Korean war

James Mackintosh

The Nikkei 225 is down more than 7 per cent today, its 11th biggest daily fall since it was created in 1950. Explanations abound: the hawkish interpretation of Ben Bernanke’s testimony to Congress (although it can be read either way), the hawkish interpretation of the Fed minutes (ditto) and the surprisingly weak purchasing managers’ index from China, showing manufacturing shrinking slightly.

All these no doubt matter. But the real question is why markets chose to care today. China has been slowing for months, and while Fed-ology always moves prices, it was particularly hard to read anything much new into Wednesday’s comments.