It looks like China’s growth figures are going to be higher than anticipated. This is due to the expectation of Japan’s leading share index opening higher too. But the anticipated figures are very much dependent on the stability of the yen and on some raised worries that tensions could increase due to the launch of North Korea’s ballistic rocket. According to one strategist at Monex Inc., it looks like Japanese stocks will “chase the upside following the U.S. markets.” Immediately thereafter, America’s stocks netted a second day of solid gains.
Japanese Market
There are currently two principal issues with which the Japanese market needs to contend. First, fears of North Korea and second, the weakened dollar. These problems need to be sorted out if Japan has any hope that the west will take it seriously vis-à-vis investment-making and business development. The weak yen isn’t exactly helping the situation either; indeed, it’s definitely negatively impacting various Japanese ETFs.
Clearly though, unfortunately, the tsunami the country experienced last year is still being dealt with as well. Indeed, it’s not doing much for Japan’s economy, even today. So now the question being asked is if ETF investors will have a solid chance of making gains in Japanese equities. At least for this year though – as compared to figures in 2011 – Japanese equities are rebounding and the expansion of the Bank of Japan’s figure to $1.37 trillion has facilitated economic stabilization.
Conclusion
So ultimately it’s somewhat unrealistic to make sweeping statements about the Japanese economy and the benefits or disadvantages of making investments there today. It could just be a case of potential investors in general feeling better about taking risks and bringing their money to the east, simply because America’s economy is experiencing less flux and the Eurozone isn’t such a scary financial haunt anymore either. Or, it could be that there are good reasons for western investors to take their monies back to Japan – it really depends in great part on who one asks, and, at where the yen/dollar sits at that particular time.