The Nikkei lost almost four per cent of its value today (June 5th) after investors responded negatively to a speech by the Japanese prime minister Shinzo Abe.
A 'third arrow' of monetary policy was confirmed by the country's leader, but some commentators stated he did not go into enough detail about his plans.
The Nikkei slid back to its lowest point in the last two months just a fortnight after it recorded its highest level in five-and-a-half years.
Stan Shamu, market strategist at IG, said in a note: "The comments made by Abe today were not really a game changer and disappointed a market which seems to have been positioned for a USD/JPY and Nikkei rally."
Though the Nikkei responded negatively to the comments made by Mr Abe in his speech, the yen did nudge up against the dollar on the back of it.
Today's losses on the index are in sharp contrast to yesterday's performance, when a two per cent rise was recorded.
Learn about the Asian markets and CFD trading at City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.