Business

In Japan the Topix plunged by 12% in a day, its worst performance since 1987, as the yen strengthened at a blistering pace. Investors are betting that America’s Federal Reserve will now be forced into making more and deeper cuts to interest rates. That combination has hit investors who borrow cheaply in yen to make higher-yielding investments in dollars. The Bank of Japan recently increased its main rate, which makes that trade less attractive. Japanese stocks rallied in subsequent days, in part because the BoJ suggested it would not raise rates again in the short term.