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Japanese stock futures trading was temporarily suspended on Monday morning after circuit breakers were triggered, following a global market meltdown sparked by escalating trade tensions and fears of a “Black Monday”-like crash.
The Nikkei 225 futures plunged over 7.35% in early trade, prompting the Japan Exchange Group (JPX) to halt trading of Nikkei 225 and Topix futures. This move came in response to a steep decline in U.S. stock futures, with Dow Jones and S&P 500 futures dropping 4% each in pre-market trade.
What’s the aim?
Circuit breakers are automated mechanisms used by stock exchanges to pause trading temporarily when prices move too sharply in a short period. The aim is to prevent panic-driven sell-offs and give traders time to reassess the market, helping stabilize extreme volatility.
The sell-off follows U.S. President Donald Trump’s announcement of new tariffs, dubbed “Liberation Day tariffs,” which reignited fears of a global trade war. The Dow Jones Industrial Average recorded a historic two-day drop of more than 1,500 points, including a 2,231-point crash on Friday, raising alarm bells on Wall Street.
Asia wasn’t spared. South Korea’s Kospi fell 4.8%, China’s CSI300 blue-chip index dropped 4.5%, and Hong Kong’s Hang Seng Index nosedived 8% in early trading.
Market analyst Jim Cramer, speaking on CNBC, warned of a possible repeat of the 1987 Black Monday crash, when the Dow plunged 22.6% in a single day. “We will not have to wait too long to know. We will know it by Monday,” he said.
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