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2019.2.16 |
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NIKKEI225 | |
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Closed at 20,900.63 (-1.13%) Target to 21,500.00 (+2.87%) | |
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Indices | |
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TOPIX 1,577.29 (-0.79%) | |
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S&P500 2,775.60 (+1.09%) | |
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NASDAQ 7,472.41 (+0.61%) | |
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HangSeng 27,900.84 (-1.87%) | |
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EuroStoxx 3,241.25 (+1.84%) | |
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10Y JGB -0.021 (-0.007%) | |
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10Y US T-Note 2.6626 (+0.009%) | |
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USDJPY 110.47 (-0.01%) | |
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1. Japanese stock market had shown slower rise than DM peers. This January was one of the best months in recent history for the global stock markets. Representative S&P500 had risen by 7.87% during the month. NIKKEI225 had gone up but the number was lower than 4%. Considering the best news to regional manufacturers, smoothing negotiation for trade war between the US and China, the number was really disappointment. Decision of Bank of Japan to extend quantitative easing didn’t raise the index too. | |
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2. Unlike Corporate America, Japan Inc is struggling with worse-than-expected performance. The performance of corporates in the US is better than expected with not-bad domestic macroeconomic situation, lowering market interest rates and low former consensus. The earning surprise could be one of the reasons why S&P500 had shown rise by about 8%. On the other hand, Japanese counterparts are not in good situation. The trade-war between the G2 had given pressure to Japanese players. The proceeding negotiation looks like to take more time while US Trump administration is threatening 25% tariff on imports of automobile. We should consider expected contraction of growth in the US and the proceeding contraction in Eurozone and China too. Even though regional domestic economy had expanded during 4Q last year, it is not good enough to offset the contraction of the exports. Expected consumption tax rise is not a piece of good news. Considering inside and outside situation, earning surprise is really hard to come up. | |
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3. Lowering policy rate is not good news, not this time. If the market interest rate is more than 0.5%, at least 1%, the decreasing rate could be the best news for the stock markets. If the interest rate decreases from 1% to 0%, it could bring the amount of change to the market, but the amount of change of the rate is just 0.05% to 0%. To buffer this low volatility, other factor like exchange rate of USDJPY should be in changeable momentum, but it is in static range too. Because the government should protect regional manufacturers’ competitiveness in global market, it will never do something to decrease the exchange rate. The lowest volatility in the regional fixed incomes and currencies has been accompanying the lowest volatility in the stock market. | |
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4. I believe the global stock market has enough room of additional rally, but that for the Japanese market is more limited than its rivals. Favorable US treasury markets, non-dead recovery of global economic growth and performance of Corporate US are giving momentum to the global stock markets. However, market participants are showing disappointment for the regional market. I think upside of NIKKEI225 is more limited than the other markets. | |
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Mr. Banker, http://markety.tistory.com | |
