Japanese stock futures trading was briefly suspended Monday morning local time due to a circuit breaker. This came after the Dow Jones and S&P 500 Futures fell 4% each amid fears of a ‘Black Monday’ on April 7. In early trade in Tokyo, the Nikkei 225 was off 7.35%, adding to a 2.75% drop on Friday, while in Seoul the Kospi was off 4.8%.
The global stock market wipeout follows US President Donald Trump’s ‘Liberation Day’ tariffs announcement on Wednesday. The Dow has posted back-to-back losses of more than 1,500 points for the first time ever. It fell by 2,231 points on Friday.
Read More: Dow Jones Futures tumbles 1500 points, Russell 2000 down 7% amid Black Monday fears
China’s CSI300 blue-chip index fell 4.5%. Hong Kong’s Hang Seng index was down 8% in early trade.
What does a circuit breaker mean?
The suspension of Japanese stock futures trading due to a circuit breaker indicates that the market has experienced a significant price movement—either a sharp decline or a rapid rise—triggering an automatic mechanism designed to halt trading temporarily.
This is a regulatory measure used by stock exchanges, such as the Japan Exchange Group (JPX), which oversees the Tokyo Stock Exchange, Osaka Exchange, and Tokyo Commodity Exchange, to prevent panic selling or buying and stabilize the market during extreme volatility.
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The suspension allows investors and traders a ‘cooling-off’ period to reassess their positions, absorb new information, and then make a decision to avoid a potential free fall or bubble.
Black Monday coming?
Market analyst Jim Cramer, on his CNBC show, warned investors about a Black Monday-like situation on April 7. The Harvard graduate and TheStreet founder said that markets could experience a carnage like the one in 1987 when Dow Jones crashed 22.6% in a single trading session.
“If the president doesn’t try to reach out and reward these countries and companies that play by the rules, then the 1987 scenario… the one where we went down three days and then down 22% on Monday, has the most cogency,” he said. “We will not have to wait too long to know. We will know it by Monday.”
