Japan's Nikkei stock index on Monday saw its largest single-day rout since the 1987 "Black Monday" sell-offs that precipitated a major recession.

The fall was driven by last week's global plunge in stock prices, which followed bleak jobs data that indicated the US could be heading for recession, sending a shock wave across markets. 

At the end of trading, the Nikkei index shed a massive 12.4%, after dipping as much as 13.4% at one point. For comparison, the biggest single-day drop was 14.9% in 1987. At one point during the sell-off, a "circuit breaker" was triggered to stop trading. 

The rapid fall of Japan's yen against the dollar has also fueled the sell-off, as investors try and sell equities in a mass deleveraging as investors sell assets to fund their losses, Kyle Rodda, a senior financial market analyst at Capital.com in Melbourne, told Reuters news agency.

Japanese Finance Minister Shunichi Suzuki said the government was monitoring markets with "grave concern."

Global markets selling off 

Markets in South Korea and Taiwan also plunged more than 8% each at one point Monday. 

When the US markets opened on Monday morning, the Dow Jones Industrial Average plunged over 1,000 points, with the NASDAQ losing 6%. The S&P 500, meanwhile, decreased 4.2%.  

European shares also fell to a 6-month low in early trading on Monday morning amid US recession fears.

In late July, economists reported that Germany's economy had unexpectedly shrunk in the second quarter of 2024, sparking fears of a larger economic downturn in Europe as well.

Some analysts pointed to the "Sahm rule," which predicts an economy is in the early stages of recession if the three-month moving average of unemployment is 0.5 percentage points above its low over the previous 12 months. That was triggered by Friday's US jobs data.

es/wmr (AFP, AP, Reuters)