to deteriorating China-Japan relations, after comments by Prime Minister Sanae Takaichi raised tensions. Tourism stocks are also sliding as Chinese travellers cancel bookings following Beijing’s advisory. With a massive stimulus package being discussed and debt already above 260% of GDP, Japan faces a tough economic balancing act amid growing geopolitical strain.

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