Latest news with #JapaneseStocks
Yahoo
18-07-2025
- Business
- Yahoo
Japan's $6.8 Trillion Stock Market Faces Reckoning in Elections
(Bloomberg) -- Japanese stocks are at risk of a prolonged decline after the upper house vote this Sunday, if pre-election polls are anything to go by. The Dutch Intersection Is Coming to Save Your Life Advocates Fear US Agents Are Using 'Wellness Checks' on Children as a Prelude to Arrests LA Homelessness Drops for Second Year Manhattan, Chicago Murder Rates Drop in 2025, Officials Say Multiple local polls are indicating that the ruling coalition may lose its majority in the election this weekend, in another setback for Prime Minister Shigeru Ishiba after his surprise loss of majority in the lower house last October. Political concerns are already weighing on the market, with local equities underperforming the MSCI World Index this month. When the ruling parties lose a majority, 'the market needs 35 to 75 days to hit a trough, with the total loss during this period reaching about 8% on average,' said Toshiya Matsunami, chief analyst at Nissay Asset Management. That compares to the Topix index bottoming out in about 15 days if they win, he said. While Ishiba's Liberal Democratic Party-led coalition will likely remain the largest bloc in the upper house, a possible loss of majority is fueling concerns over the government's ability to close a trade deal before the Aug. 1 deadline and its weakened grip on its finances. Opposition parties have largely campaigned on much more expensive plans to lower the sales tax. That's rattled the country's bond market. The 10-year Japanese Government Bond yield hit a 17-year high on Tuesday. The yen is among the worst performing major currencies so far this month amid political shocks and trade flare-ups. The Topix index has dropped 1.2% in July after three months of gains. A potentially weaker minority government may further complicate trade negotiations with the US and rock investor sentiment in the market. President Donald Trump lifted tariffs on Japan to 25%, from 24% originally set in early April. The levy don't apply to sectoral tariffs — 25% on cars and car parts and 50% on steel and aluminum. The car levies are already hitting Japan's exports and increasing the risk of a technical recession. Some analysts said the election may also have ramifications on the country's corporate governance reform, which has been one of the driving forces of Japan's stock market rallies in recent years. 'There is a possibility that the stance on corporate governance may change, depending on who the LDP will form a coalition with,' said Tomochika Kitaoka, chief equity strategist at Nomura Securities. 'Investors don't seem to be paying attention to that,' he added. Growing voter discontent with the establishment, which had appeared largely absent in Japan until now, has helped relative newcomers like Sanseito gain traction in the polls. The right-wing party is pushing for 'a change to an economy where too much profits flow to shareholders.' 'As the economy shifts to inflation from deflation, people who are scraping a living are complaining and we are seeing a rise of populism the West has experienced,' said Shinichi Ichikawa, senior fellow at Pictet Asset Management Japan. 'Japan wasn't an exception after all. There's no doubt that income redistribution will become a key theme from now.' To be clear, the impact of the vote on the country's $6.8 trillion stock market will likely be nuanced. Exporters, which have taken the brunt of US tariffs, may benefit from a weaker yen, while consumer stocks may gain from opposition parties' agenda to cut sales tax on food. But 'if far-right and far-left parties grow, there will be a risk of a triple fall' in yen, bonds and stocks, said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank. How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All Forget DOGE. Musk Is Suddenly All In on AI How Hims Became the King of Knockoff Weight-Loss Drugs The Quest for a Hangover-Free Buzz Thailand's Changing Cannabis Rules Leave Farmers in a Tough Spot ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
16-07-2025
- Business
- Bloomberg
Japan's $6.8 Trillion Stock Market Faces Reckoning in Elections
Japanese stocks are at risk of a prolonged decline after the upper house vote this Sunday, if pre-election polls are anything to go by. Multiple local polls are indicating that the ruling coalition may lose its majority in the election this weekend, in another setback for Prime Minister Shigeru Ishiba after his surprise loss of majority in the lower house last October. Political concerns are already weighing on the market, with local equities underperforming the MSCI World Index this month.
