When Japan's probusiness Liberal Democratic Party confounded predictions of a tight race and won a resounding victory in the national election early last week, many investors hoped Tokyo's financial markets would celebrate. But the champagne corks never popped. Instead investors watched in distress as the Tokyo stock market suffered one of its biggest declines ever. Falling in four of the five daily sessions last week, the 225-issue Nikkei index plummeted more than 2,500 points, or nearly 7%. Approximately half of the drop occurred on Wednesday alone. The Nikkei closed at 35,890.97, the lowest level since last October.
The steep fall prompted...
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