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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up?
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To: Professor Dotcomm who wrote (1763)3/14/1999 10:41:00 AM
From: chirodoc  Read Replies (2) of 3902
 
Japan Emerges from Denial, While Malaysia Comes Full Circle
By Christopher Wood
Special to TheStreet.com
03/14/99 12:16 AM ET


Wall Street's continued exuberance prompts the thought that Federal Reserve Chairman Alan Greenspan might finally move to tighten 10 years after former Bank of Japan Governor Yasushi Mineo moved to deflate the Japanese asset bubble. The Bank of Japan's tightening actually began at the very end of 1989. Will Greenspan move before the new millennium?

Greed & Fear used to feel that Wall Street was not a Tokyo-style bubble. That view holds no longer. Massive use of employee options and related share buybacks are prompting creative accounting fiddles, which will result in a future torrent of lawsuits.

Meanwhile, the interesting question is whether the Tokyo stock market can finally move into a sustained bull phase as and when Wall Street expires. The Dow Jones Transport Index has still failed to confirm the Dow Jones Industrial Average's new high, while the advance-decline trend remains far from healthy.

In Japan, this week's announcement of Sony's (SNE:NYSE ADR) restructuring, combined with talk of further public-sector recapitalization of the banking system, provides more confirmation that the Japanese are out of denial, as discussed here last month.

This is obviously positive. Still, Greed & Fear's view is that the current Japanese stock market rally will peter out with the end of the Japanese financial year. Critical developments in coming months in Japan will be the pace of corporate restructuring and the resulting impact on consumer sentiment

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