Happy days for Japanese Indexes
o This is a new record high, 38,915.87 in 1989 was the previous record.
o Since the end of December, Nikkei has grown 17%
o It was previously 38,500.
o Weak Yen means investment in Japanese stocks is cheaper for overseas investors.
o Reduced interest in Chinese markets.
o Increased Japanese corporate earnings.
o Rising inflation following years of deflation
Not all good news
· The Japanese economy isn’t at the best position.
o Currently in recession
o Rising cost of living
o Fall in real wages.
o Negative interest rate (-0.1%)
· Compared to 1989 the Japanese economy looks very different.
o Companies
o Economy
· Takeshi Niinami CEO of Suntory shared concerns about the cheap yen.
· Koji Toda of Resona Asset Management said: “There is still no certainty of overcoming deflation.”
The current share price rise does not necessarily reflect the actual strength of Japanese companies”- Tokura, chair of Keidanren.