Last week was another down week for the Nikkei, albeit very limited, but the Friday close of 13,942 was over 3.5% off the weekly high and the second consecutive week of a sub-14,000 finish. So, while the Nikkei had been showing signs of promise and not simply selling-off on every piece of bad news, a move beyond 14,500 has proven elusive. The N225 is up over 19% from its year-to-date and multi-year low of 11,691, but there are just not enough positive catalysts to push stocks higher, at present, in the face of all the bad news that continues to hit the wires day in and day out. And this month, we have hedge fund redemptions that could be putting further downward pressure on equities. [Read more →]

The Nikkei had a rough go last week indeed, losing 3.6% and the 14,000-level (13,973.73); TOPIX fell to 1,371.57 after a short-lived recovery of 1,400 two weeks ago. No worries though, as Chicago Nikkei 225 futures not only held 14k, but added 140 points to the upside (14,220) setting the stage for a gap up on Monday (Osaka N225 futures: 13,980). [Read more →]

In “Hollowing Out, Tokyo Style,” FT Alphaville’s Gwen Robinson does a fine job of capturing an ongoing, and now accelerating human resources conundrum. While it seems like there’s no shortage lately of fake Japundits (not to be confused with the real Japundit, who is simply trying to keep it real on the cultural front) saying to go long Japanese stocks, boots-on-the-ground evidence provides further insight into the opaque. [Read more →]

The Nikkei 225 had a positive week, up a modest 1% to 14,489.44, its highest close since early January, but fell short of its calendar year high of 14,691. Remember, keeping things in perspective is important because the N225 opened the year at 15,155 and was trading 18,000-plus last year. In spite of recent resiliency in Japanese equities, it looks like this week will be a tough one, starting with a big gap down on Monday and external factors as well as domestic economic data all putting potential downward pressure on stocks. [Read more →]

Last week’s question of resiliency or reluctance at 14,000 for the Nikkei 225 Stock Average was answered, somewhat predictably, with another late-week rally. The Nikkei ended the week higher by 2.3% to 14,338.54 and the broader TOPIX, which rose by the same amount, recouped the 1,400-level (1,408.14) for the first time since January 10th.

This week, the N225 is poised to test its Jan. 10 high of 14,388 and perhaps it’s not a stretch to throw in the 14,691 close on the first day of trading this year (its calendar year high close). But don’t get too excited (just trying to keep things in perspective), considering the N225’s 15,155 open on the first day of trading in 2008, let alone the 18,000-plus levels it once traded at last year! [Read more →]

What to watch: Thursday, May 29: U.S. Revised Q1 GDP; Friday, May 30: CPI for April (May for select metropolitan areas); April - Industrial Production; April - Household income and expenditure survey; April - New housing starts; April - Unemployment and Ratio of Job Offers to Applicants

Ongoing: Commodities and forex volatility — more inflation reporting chicanery. Protectionist tendencies may be pressured by a report (and the realization) of $3.2 billion in cross-shareholding losses in FY2007, as well as greater urgency from within for acceptance of foreign investment. In the meantime, we can enjoy watching the latest round of TCI (The Children’s Investment Fund (UK)) vs. J-Power (JP: 9513). [Read more →]

What to watch: Monday and Tuesday, May 19-20: Bank of Japan [BoJ] Monetary Policy Meeting; Tuesday, May 20: Monthly Report of (May) Economic and Financial Developments [BoJ]

Ongoing: Earnings season is in the home stretch; 150 announcements are scheduled for Friday (less than 50 are scheduled for the week of May 26); It goes without saying that external factors will continue to impact domestic stocks, however record oil and yen hovering around the ¥105 level have not stopped the Nikkei’s recovery of 14,000. [Read more →]

What to watch: Earnings season peaks with over 1,700 companies reporting this week; Monday, 5/12: Economy Watchers Survey - March (Cabinet Office); Money supply data - April (Bank of Japan (BOJ)); Wednesday, 5/14: Corporate Goods Price Index - April (BOJ); U.S. CPI - April; Thursday, 5/14: Machinery Orders - March (Cabinet Office); Mansion/Condominium sales - April (Real Estate Economic Institute Co.); Friday, 5/16: GDP - January to March quarter (Cabinet Office)

Ongoing: Earnings, earnings, earnings! And as always, external factors will impact domestic equities, most noticeably rising commodities (record oil) and a weaker dollar (stronger yen): ¥102.80 on Friday vs. ¥105.4 the prior Friday. [Read more →]

Thoughts on the Nikkei 225 Stock Average:

Japanese stocks have been rallying over the past several weeks and the benchmark Nikkei 225 Stock Average is now at a 2-month-plus high; the N225 recouped 14,000 last Friday in spite of thin trading of late, due to the extended holiday that continues through this Tuesday. Short-term, sentiment has improved drastically as buyers have emerged to pick up stocks with severely depressed prices and the kind of valuations that excite Warren Buffett; [Read more →]

What to watch: Monday and Tuesday, May 5-6: Nothing — TSE closed (trading resumes Wednesday); Earnings season also resumes; Friday, May 9: Index of Business Conditions (Cabinet Office)

Ongoing: As always, external factors will impact domestic equities; however at present, conditions seem favorable given the weakening yen (now around ¥105/$1) and an accommodative Fed on all fronts. Concurrently, that the Japanese government is protectionist or that the Bank of Japan is helpless seems to be beside the point. Meantime, the ongoing question is whether Japanese stocks represent true value or instead, if the apparent value is merely an unobtainable mirage for gaijin investors. [Read more →]