Nikkei soars more than 7% on weaker yen

Picture expired. The benchmark Nikkei 225 index at the Tokyo Stock Exchange soared 5.06%, or 756.23 points, to 15,708.84 in late morning trade on Monday. AFP

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  • 4

    gaijinfo

    BOJ must be buying hand over fist...

  • 4

    Citizen2012

    BOJ doing some manipulation in a slow Monday morning.

  • 7

    Gary Raynor

    gaijinfo

    BOJ must be buying hand over fist...

    Citizen2012

    BOJ doing some manipulation in a slow Monday morning.

    Not at all.

    This morning's GDP figures were so bad that speculators are banking on Kuroda doing more QE in March. I don't think he will or can. To reduce the negative interest rates more will just hurt the banks who have nowhere else to put their money. There's no more BOJ shares to buy and other buying of assets will be seen by the world as a whole as Japan manipulating its currency.

    Anyone who hasn't sold their Nikkei shares by 1st April 2014, deserves what they get.

  • 3

    JeffLee

    that's what you call "volatility."

  • 1

    Frederic Bastiat

    All is well! Happy days are here again!

    But, nevermind the manipulation.

  • -6

    some14some

    Chinese Lunar holidays are over...meaning? China works and rest of world benefits (!)

  • 3

    wtfjapan

    BOJ must be buying hand over fist.. actually investors are just pully money out of the "safe haven" yen and putting it in stocks where it should be. all the high yen lovers, I wouldnt expect the yen to go below 100yen/$ anytime soon, 120 here we come again!

  • -3

    gogogo

    Japan breaking the rules of the TPP by manipulating the market again

  • 2

    wtfjapan

    Japan breaking the rules of the TPP by manipulating the market again LOL so the EU is printing flat out and had negative interest rates before Japan, the US Fed just finished printing $5trillion+ , why is it nobody has the nads to label Japan a manipulator!? because theyre all doing and have done exactly what Japan is doing and will make them look like hypocrites. so please all you high yen lovers enough with the currency manipulator BS!

  • 3

    kickboard

    Japan breaking the rules of the TPP by manipulating the market again

    Your post makes no sense. The Nikkei average went down 2000 yen over the past week. It was bound to go back up. When stock prices fall sharply, there is always a correction as some investors tend to overreact. Last Friday I told all of my Japanese coworkers to invest now because stocks will rebound next week. It's a good time to make a quick buck.

  • 6

    Yubaru

    A consumption tax hike in 2014 pushed the country into a brief recession.

    Brief? My pocketbook has been in a recession for a decade at least!

  • 3

    klausdorth

    It's not just the Japanese stock market.

    The German DAX also increased by 2.45% as did the DOW by 2%.

  • 1

    Disillusioned

    Smoke and mirrors economic reporting! Yeah, maybe Japanese stocks have risen, but they are still nowhere near what they were a decade ago and have only recovered by half of their drop six months ago. While it may seem positive, it is nothing to get excited about.

  • 2

    daito_hak

    Totally pointless news based on virtual economy.

    In reality, Japan’s economy shrunk again, by annualized 1.4% during the final quarter of ’15.

  • 2

    bruinfan

    Wow! What gains in productivity fueled this increase? I am impressed...lol!

  • 8

    JeffLee

    Nikkei ended the day up 7.5%.

    Interesting attitudes on this forum. When the Nikkei falls, its a symptom of the failure of Abenomics and spells doom for the Japanese economy. when it rises, It's merely a flash in the pan.

  • 7

    fxgai

    I agree JeffLee, just because it went up today doesn't mean there was manipulation.

    But I do think it was a dead-cat bounce. If I hadn't already sold my Japanese shares last December, I'd be selling first thing tomorrow.

    The Abenomics rally is over.

  • 2

    gokai_wo_maneku

    Is this a PKO? (price keeping operation)

  • 4

    Reckless

    short sellers covering after making a tidy profit?

  • 1

    Frederic Bastiat

    "Japanese Finance Minister Taro Aso said on Friday the government would take necessary steps to deal with currency volatility, the minister’s strongest hint of intervention since the yen began its surge this month."

    Yup. Dead cat bounce.

  • 5

    Akula

    Crikey I'm glad the lot of you don't manage investment portfolios.

    Inevitable this would happen. A correction was likely going to happen at some point, but it was clearly an overcorrection.

  • 0

    smithinjapan

    fxgai: "But I do think it was a dead-cat bounce."

    First time I've heard that (that I recall)! Nice. Made me laugh. Will definitely use it again, and maybe mix metaphors like, when the BOJ does the same old thing, and Abe talks about new arrows, maybe "whipping a dead cat?"

  • 4

    Mike3113King

    There is no evidence that 2% inflation is the best amount for an economy to grow. If that were the case, wouldn't 4% be twice as good? The real reason why central banks tout inflation as the magical elixir is because they have so much debt, the only way to pay it, is to inflate it away. Problem is, if you're not getting a raise, you're purchasing power is constantly going down.

  • -3

    Brian Wheway

    what nobody has picked up on yet is that due to the exchange rate dropping this will have a serious impact on tourism, Ive just looked at the exchange rate and its only 165 yen to the pound, in December time it was around 180 if this rate keeps dropping its going to have an effect on tourism which brings in millions of yen for Japan, although its good for exports.

  • 1

    sfjp330

    Akula FEB. 15, 2016 - 04:54PM JST Inevitable this would happen. A correction was likely going to happen at some point, but it was clearly an overcorrection.

