Massive volatility hits Nikkei 225 again- is that a warning?

If you thought the volatility in the US markets was elevated, then it is nothing compared to what is unfolding across Asia this morning. It has been another crazy day of heavy losses in the Korean markets, causing circuit breakers to halt trading, as the KOSPI slides again. That has delivered another significant reversal in the Nikkei 225 today. We saw how the index fell sharply earlier in the week, only to recover sharply yesterday. Well, it has handed back almost all of that this morning. 

The index was down around 5% a short while ago and has fallen back from a high seen yesterday at 72,594. The index has fallen as low as 68,639 earlier today. It is off the lows now though, but these swings and huge volatility could be a warning that the index is peaking. So, often in the past, such volatility at record levels can serve as a warning that it is. That could have implications for the USD/JPY, which we shall look at in the very next update.