Markets are due for a correction, and Japan may be among the hardest hit, according to a Scandinavian bank

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As per SEB’s Sean Yokota, stock markets would experience losses in the near future, with Japanese stocks likely to bear the brunt of the damage. “For the next couple of months, I think you’re going to see some downside risk, especially going into the fall,” Yokota, Singapore head of markets at the firm, told CNBC’s “Squawk Box Asia” on Thursday. “I think stock markets are in for a correction.”

Japan’s markets, he added, could “suffer the most in this scenario,” as the country grapples with mounting Covid cases and low inflation.

Japan is fighting to keep the extremely dangerous delta strain from spreading. According to CNBC calculations based on data from Our World in Data, daily new confirmed cases have increased by approximately 500 percent since July 1. Japan’s stock markets have also plummeted in the same time frame, losing more than 5% in July.

The country is considering extending its Covid emergency declaration to eight more prefectures.

Story By: Norvisi Mawunyegah.