Nikkei retreats after recent rally
The Nikkei nose dived during early trading on monday after more than 2 weeks of consistent gains. Last week the Japanese index rallied to heights not seen since July of 2008 on the back of the Bank of Japan’s new quantitative easing program. This came to an abrupt halt after economic data was released over the weekend in China which suggested their economy may be stuttering. Additionally the on going concern in the US was once again highlighted as the world’s largest economic powerhouse publicly second guessed the stability of the global economy.
The impact was damning for the exporters who had prospered in the middle of last week, causing them to decline rapidly upon the opening of the markets. Olympus Corp, Tokyo Electron, TDK Corp and Toyota Motor Corp had all declined by around 2% at the midday break.
Many investors are currently waiting with baited breath for the results of the G20 meeting which is scheduled for the end of mid June. Until then analyst’s are suggesting that there will be no massive movements in the market, unless a central bank proposes a drastic new policy. One such policy is that of the Bank of Japan’s. The bank’s governor, Mr Kuroda, will be attending in an attempt to reassure the leaders of the world’s largest economies that his policies will benefit not just Japan but the global economy as a whole. If he cannot achieve that then he must, at the very least, assure them that the damage to their own economies will be minimal.
One of the few stocks to make a substantial gain was Sharp Corp. The electronics giant, who specializes in home entertainment, is said to be preparing for the sale of their stake in fellow electronics company Pioneer. Pioneer have maintained a strong market share in the “in car entertainment” industry for decades. Suggestions of Sharp’s sale of their 9% shareholding in the company saw their stock rise by 14%, while Pioneer also gained 6%.