“Abnormal” is how Japan’s freshly minted prime minister, Taro Aso, described Wednesday’s 9.4 per cent plunge on the stock market. Well, yes and no. Sure, this is the worst one-day fall since the 1987 stock market crash and leaves the market at less than one-quarter its 1989 peak. But is it really so strange that, in the midst of a global meltdown, a country teetering on the brink of recession and expecting negative earnings growth takes a bath?

Japan’s benchmark Nikkei 225 index, after rallying 40 per cent in 2005, went nowhere for most of the next two years and is down 40 per cent this year. Chunky cross- shareholdings magnify the falls. Timing has also never been Japan Inc’s strong point and its shopping spree – $56bn worth of overseas acquisitions this year, according to Thomson Reuters – has not helped. Having shelled out (nearly) top dollar for foreign assets, returns have been compromised. Mitsubishi UFJ’s recent bid for Morgan Stanley’s common stock already represents a 40 per cent premium to the latest market price.