The Nikkei 225 Index dropped 12.4% to close at 31,458, and the Topix Index fell 12.23% to 2,227 on Monday, both hitting nine-month lows. This marked the worst one-day decline for Japanese shares since "Black Monday" in 1987, pushing them into bear market territory. The sell-off was driven by concerns over potential interest rate hikes in Japan, following the Bank of Japan's recent policy rate increase to 0.25% and indications of further hikes expected before March 2025.
Oil prices were under pressure this week. Brent crude oil futures fell 1.9% to $73 per barrel on Friday, registering the biggest weekly loss since early September, with prices dropping over 7%. The decline was attributed to weaker demand forecasts from OPEC and the International Energy Agency (IEA), slowing economic growth in China, and signs of easing geopolitical tensions in the Middle East. Both OPEC and the IEA revised down their demand forecasts for 2024 and 2025. China's refinery output declined for the sixth consecutive month, impacted by weak fuel demand and the growing adoption of electric vehicles (EVs). Meanwhile, U.S. crude oil production reached a new record last week. Although a drawdown in U.S. crude inventories and stronger-than-expected retail sales in September provided some support to oil prices, easing concerns about a broader conflict in the Middle East exerted additional downward pressure on the market.