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Japan: Nikkei Drops -7.3%

scott
edited May 2013 in Fund Discussions
EWJ, DXJ 4:42 AM Even Japanese stocks are subject to the law of gravity (who knew?) as a confluence of factors sends the Nikkei (EWJ, DXJ) plunging 7.3% on the session (the swing from intraday high to low was ~9%). Yields on JGB 10s (JGBL) spiked above 1% at one point as an already skittish and volatile market was further rattled by what have generally been perceived as hawkish comments out of Ben Bernanke and other Fed officials on Wednesday. Yields pulled back in late trading. Compounding the problem for Japanese stocks was the yen (FXY), which has strengthened some 2% against the dollar to 101.16 most recently. (See also: China HSBC flash PMI shows contraction) [Global & FX, On the Move] 2 Comments
http://seekingalpha.com/currents/all

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Comments

  • AndyJ
    I had a fleeting thought last night about putting in a low bid for some EWJ after yesterday's dip ... naahhh.
  • InvestorInvestor
    To put it perspective. The Japanese market was up 40% so this is a correction. Yes, it is a big correction but YTD return even after this correction is amazing.
  • scott
    edited May 2013
    Reply to @Investor: I won't disagree that it's a correction. However, it's the kind of correction where everyone was clearly on one side of the boat (somewhat similar to Apple) and that may continue to play out. Japan's fundamental picture also remains lousy. I believed - and still believe - this Japan situation was "a trade". Will there be another opportunity to get in? Maybe, but hopefully it will be based upon something like actual fundamental improvement.
  • catch22catch22
    It is not just the YTD headline; tis a 70% run since the run began in mid-November, 2012, via DXJ. And I agree, it is the hot/big money always looking for the next big thing. Does not have a lot to do with fundamental aspects.
    One may only imagine what the click points are set to in the algo systems, waiting for the next "flip".
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