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To: Softechie who wrote (1990)	3/5/2002 11:00:29 AM
From: Softechie	Read Replies (1) \| Respond to of 2155

F/XTRA: Nikkei Doomsayers Will Have Their Day 05 Mar 05:09 By Nicholas Hastings A Dow Jones Newswires Column LONDON (Dow Jones)--For the Nikkei, the end is nigh. Its month-long climb has taken it up 20% from an 18-year low at the start of February and dominated sentiment among yen bulls. Talk of a dollar decline to Y130 has become more common by the day as the advance of stock prices has continued. But like other Japanese stock market rallies at this time of the year - it is built on sand. Gains are as much related to the looming end of the financial year as anything else. As similar strong rises in February and March last year and the year before showed, the upflow had washed away by April. Of course, the bulls will always hope this year will be different, citing the recent ban on short selling or the sharp recovery in U.S. stock markets as reason for the rise. And back in 1999, when the Nikkei last broke a 200-day moving average, it continued higher for much of the year, one bull even suggests. Certainly, short covering has been instrumental in pushing Tokyo prices higher, while gains on exporter equities amply illustrate the market's dependence on U.S. recovery. Moreover, the rise in the Nikkei will have brought a degree of forced movement into Japan as investors seek to maintain international portfolio balance. Further support is expected from end-year repatriation as some Japanese firms traditionally boost their balance sheets around this time. This year, though, the risk of some official market manipulation (even if no one admits to it!) is higher than usual, given the risks to the Japanese financial system if stock prices continue to slide. And what with new mark-to-market rules and the large exposure Japanese banks have to their own domestic stocks, the need for some rebound in prices had become imperative. But who will continue buying Japanese stocks once this is all over? Bulls at thislevel will need to bet on a continued rise in the yen - and the economy itself - which even Japanese politicians admit is up against the wall. This Friday's GDP data is expected to show the economy contracting by as much as 2.8% in the last quarter. Meanwhile, last week's attempt by the government to turn things around with a major anti-deflationary package proved a major disappointment with the Bank of Japan finding itself forced into another attempt at easing monetary policy to compensate. Finally, and disappointingly, expectations that the reformist zeal of Prime Minister Junichiro Koizumi would eventually see the country through have only gone from bad to worse, with a new poll in the Nihon Keizai Tuesday showing that 87% of business leaders see him "slightly" or "way" behind his schedule of structural reforms. This alone helped damp the Nikkei Tuesday as it backed down nearly 102 points and helped the dollar to recover from a steep dip under Y132. Find F/XTRA daily around 1000 GMT on: Telerate pages 4235 or 1147 Dow Jones Newswires by searching the code N/POV Bloomberg by entering TNI POV FRX -By Nicholas Hastings, Dow Jones Newswires; 44 20 7842 9493; nick.hastings@dowjones.com (END) DOW JONES NEWS 03-05-02 05:09 AM