Investing in Japan



Bank of Japan caves in again (Dec 19)
I don’t agree with the BoJ’s decision to cut from 0.3% –> 0.1%. The cost of borrowing is not the problem here. In fact, the impetus to cut was at least partially pressure from the MoF, in what amounts to a silly attempt to ease yen-strength. The reaction has been muted, and for now, [...]


Recession confirmed in Japan — tell us something we don’t know (Nov 17)
No need to get excited over the fact that the Japanese economy has now contracted two consecutive quarters (no shooting the messenger). That was largely already factored into equities, thus explaining the severely depressed levels registered of late. However, as The Economist reported in its latest edition, the “Toyota shock” of a sharp decline in [...]


Individual investors rising through the wreckage in Tokyo (Nov 10)
To say that the Japanese are sitting on a lot of cash is an understatement. In fact, with as much as $15T of aggregate “AUM,” they continue to struggle (esp. since the YCT was grounded) to find a way to earn better than next-to-nothing returns, given the nation’s miniaturized monetary policy. Individual investors’ long [...]


Japanese stocks set to sink again as reality bites (Nov 6)
Prior to yesterday’s 6.5% drop in Tokyo (Nikkei 225 close at 8,899), the N225 had rallied 33% in the prior six sessions to recoup a good chunk of the 37% drop between Oct. 1 and the 26-year low reached Oct. 27 at 7,162. Yesterday I stated the obvious in that Tokyo would sell-off as reality [...]


Awaiting a sell-off as reality strikes again (Nov 5)
The benchmark Nikkei 225 has gained 33% in the last six trading sessions since bottoming at a 26-year low at 7,162 on October 27. However, to put the surge in perspective: from the start of October to that bottom, the Nikkei shed an even more impressive 37%. So at a close yesterday of 9,521, the [...]


BoJ caves in to pressure; Nikkei profit-taking ahead of 3-day (Oct 31)
The Bank of Japan cut rates for the first time in seven years: 0.5% –> 0.3%, which is said to have disappointed the market and thus caused the sell-off in Tokyo (Nikkei 225: -5%; Topix-1: -3.6%). Not quite. The market had already opened lower and traded down throughout the entire session until the BoJ announcement. [...]


Nikkei recovery a little much? (Oct 30)
6.4%, 7.7% and now 10%. Those are the percentage gains for the Nikkei 225 over the past three sessions. Thursday’s gain was the 4th largest ever. Tokyo rallied along with the rest of Asia, including a record setting 12% surge in South Korea. Headlines emphasize Central Bank rate cuts, expectation of a BoJ cut tomorrow [...]


Nikkei rally sustained by pension fund buying (Oct 29)
Stocks surged early and held up nicely in Tokyo, that is, until the start of the afternoon session and profit-taking. However, word on the street is that around 2pm pension fund buying helped recover the earlier highs — in fact, producing the seventh largest percentage gain ever for the N225 (7.7%). *I had to remove the [...]


More detail on impact of cross shareholdings in a bear market (Oct 29)
See the clip below (re. cross shareholding) from an article discussing Japanese stocks at a 26-year low (as of Monday’s close) in yesterday’s Wall Street Journal. Earlier this week I discussed cross shareholdings in Poisonous cross shareholdings may be helpful in reaching a quicker bottom. clipped from online.wsj.com Japan’s banks, in particular, had seemed to [...]


Finally, a Nikkei bottom? (Oct 28)
After four days of massive hemorrhaging (over 2,100 points lost), the Nikkei 225 bounced back in an afternoon session rally that gained momentum into the close. The N225 gained 6.4% (459 points) to close at 7,621. In early trading it wasn’t clear a positive close would happen — the N225 fell through 7,000 at [...]