The Nikkei Volatility Index fell from the previous day, as the decline in share prices eased market overheating. As of 2:05 p.m., the VI was 28.50, while Nikkei 225 futures were trading in negative territory. After the sharp rise through yesterday, share prices have declined and the indicator of market overheating has eased somewhat.
The Nikkei Volatility Index was 28.50 as of 2:05 p.m., down 0.70 from the previous day, or 2.40%. Today’s high was 29.44 and low was 28.16. Although major indexes rose in the U.S. stock market yesterday, selling dominated in Tokyo, and Nikkei 225 futures were trading in negative territory. Nikkei 225 futures had risen approximately ¥7,580 between 16 September and yesterday, leaving short-term overheating unaddressed. As share prices declined in this environment, the Nikkei VI traded below the previous day’s level.
The Nikkei Volatility Index measures the expected magnitude of fluctuations in the Nikkei 225 over the coming month and tends to surge when share prices plunge. It generally has a weak inverse correlation with the Nikkei 225 and also tends to revert to a certain range, generally around 20 to 30, after a sharp rise. The latest move is viewed as indicating that the decline in share prices has eased market overheating somewhat.