THE JAPAN STOCKMARKET Has Bottomed?? Possibly, It's had a very explosive rally from it's 12 year bear market lows.
We've been seeing a very strong global rally the past few days and Japan has been exceedingly strong for the past 3 weeks. The Nikkei 225 just blew through it's 200 dma
last night. A very, very bullish development, to go through it's 200 dma with this power and force
stockcharts.com[w,a]daclyyay[pb50!b200][vc60][iUb14!La12,26,9]&pref=G
see how The Nikkei crawled very weakly back to it's 200 dma
early Last May.
stockcharts.com[w,a]daclyyay[dd][pb50!b200][vc60][iUb14!La12,26,9]&pref=G
The Japanese stockmarket has actually been about 2 weeks ahead of the US stockmarket at turns. It was in May of 2001, It only made a slight new low going into Sept 21 2001, having basically bottomed 2 weeks earlier.
It topped in mid Dec 2001, where the NASD and SPX made highs again on Jan 9th 2002. And the Nikkei again bottomed in early Feb, our bottom was on Feb 22, 2002.
This is the first time the Nikkei is above it's 200 DMA since April of 2000.
stockcharts.com[w,a]daclyyay[de][pb50!b200][vc60][iUb14!La12,26,9]&pref=G
we've broken the downtrend that has been in force for 2 years last night with a very big gap upward which is bullish.
The monetary base has expanded a very large 25% in Japan this past year and business inventories are the lowest since 1990. The year of the last recession in the USA.
Business inventories at their lowest levels since 1990, following a sharp reduction of the sort that typically presages a pickup in factory production. The main stock-market index is up 22% in just a month, putting Japan in a technical bull market, although analysts caution that government steps to prop up share prices are a big factor in the rally. And the country's monetary base is surging at more than 25% year on year. If the rise in this basic measure of money supply fails to put a dent in Japan's debilitating bout of price deflation, then a lot of economics textbooks might need rewriting.
Of course, Japan has already rewritten textbooks during its decade of decline, and it is too early to say that the business cycle is sure to recover. Banks are still the chief concern because of their gargantuan burden of bad loans. And a surge in bankruptcies -- such as the collapse Sunday of construction company Sato Kogyo Co., with 590 billion yen ($4.42 billion) in debts -- is likely to damp consumer sentiment and thus suppress household spending.
The Bank of Japan said that he Monetary Base grew a massive 27.5% in the 12 mnoths ending in Feb. That's the greatest growth in the Monetary base in Japan since 1974. 1974 was at the height of the very severe global recession of 1973-74.
online.wsj.com |
