The Nikkei Average Volatility Index (Nikkei VI) fell sharply from the previous day. Although the decline was limited during trading hours, it widened again toward the close, as the market remained alert to persistently high crude oil prices and rising long-term interest rates.
The Nikkei VI fell 7.81 points from the previous day to 20.30. It traded at a high of 27.91 and a low of 20.30. Although buying led in the Tokyo market despite the decline in the Dow Jones Industrial Average, the Nikkei VI's decline remained limited during trading hours.
Persistently high crude oil prices and rising long-term interest rates in Japan and overseas were cited as risk factors in the market. The decline in the Nikkei VI was limited at certain points during the day, but the decline widened sharply again at the close.
The Nikkei VI is an indicator of expected stock-price volatility over the coming month and tends to rise sharply when stock prices plunge. After a sharp rise, it tends to revert to a certain range.