Japan Times
15-07-2025
- Automotive
- Japan Times
Tokyo stocks hit by a perfect storm of tariffs, politics and budget worries
Japanese stocks have been stuck trading below their peak for more than a year, hit by the trade war, then by political instability and increasingly by fiscal concerns. The Nikkei 225 index is down 3.87% on year, and off by more than 6% from its record of 42,426.77 reached on July 11, 2024. This comes as indexes globally are rallying, with the Standard and Poor's 500 and the Nasdaq Composite indexes in the U.S., Germany's DAX and South Korea's Kospi all at or near records. Bonds in Japan are also faring poorly, hit by a rout in late March and early April as the reality of U.S. President Donald Trump's tariffs started to hit home. They retreated again this week ahead of Upper House elections scheduled for July 20. "It seems there's still significant uncertainty surrounding the tariffs,' said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. Earnings season in particular is weighing on sentiment, as the effects of the trade war might start to show up in results. Sales might drop for some companies due to higher U.S. duties, while profits might fall at companies that chose to cut prices to maintain sales. Most Japanese goods bound for the United States are subject to 10% tariffs, while cars are charged 25% and steel and aluminum 50%. Japan and the United States have made no significant progress in tariff negotiations despite months of dialogue. Talks have been on the verge of breaking down at some points, adding to the confusion. 'The tariffs on automobiles, a core industry to the Japanese economy, have led to the underperformance of the auto sector," Ichikawa added. Toyota shares are down 22.55% over the past year, while Honda is off 10.50%. Eiji Sato, portfolio manager at Nakano Asset Management, said that investors want to confirm that companies are still growing and increasing profits before jumping heavily into stocks again. 'With the earnings season approaching, it seems a wait-and-see stance is spreading,' he said. Politics are weighing especially heavily on the markets. Some polls indicate that the Liberal Democratic Party-Komeito coalition could lose its majority in the upper chamber of parliament this weekend. The coalition failed to win a majority in the Lower House election last October. If they become a minority government, instability could follow. A scramble to pull together a workable coalition might result in a period of policy uncertainty, while negotiations with the United States over tariffs could stall completely if there's a leadership vacuum. Prime Minister Shigeru Ishiba might step down. If opposition parties gain more power after the election, the government will be under intense pressure to introduce a number of expensive policies. These include cutting the consumption tax — currently set at 10% for most products and 8% for food items — to help households make ends meet. The possibility of measures like this have increased concerns about Japan's fiscal health. 'If the scenario were to take a turn to the downside, I believe Japanese stocks would likely be forced into a correction phase after the election,' Sato said. The bond market has been rattled ahead of a possible shift to looser fiscal policy. The 30-year Japanese government bond yield surged to a record 3.2% on Tuesday, while the 20-year yield jumped to 2.65%, its highest level since November 1999. The benchmark 10-year yield climbed to a 17-year high of 1.595%. Bond prices move inversely to yields. Analysts said that stocks aren't likely to start rising again until the fall. Since tariffs will eventually drag down the U.S. economy, economic indicators will likely show signs of a slowdown after the summer, Ichikawa said. If that happens, calls for rate cuts by the U.S. Federal Reserve are expected to grow, and rate-cut expectations will strengthen the view that the economy will recover next year, which could help stock performance, he said. Sato also pointed out that once uncertainties over the Japanese political situation and the U.S. tariffs clear after the summer, Japanese stocks could enter another upward phase. He added that a number of Japanese companies are tackling corporate reforms to improve stock value. 'We interview a lot of companies every quarter and are really seeing changes within their businesses. Thus, we have high expectations for them,' he said.
Japan Times
03-07-2025
- Business
- Japan Times
Foreign buying of Japan stocks hits longest spell since 2013
Foreign investors bought Japanese stocks for 13 straight weeks to June 27, their longest buying spree since 2013, data from Japan Exchange Group showed. The persistent buying — despite lingering concerns over U.S. tariffs and still sluggish domestic consumption — likely points to diversification away from U.S. equities, as investors pare positions after Wall Street's strong showing. "It's my guess that this reflects investors trying to diversify their U.S.-concentrated portfolio,' said Shuji Hosoi, senior strategist at Daiwa Securities, noting that such shifts could last about a year. Foreign investors bought ¥339.8 billion ($2.36 billion) of Japanese equities in the week of June 23 to 27, extending their net buying which began in the first week of April, when the market had plunged following the shock of U.S. President Donald Trump's extensive tariff plan, some of which has subsequently been amended. It is the longest stretch of net purchases since their 18 straight weeks of buying from November 2012 to March 2013, when investors snagged ¥5.7 trillion of Japanese stocks following radical economic stimulus by then-Prime Minister Shinzo Abe, or so-called Abenomics. The latest buying by foreign investors helped lift the Topix index to lofty heights. The Topix rose to a peak of 2869.07 on Monday, just off its record high of 2946.60 struck in July last year. The benchmark has lost steam since then on renewed worries about U.S. tariffs. But some analysts think their buying may wane. "There's no sense of euphoria we saw during Abenomics. I think foreign buying will slow in July,' said Kohei Onishi, senior investment strategist at Mitsubishi UFJ Morgan Stanley.
Free Malaysia Today
03-07-2025
- Business
- Free Malaysia Today
Japanese stocks saw strong foreign appetite in the week to June 28
The Nikkei surged 4.55% last week, the most since September 2024. (AP pic) TOKYO : Foreigners turned net buyers of Japanese stocks in the week to June 28 on easing Mideast hostilities and investor optimism over a rally in technology stocks. They bought a net ¥651.3 billion (US$4.53 billion) worth of Japanese stocks during the week, the highest in six weeks, marking their 12th week of buying out of the past 13, data from Japan's finance ministry showed. The Nikkei surged 4.55% last week, the most since September 2024, as a renewed global optimism over artificial intelligence boosted chip-related stocks such as Tokyo Electron and Advantest by 14.72% and 7.67%, respectively, and SoftBank Group, an AI investor, by 12.26%. Foreign inflows, including last week's net purchase in domestic equities, totaled about ¥7.46 trillion for the three months ending June 30, the largest figure for a quarter since June 2023. Long-term Japanese bonds also saw a robust ¥1.05 billion in net foreign inflows last week. Foreigners, however, ditched a net ¥633.9 billion in short-term bills. Japanese investors, meanwhile, bought ¥190.6 billion worth of foreign stocks, ending their six-week-long selling streak. They also added a net ¥182.8 billion worth of foreign long-term bills in a third successive weekly net purchase.
