Weekly Commentary – Japanese equity market spring
In past two week, Nikkei index have accumulatively dropped 8.95% from 14142.65 (27 May) to 12877.53 (7 June). At the same time, Yen have risen to 97.56. Investors are selling Japanese stocks, and worried a recovery might not be easy for the government to engineer.
In fact, Japanese equity market will spring up with high probability this week, since there are 4 main factors to support the market.
1. Japanese Government Action
a. Japan first quarter GDP announcement (Monday)
b. Bank of Japan meeting announcement (Tuesday)
2. Market News
George Soros’s firm, Soros Fund Management, return to Japan equity market. Mr. Soros have sold much of Japanese -stock in May, but he is buying Japanese stock again
3. Technical analyst
According to technical analyst, Japanese stock is over-sold, the price is lower
4. Yen is expected to drop again
In Conclusion, we regard Japanese equity market will spring up in short term. For the long term trend of Japanese market, we left the discussion in monthly newsletter.
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