Japanese shares reached their highest level in 31 years on Tuesday. Certainly, global markets are in a good mood as investors continue to boast about continued economic recovery. But the global economy is also serving Japan well.
Rose 714 points or 2.7%, Tuesday. The index peaked at 27,568 and briefly touched 27,601, the highest level since 1989.
Other global stocks popped up on Tuesday, but less.
The index closed up 1.6%,
The index was up 1%, and
Stokes Europe 600
The index rose about 1%. The US stock market has been on the upside for the last several trading sessions, but has briefly stopped on Tuesday.
Dow Jones Industrial Average
About 100 points down in afternoon trading. While the Kovid-19 cases are on the rise worldwide, fiscal stimulus measures are supporting consumers and businesses, and many are on the road to mass distribution of biotech vaccines.
But some recent developments stand for the Japanese economy and markets. Nikkei companies have been made aware of the right geographies and regions to benefit from the developments.
Fiscal stimulus is hitting gear in major regions around the world. The US passed a $ 900 billion fiscal stimulus bill that would support individuals and small businesses. South Korea’s President Moon Jae-in confirmed the third round of direct payments, which amounted to 9.3 billion won, or about $ 8.5 billion for individuals and small businesses. Companies on the Nikkei 225 see an average of about 13% of their revenue from the US and 2.8% from South Korea.
It is more exposed than other indices worldwide. Companies on the Hang Seng Index receive 3% of revenue from the US and almost nothing from South Korea. Stoxx 600 companies see around 20% of revenue from the US, but only 8% of the index is in consumer cyclicals, with profits as profits and consumers returning to pre-epidemic levels – or spending higher. . This risk is another key for Nikkei: About 18% of Nikkei 225 companies are consumer cyclical companies.
What’s more, Japan is an export-oriented country that wants its currency to be relatively weak to make it globally competitive. The yen, however, has strengthened against the dollar and renminbi, both of which are used to buy Japanese exports. Nevertheless, the currency’s headview for Japan is influenced by the bright global economic environment, Quincy Crosby chief market strategist at Prudential Financial Baron’s.
Japan’s recent strength has attracted notable investors. For one, Warren Buffett made surprise bets on the country in September.
Jim Rogers, a Singaporean investor who co-founded the legendary Quantum Fund with George Soros, has cited Japan’s monetary policy as a major force in the country’s bull market – a view he called Repeated on Tuesday. “The head of the Bank of Japan goes to work every morning like a good Japanese bureaucrat and works as fast as money (word unlimited’ is his word). He then buys stocks, bonds and ETFs as fast as he can, ”Rogers wrote in an email. He said that he owns the Japan ETF.
Rogers says that it helps that Japan has a new government, headed by Prime Minister Yoshihide Suga. “New governments always work to make people happy. This one is no different.”
Write Yakub Sonnashine @ Yakub Sonshine. Com