By Natalia Rueda 
The collapse of Asian markets
The world’s stock markets have been hit by a seismic wave of uncertainty, originating in Asia’s economic superpower: Japan. In the biggest single-day drop ever recorded, Japan’s Nikkei 225 index, which consists of Tokyo’s leading stocks, lost 4,451 points. This 12% drop its second largest fall in 37 years.
Similar losses were seen in other Asian markets, with South Korean and Taiwanese indices experiencing drops of more than 10% at times evoking a sense of economic despair across Asia.
The ripple effect in Western markets
The effects of the crisis were felt around the world, as major U.S. indices also recorded a significant drop. This reflected growing fears of a possible recession in the U.S. economy. However, it is not only domestic concerns that are to blame for this fall, but also the recent strengthening of the Japanese yen, which has made matters worse.
The impact of what happened in Asia was widely followed by investors and experts around the world. The massive sell-off in the markets has also led to a drop in U.S. government bond yields, leading to speculation that the Federal Reserve (Fed) may be forced to take drastic measures such as cutting interest rates sharply to keep the economy in balance.
U.S. Unemployment Rate Rising
Recently released data indicates an increase in the unemployment rate to 4.3%. This is generating considerable concern and critical debate, with some fearing an imminent market collapse and a possible descent into recession.
Crypto collapses
The cryptocurrency market did not escape the recent wave of massive sell-offs. The value of bitcoin, which had reached an all-time high in March, plummeted by more than a third, marking its biggest decline since November 2022. This has raised doubts about its reputation as a safe-haven asset, as it has shown an increasing correlation with global equities. Similarly, ether, the second most relevant cryptocurrency, suffered a 21% drop, reaching its lowest level since January.
The wave of selling in Asian financial markets is a warning sign of the fragility of the global economy. It highlights the interconnectedness of financial systems and the far-reaching consequences of economic decisions made by major players such as the US Federal Reserve.