Japan: going nowhere

Article Abstract:

Japanese share prices dropped in summer 1996, as happened in most big stock markets world wide, but Japanese share prices have not recovered as has happened elsewhere. Japanese government bond yields have dropped and the Japanese yen has softened. These two factors have tended to correlate with higher share prices, but other factors are deterring investors in shares. They are concerned about the strength of Japanese economic recovery, political uncertainty and the impact of a possible rise in US interest rates.

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Japan: election alert

Article Abstract:

Japanese elections may be held in Oct 1996 or in 1997. The government is likely to issue a spending package, which should help ease a transition in fiscal policy toward contraction from expansion. This should help the stock market, as should news that US rates may not be raised in the short term from Sep 1996. Both domestic and foreign investors appear more optimistic. There could still be problems if institutions decide to take profits by selling shares on a large scale.

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