The Nikkei's Volatility Index Hit a 4-year High

The Nikkei 225's volatility index pierced through 40 on May 23, a new four year high (h/t), right before the Nikkei 225 crashed 15% peak to trough (15,942 to 13,555) in seven trading days. Even after the correction, the Nikkei 225 is still up about 50% since November 2012. So a technical breakdown was expected at some point; hence why Nikkei 225 options were pricing in a volatile correction. The Nikkei's volatility index is still well below its 2008 highs (second chart). Stay tuned for DV's Japan exclusive.

Nikkei Stock Average Volatility Index (1Y) via Nikkei.co.jp

Nikkei Stock Average Volatility Index (5Y)  via Nikkei.co.jp

Nikkei 225 (7D) via Google Finance

Nikkei 225 (6M)  via Google Finance

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