Japan: Biggest Gains Ever Yesterday.

October 15th, 2008

Japan: Biggest Gains Ever Yesterday.

Hey all,

With their exchange closed on Monday for holiday, the Japanese TOPIX Index soared 13.73% yesterday, according to the Emerginvest heat map. A Wall Street Journal article headline stated: “Tokyo Jumps 14% in Its Biggest Gain in 40 Years.”

It’s not all that surprising since there was such a massive global upswing in global markets on Monday, which created a pent-up demand for Japanese equities for the opening yesterday morning. That being said, it was bolstered by the Japanese government announcement on Tuesday when they unveiled their banking support package. According to another WSJ article: “Bank to Ease Tension in Short Term Market,” the government announced additional provisions for share-buybacks, and hinted at injecting capital into shaky regional banks.

More specifically, the article reported that the central bank will: “enhance its dollar-fund supply operations so it can provide an unlimited amount of dollars against pooled collateral at a fixed rate…broaden types of eligible collateral for Japanese government bonds and commercial paper repurchase operations… [and] expand the range of collateral that it accepts in its JGB repurchase operations.”

All in all, the pent up demand for Japanese equities in anticipation of the climb Tuesday morning sent the market sky high, and I am happy to report that as of today have remained relatively constant. Actually , the NIKKEI 225 has risen 99.9 points (or 1.06%) today as of the penning of this article.
The moderate to long term outlook on the index remains to be seen however. While Japan looks to be in a relatively stable position, most market experts agree that there will be additional downward surges in the coming weeks globally.

In light of the current global instability, it was good to see that Japan had a moderately stable day today.

More soon from the Emerginvest Blog,

Best,
Jonathan

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