Following the Democrats' landslide victory in the U.S. midterm elections, Japanese stocks turned broadly lower after a temporary rebound, and the Nikkei Average fell a total of ¥3,643.13 over three days. The background and detailed market movements are examined from an investor's perspective.
Following the midterm election results reported in U.S. time, the Japanese market initially rebounded, but on the following 6th, selling spread across a wide range of stocks, intensifying the movement to withdraw funds from equities. Semiconductor stocks changed direction from day to day: after being bought on the first day, they turned lower, and the decline spread further thereafter.
Experts said that changes in supply and demand and investor sentiment pushed the market lower even though the earnings themselves were not poor, and noted that this may also have affected views on the assumptions underpinning next year's growth. Some also held that the withdrawal of funds beyond a rotation of investments amplified the scale of the decline.