$600 billion.

That’s how much value disappeared into thin air in Japan over the past 48 hours, during which local equities plunged in their worst two-day rout since 3.11.

The Topix dove more than 6% on Friday, as markets adjusted to a new reality defined by a hawkish (or relatively hawkish, anyway) Bank of Japan and a Fed that’s on the brink of cutting rates.

As the figure shows, the two-session decline was larger than any two-day loss logged during the early days of the pandemic. The Nikkei suffered its worst session since March of 2020 on Friday.

Do note: The Nikkei’s down nearly 13.5% over the past three weeks. The Topix 12.8%. Japanese shares celebrated their first all-time highs since 1989 earlier this year amid optimism around the macro normalization process, which is to say investors were enthusiastic about the exorcism of the deflation demon.

The BoJ of course hiked rates this week and telegraphed more to come while sketching the contours of a plan to halve bond-buying. It was the second BoJ hike of the year.

Plainly, the BoJ wasn’t priced in. The hawkish bent was fuel on the fire for a yen rally that was already quite pronounced.

The scope and rapidity of the losses in Japanese equities suggests everyone was bailing and no one was buying. The associated volatility surely exacerbated the situation, triggering mechanical selling.

Exporters were under siege on the strong yen and tech shares suffered on a bad read-through from the US, where Amazon’s revenue miss looked set to spark another selloff in what’s becoming a very volatile mega-cap trade.

Look out below.