August 10 (News about Japan) – Japan’s Nikkei 225 and Topix markets rebounded more than 10% on Tuesday, August 6, after a bear run saw prices fall to technical support levels. The bounce came as the yen fell 1% against the dollar, making the country’s stocks a more attractive investment opportunity.
Banks rose nearly 4 percent as 10-year bonds rose 14 points. The gains represented the biggest daily increase since October 2008 and will provide relief to investors who were forced to endure the worst crash since 1987 in a month of turbulence.
Currency traders and investors, like those using Tigerpay, have had a turbulent few days in the Japanese market. Tigerpay allows users to own and use multiple currencies, including cryptocurrencies, making it a popular choice for crypto gambling, stock trading, and foreign currency holders. According to writer Makoto Fukae, Tigerpay allows holdings of Japanese Yen and other currencies (source:https://readwrite.com/jp/gambling/tigerpay/The low fees and easy account verification make the platform especially popular among gamblers.
Fear of a recession in the US
Significant losses were recorded on global markets on Monday, driven by fears of a looming recession in the US and underperforming tech stocks. A rise in Japanese interest rates also caused the market to react negatively, with the Nikkei closing down 12.4%. At the same time, Wall Street also fell by around 3%.
Yen movements
The yen also hit 143 against the dollar on Monday, a 7-month high, but fell back to 146 on Tuesday. The move was triggered by the Bank of Japan’s recent aggressive shift in economic policy, which led to a reduction in yen carry trades.
On Wednesday, the BOJ announced its second rate hike of the year, with markets expecting more hikes later in the year. The bank has faced widespread criticism for the hike, which could lead it to curtail future hikes, and the bank has tried to calm concerns.
A call for calm
However, despite the market disruption, Japanese Prime Minister Fumio Kishida has… called for calm on the market and said he was optimistic about the economic outlook for the rest of the year.
Japan’s economy is strongly linked to the U.S. More than half of the country’s output is sold abroad, with the U.S. being a major buyer of goods, particularly automobiles and related items. If the U.S. enters a recession, consumers will spend less and U.S. companies will be less likely to import goods from abroad, which could further depress Japanese markets.
Annual performance
Japanese stock markets have been on a year-long high as investors such as Warren Buffett pointed to the Japanese market as a better alternative to the Chinese market. This sentiment led many to invest in the market, but there are now concerns that the bullish market may have been led by the yen and that the recent strengthening of the yen and the sudden fall in the stock market could in fact point to the country’s underperforming currency as the main driver behind the gains.
During the year, some of Japan’s largest companies, including Toyota, posted record profits and the Tokyo Stock Exchange encouraged its companies to offer better returns to shareholders.
Some signs of recovery
Historically, when Japanese markets suffered from global recessions, local investors would jump in to buy up bargains and take advantage of the low stock prices. However, Monday did not see this usual influx of domestic investment and with no new money available, the market continued to wobble.
On Tuesday, stocks staged a significant recovery. By the end of the day, the Nikkei 225 was up 10.2% and followed that up with a 1.2% gain in Wednesday trading. However, those gains only pushed markets back to roughly where they were at the start of the year.
