On the 2nd, the Nikkei Volatility Index (an index that reflects how investors anticipate the magnitude of future market volatility) rose by +3.10 (an increase of 12.53%) to 27.85 compared to the previous day. The high was 33.64 and the low was 27.50. Following the decline of major indices in the U.S. stock market yesterday, selling pressure led the Tokyo market today, causing the Nikkei 225 futures to start lower. Amid concerns over increased geopolitical risks in the Middle East, the Nikkei 225 futures remained sluggish even after the trading session started, resulting in a significant drop. This raised caution in the market against heightened volatility, causing the Nikkei VI to significantly exceed yesterday's levels.

What is the Nikkei Average VI?

The Nikkei Average VI is a numerical value that represents the magnitude of volatility (volatility) of the Nikkei Average stock price that the market expects over the next month. It has the characteristic of rising sharply when the Nikkei Average stock price sharply drops, and usually has a weak inverse correlation with the Nikkei Average stock price. On the other hand, it also has the characteristic of returning to a certain range (around 20 to 30) after a sharp rise in value.