{"id":37608,"date":"2016-11-22T10:51:16","date_gmt":"2016-11-22T05:21:16","guid":{"rendered":"https:\/\/staging-imarticus.kinsta.cloud\/?p=37608"},"modified":"2026-05-15T14:17:04","modified_gmt":"2026-05-15T08:47:04","slug":"japanese-finance-market-2016s-biggest-comeback-story","status":"publish","type":"post","link":"https:\/\/imarticus.org\/blog\/japanese-finance-market-2016s-biggest-comeback-story\/","title":{"rendered":"Why is the Japanese Finance Market 2016\u2019s Biggest Comeback Story?"},"content":{"rendered":"

In The News<\/span><\/h4>\n

Buoyed by a weak yen and a favorable monetary stance from the Bank of Japan, Japanese stocks have rebounded 20% showing the best gains among developing market peers. The Topix index was poised to join the Nikkei 225 in a bull market on Monday and the broader stock gauge will be up more than 20 per cent from its low in February. The benchmark Nikkei 225 ended up 104.78 points, or 0.59 percent, at 17,967.41, at its highest close since January 6.
\nThis is quite the recovery for a market that had fallen 18 percent in the first have as the yen strengthened Shinzo Abe\u2019s \u2018Abeconomics\u2019 received tepid response and was unable to revive economic growth.
\nTrump Victory<\/strong>– There is increased feeling that the shocking Trump victory will now lead to higher spending that will in turn fuel a rise in US interest rates and lead to a stronger US dollar. That would of course mean a weaker yen and a excellent outlook for Japanese exporters like Sony and Toyota. The Yen has dropped 6 percent against the dollar in the last month itself, much more than any other Asian currency.
\nBank of Japan monetary policy<\/strong>– The Bank of Japan also restrained itself and refrained from lowering rates, which allows us to infer that they believe the Japanese Economy is about to bounce back after stalling in the second quarter. \u201cThe bigger picture is that spare capacity is shrinking gradually: gross domestic product expanded by 0.9 per cent over the past 12 months, which is above potential growth,\u201d said Marcel Thieliant, analyst at Capital Economics in Singapore to the Financial Times. The surge in growth came on the back of favourable balance of payments. Exports rose and Imports fell. The BOJ capped 10-year bonds at 0 percent.
\nBut it\u2019s best not to celebrate too soon because nominal growth, which does not adjust for price changes, was weaker at 0.8 percent vs the real growth of 2.2 percent. This could mean Japan is sliding into a period of deflation \u2013 a contraction of in the supply of circulated money, leading to increased purchasing power and wages higher than would have normally been.<\/p>\n

\n