Hi Maurice, <<I doubt that gaijin were responsible for much of the Nikkei rise from 9500 to 11500>>
You were right!
But I was more spot on:
Message 17191620
Reference:
news.ft.com
Banks say Nikkei was manipulated by Japan
By David Ibison in Tokyo
Published: June 12 2002 21:58 | Last Updated: June 12 2002 21:58
The Nikkei 225 benchmark index was subjected to a series of measures in the run-up to the end of the financial year in March that were designed to ensure it closed above 11,000 points, say senior international bankers interviewed by the Financial Times.
Although government agencies insist their aim was only to enforce the law, bankers believe there was a widespread fear in government circles that there could be a "March crisis" as a result of depressed stock prices.
Observers have long suspected that the market was being manipulated. Overseas speculators with short positions were thought by officials to be responsible for the downward pressure on the market. Masajuro Shiokawa, finance minister, said in March that the market had become a "gambling den" for foreign speculators.
The bankers believe the government initiated a process known as gyosei shido - or administrative guidance - in order to ensure the market closed above 11,000 points, which was considered the safe level at which the banks and companies could avert damaging losses.
In the run-up to the end of the financial year, the Nikkei was struggling at about 9,500 - a level that threatened to push some companies into bankruptcy because their huge securities portfolios had to be booked at market value.
The bankers believe the Financial Services Agency (FSA), the main regulator, with the encouragement of the government, implemented carefully timed measures to curb short selling and halt the market's decline.
They say this involved a drip feed of regulatory penalties, and additional reporting requirements on short-sale supervision. There was also a new "uptick rule", which made it impossible to sell short in a falling market.
They point out that almost every overseas investment bank was penalised by the FSA for illegal short-selling ahead of the March 31 year-end. They claim these violations were almost always technical rather than deliberate.
Allegations of any kind of guidance are denied vigorously by the FSA and the Securities and Exchange Surveillance Committee (SESC), a division of the FSA. They say significant violations of short sales regulations indicated action was needed.
The FSA points to cases such as that of Goldman Sachs which was found to have conducted 2,368 illegal short sales despite having been instructed in 1998 to tighten controls. Morgan Stanley, it alleges, violated short-selling rules and manipulated the share price of one company.
"We could have waited if things had not been so serious," said an FSA official. The official added that the market went up for one simple reason: the news that Japan's economy may be entering a cyclical recovery based on a strengthening US economy |