    The market turmoil isn't over, and the yen is going to continue to rise. With the economic uncertainty of tumultuous market around the world, investors are now placing big bets on the Japanese yen on a massive scale. People are bailing out, they're bailing out of trades in general and that means buying back the Japanese yen. It's surprising that investors are not going for cash or gold as safe havens, rather than the yen. A stronger yen will will make it more difficult to Japanese companies, which are already struggling with the economic slowdown in China and recent market volatility. J-government will most likely delay increase in sales tax.

  • 1

    Yubaru

    There is no evidence that 2% inflation is the best amount for an economy to grow.

    His 2% goal of inflation was to counter the deflationary slide the economy had fallen into.

    what nobody has picked up on yet is that due to the exchange rate dropping this will have a serious impact on tourism,

    It still wont have much an effect on the tourists coming from Korea, Taiwan, and China, which account for the overwhelming number of foreign tourists to Japan.

    If it falls to between 105 to 110 to the $1 then there might be a down turn. The pound accounts for a small portion of the tourist economy, the Euro is the currency to watch.

  • 1

    ThonTaddeo

    There is no evidence that 2% inflation is the best amount for an economy to grow.

    His 2% goal of inflation was to counter the deflationary slide the economy had fallen into.

    The economy, while stagnant, wasn't in anything that could realistically be called a "deflationary slide" (or "spiral", another word much used by the BOJ). Prices were declining by the near-negligible rare of about 0.1% per year, and the magnitude of Abe's target was roughly 20 times that.

    The real aim for Abe and Kuroda was to get the public to falsely believe that consumer price inflation is linked to growth so that when the inflation comes (but not the actual growth), people will accept it and even cheer for it while their savings is stripped of its value. The public loses and the DPJ/BOJ wins big.

  • 2

    fxgai

    smithinjapan,

    Glad you got a laugh, but I can't take credit for that one. It's markets terminology: https://en.wikipedia.org/wiki/Dead_cat_bounce

    Akula,

    A correction was likely going to happen at some point, but it was clearly an overcorrection.

    Which was the correction? Today's 7% jump or last week7s 11% crash?

    sfjp330,

    It's surprising that investors are not going for cash or gold as safe havens

    To my surprise, gold appears to have outperformed yen so far this year. It's interesting, because unlike yen, I don't think anyone borrows gold to fund other investments... so it does seem to genuinely be in favour at the moment. Gold lovers like Peter Schiff who have been wrong for the last 4 years suddenly claim that they were right all along :)

  • 1

    ghoneim mohamed

    What happened today in Nikei and yen is no more than reaction to violent bloody loss,this is only technical movement, but not recovery or rebounding. as i said Nikei wont go higher,will hurry down again,Yen also couldnt reach nor break resistance level of 114.70,then means will goes down to 110.98,then down to106.63,up till now no intervene from government,not before above mentioned level.This scenario is gonna happen,i repeated several times.its mere speculations bringing hard times to Japan,but still Japan economy not in danger up till now.

  • 1

    AsianGaijinYesWeExist

    this is only technical movement, but not recovery or rebounding.

    It's called a technical rebound.

  • -2

    jj1067

    Oil price goes down, China goes down, US interest rates rise now uncertain and Deutsche Bank in crisis...

    Good enough for PM Abe to postpone consumer tax raise from 8 to to 10%. He won't announce that until appropriate time. But that announcement, when it happens, will give a good boost on Japan's stock market.

    Only thing I don't understand, why do people buy Yen these days?

  • 1

    Kobe White Bar Owner

    @ some14some

    Putting the blame on China.... do you work for NHK?

  • -2

    sangetsu03

    Interesting attitudes on this forum. When the Nikkei falls, its a symptom of the failure of Abenomics and spells doom for the Japanese economy. when it rises, It's merely a flash in the pan.

    It wasn't the rapid fall which spelt doom, but the rapid rise fueled almost entirely by currency manipulation, deficit spending, and empty promises.

    Stocks were oversold last week, the market corrected a little this morning. But the correction was as excessive as the overselling was last week. The market is still in a bubble. Don't bet on the Nikkei reaching 20,000 again, ever.

    This morning's GDP figures were so bad that speculators are banking on Kuroda doing more QE in March. I don't think he will or can.

    Of course he will pump, he has no choice, there are no other options available. Other countries won't squawk, because they will be doing the same. The markets are now fully dependent on the continued pumping of central banks, hence the jump today even in the face of GDP falling, and real sales contracting. But don't worry, the market will eventually drag the stock markets and politicians back into reality, kicking and screaming as they go as their economic houses of cards collapse around them. The exchange rates won't change much when central banks are making international currencies equally worthless.

  • 1

    ghoneim mohamed

    Yen at this moment reached 114.6 bellow minor resistance 114.7,in case it breaks the level up-i doubt-will try main resistance level of 115.96,but failing to break 114.7 means going down to first support level 110.98,but this time i believe will break to reach 106.63.at this level there will rebound but not for short term.On the other hand Nikei closed under 16029(resistance level),it may try to break and reach second resistance level 16152,but no way to close above 16275,even if it happens it will be false one.BOJ and government watches nervously whats going on-AS MERE SPECULATIONS-ready to intervene if needed-most probably will happen-but now they just keep watching cautiously. I hope its clear enough-as shown-whats going on has nothing to do with Abe Shinzo or Abenomics,even yesterday news has nothing to do,simply because its less than expected.Even best economists in the world can not help in such a situation,as far as Speculators Mafia of wall street are the strongest worldwide.

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