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Nikkei closes at 18-year high

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14 Comments
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Nice. Keep weakening the Yen too. I love it.

0 ( +2 / -2 )

@yelnats agreed, US interest rate rise this year should keep the yen down and the US$ up. sorry for all those imported goods lovers but its us exporters that are having it good for a change

0 ( +1 / -1 )

Amazing news! JAPAN must have either:

A). A rapidly growing economy , population , tax income, skilled immigration program, expanding manufacturing sector, growing wages and mild inflation, booming real estate market, strong currency, good relations with neighboring states.

B). None of the above, the stock market has replaced the economy

0 ( +3 / -3 )

I give some credit to the changes Abe has pushed through regarding corporate governance. (It's a pity about the rest of his governance!) This would seem to be playing a part in this stock market rally.

So I won't dump my meager Japanese equities exposure until all the Japanese housewives and JT commentators start buying the Nikkei too, like has been going on over in China recently.

0 ( +1 / -1 )

Its bubbling all over Otemachi; welcome to the Autumn bubble of old, aging Japan.

-2 ( +2 / -4 )

Absolutely no justification for the high stock market. It's a total bubble which is going to collapse and soon.

-1 ( +2 / -3 )

"Absolutely no justification for the high stock market"

Yes there is. Previously, Japan's biggest institutions were held back from buying equities, because they bought tons and tons of govt bonds instead. The authorities recently re-allocated their asset mixes toward stocks, giving them more freedom to buy stock, in line with other countries like Canada, for example, whose state pension fund is a big stock buyer.

Retail investment has also been liberalized with NISAs, etc., so Joe Salaryman is starting to buy stocks for the first time.

We are seeing the results of this. Japanese investors have become somewhat more "normal," ditching bonds that pay nearly zero.

0 ( +1 / -1 )

Retail investment has also been liberalized with NISAs, etc.

They just made the tax treatment more favourable, there was not really any liberalization - people could already invest if they wanted to.

But when something is taxed less, you get more of it. It's a good illustration of how such incentives work.

so Joe Salaryman is starting to buy stocks for the first time.

It's interesting but I remember seeing figures showing that most of the NISA account money has been flowing in from older folks, rather than the younger ones.

1 ( +1 / -0 )

"people could already invest if they wanted to."

But they didn't want to. If it weren't for a government initiative , NISAs wouldn't exist in the first place. And beyond the tax breaks, they make it really easy for individuals to buy mutual funds and the like in their small local bank, an arrangement the govt is promoting. That's called "liberalization."

"flowing in from older folks, rather than the younger ones."

Alright, make that "retired" Joe Salaryman.

-1 ( +0 / -1 )

People didn't want to invest because of the taxes, mostly, not because of limited channels to make investments through. NISAs are just a government approved loophole on small investments to avoid paying taxes on profits that government would otherwise demand, that's the primary attraction.

This is what happens when the government gets out of the way.

-1 ( +0 / -1 )

mr jbg, I work in Otemachi. There is no "bubble" you speak of. In fact, as long as "experts" on JT keep screaming about said "bubble," I can guarantee you there is no bubble.

3 ( +3 / -0 )

"People didn't want to invest because of the taxes"

Nope. It's because Mr. and Mrs. Watanabe were the most risk-adverse people on the planet. The government has since waged a PR campaign to change that mindset, with the message that seeking higher returns is OK and it's time to ditch those government bonds.

-1 ( +0 / -1 )

umbrella JUN. 24, 2015 - 09:33PM JST Absolutely no justification for the high stock market. It's a total bubble which is going to collapse and soon.

The Japanese companies made record profits in the most recent year partly due to a weaker yen that fattened earnings of big exporters. Many of the companies will get a bigger profit growth in the year ahead. Japan airlines and ANA have higher profits due to a recent tourism boom and cheaper fuel prices, both partly the result of a weaker yen. Instead of returning the profits to the shareholders, they should give some of it to the employees who had to burden the tax increase.

1 ( +1 / -0 )

JeffLee, the primary focus of the PR has been informing people about the tax exemptions that they might be able to enjoy if they invest via a NISA (should their investments be profitable, which is not guaranteed).

If people were just deciding to invest, not because of the improved risk/reward balance on offer, but because of government PR telling them to do so, that would be a grave concern.

sfjp330, cheaper fuel prices isn't because of a weaker yen.

Instead of returning the profits to the shareholders, they should give some of it to the employees who had to burden the tax increase.

If they need to "give some of it" in order to retain employees, sure.

But business is not charity. Moreover, if the employees are investing (via NISAs for example to avoid tax), and the national pension fund is increasingly invested in stocks, then they are already benefiting when profits are returned to shareholders - because they are shareholders too, even if only indirectly.

-1 ( +0 / -1 )

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