Update | Japan stock market rout shows no let-up by close as Singapore equities slide; Hong Kong poised to trade lower Thursday

Asian stock markets swooned by the close on Wednesday in volatile global dealings with Japan’s benchmark index plunging to a 15-month low and analysts predicting pain for Hong Kong and other Asian markets when they come back on Thursday after the Lunar New Year holidays.

In Japan, the Nikkei 225 closed 2.31 per cent or 372.05 points lower at 15,713.39, breaking the 16,000 level for the first time since the end of October 2014. The drop follows a 5.4 per cent fall seen on Tuesday, which represented the most severe one-day fall since May 23, 2013 when it fell by 7.32 per cent.

Singapore’s Strait Times index finished 1.57 per cent or 41.11 points lower at 2,582.10. Markets in mainland China and Taiwan are closed for the week for Lunar New Year, while South Korea and Hong Kong markets will resume trading on Thursday.

“We can see that investors are in a panic,” said Patrick Yiu Ho-yin, managing director of CASH Asset Management.

The crash in the Japanese market can be attributed to a strengthening yen, which is expected to hurt exports and was caused by investors reversing their short-selling positions to buy back the currency at a higher price.

Both Japan and Singapore shares also tracked overnight losses in the US market, which took a hit amid growing concerns over global growth and a lack of clear direction from the US Federal Reserve whether it would raise interest rates in the coming months.