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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: FACTUAL who wrote (1641)	12/8/1998 11:24:00 PM
From: Step1	Read Replies (1) \| Respond to of 3902

Wow! Where do I start or do I want to start on this "piece de resistance"? The huge shifts in Japanese society that you have written about in your post ( and you seem to be well informed on top of that) are I believe very deeply rooted. I equal them with a move of tectonic plates. I don't think those changes will stop even if Japan regains its top place in the G-7. Now why are they happening (and many say they are not happening fast enough) is a good research topic for a social scientist to take on. I can think of a few reasons but make no claim to being an expert on Japan and Japanese culture. 1- Economy is not doing well and people are starting to get pissed off. They are also insecure about the future and are starting to ask troubling questions. 2- Age , demographics rather. People in their 20s ( fairly passive I should say) and people in their 30s (more proactive I think) are seeing that the present pie is not as sweet and , what is worst, is getting smaller. They will also have to shoulder a much heavier burden than the present 40-50 generation. 3- The incredible creation of wealth that had taken place in the 80s had allowed people to travel, but more importantly , Japanese people (students especially) are spending extended amounts of time overseas, mostly the US but also Canada, Australia and Europe and they are coming back changed. They certainly want to make Japan better by integrating what they have learned elsewhere. That is all I can think of for now. I would certainly put number one ahead of everything else, the slump in the economy is going to make even bigger waves if it gets worse. That is what is really driving the changes I think, but at the same time, other factors all contribute. In the course of my work, I sometimes distribute small home made surveys to people, asking them what they think of the current state of affairs, the economy, etc... While the results are not empirical and the method is not especially scientific, it still gives me a very personal feeling of what people think. Last week I was doing such an activity with people between 26 to 55. The group was small , maybe 10 to 12 people. I won't write the questions but here are some general findings: People between 40-50 think the stock market is a place to lose money. People between 30-40 can't invest because they have mortgages. People in their 20s think either way, have not thought about it or would rather spend the money on new gadgets, cars etc Except for three in their 20s, all the others would save the money is they were given the equivalent of 10,000 usd (for the threee in their 20s, one would repay his car loan, the other would buy a computer and save the rest, yet the other one didn't really know) Nobody has thought of a foreign bank to deposit their money, the post office seems to be the safest place although the guys with mortgages bank with the institution that extended the loans and don't use the post office. Most said they were optimistic about the future of Japan and again most said they thought it would take two years for Japan to get back on its feet. Now , as I said the group is not big enough to be representative of any trend , scientifically speaking, but still the talks were instructive. That most people told me the stock market is a place to lose money is no surprise, after you look at the way the Nikkei has performed in the last 8 years. Some of the people I teach had also bought some of their own company stock, and that ... well it didn't sit too well with them as you can imagine... Personally I think that the average "career" type (people working for the gov or larger companies, the guys I talked to) will not invest for a long time for the following two reasons: (assuming an age group between 40-60) 1- they have mortgages and in fact probably paid more than it is now valued 2- They have lost a lot or know people who have lost a lot on the market. They are very wary of stocks and have the "show me the money" attitude. Caveat: their wife probably makes the investment decisions anyway, as is the case for 95% of that age group. Still extremely common for the husband to get a stipend for the month and to turn the whole pay check to his wife. This is my opinion only and I could be wrong of course. However the market certainly doesn't have any of that "feel good" touch as the NYSE, companies are still ripe with scandals and probably a lot more skeletons in their closets, etc... When I mention that I buy stocks, people usually qualify me as a gambler, as for them buying stocks directly (not Fondo= funds) equates gambling. As far as your last part of the message; How far will it go? I really don't know. All the best Stephan

To: FACTUAL who wrote (1641)	12/10/1998 12:27:00 AM
From: borb	Read Replies (1) \| Respond to of 3902

NEW YORK, Dec 9 (Reuters) - U.S. officials may be backing off their long-held ''strong-dollar'' policy, fueling market expectations that the greenback will linger near its recent lows against the Japanese yen. Japan's Finance Minister Kiichi Miyazawa on Wednesday told parliament Washington is concerned about the ever-widening U.S. trade shortfall and may seek to weaken the dollar to narrow that deficit. ''He's being very honest and I think he's right. I suspect U.S. authorities may have already made a quiet policy shift to seek a weaker dollar rather than a strong dollar,'' said Takanobu Igarashi, an economist at Sanwa Bank Ltd. New York. The dollar fell nearly two yen to as low as 117.55 yen in Wednesday trading, and dealers cited Miyazawa's comment that U.S. leaders were comfortable with a rate between 110 and 120. That's a far cry from the dollar's eight-year high at 147.65 yen reached in August. ''Miyazawa may be attempting to influence traders by saying 'If the dollar goes outside that range, the Japanese government could intervene''' to keep it there, said Arthur Alexander, president of the Japan Economic Institute of America, a Washington think-tank partly funded by Japan's Foreign Ministry. U.S. Treasury Secretary Robert Rubin, who engineered the dollar's rebound from post-World War II lows in 1995, has repeatedly denied any shift in policy. Rubin rarely misses an opportunity to reiterate that a strong dollar is in the United States' interest, though he has at times said he shared Japan's concern over the yen's weakness. Rubin's support helped reverse a slide that began under his predecessor, Lloyd Bentsen, who triggered massive dollar sales by saying a weak dollar might make U.S. goods cheaper to buy overseas, stimulating U.S. exports. But Rubin was noticeably quiet during the greenback's plunge this fall. After joining Japanese authorities in intervening to push the dollar off a June high at 146.75 yen, U.S. officials watched silently as the dollar fell from 136 yen to 111.33 yen between October 5 and October 8. The dollar has since stabilized, generally trading between 115 yen and 125 yen. U.S. officials made no immediate comment on Wednesday. The U.S. Commerce Department on Wednesday reported the deficit in the current account -- the broadest measure of U.S. trade -- widened 8.1 percent to a record $61.3 billion in the third quarter from the second quarter. Economists have long expected that the huge flow of dollars into world currency markets as the United States continues to import far more than it exports must eventually weigh down the greenback's value. ''We have to wait for the U.S. economy to get much weaker as U.S. exports get significantly worse, but that time will surely come. Exports have already declined to Asia and Japan and now they are declining to Latin America,'' Igarashi said. As the global economic slowdown drags on into 1999, demand for U.S. products is expected to weaken, pushing U.S. economic growth below 2 percent annualized in early 1999 from 3 to 4 percent in late 1998. But a weaker dollar might exacerbate global problems, even as it temporarily improves the U.S. trade outlook. Many Asian nations, for example, find it easier to export when the dollar is strong, said Bob Sinche, currency strategist at Citibank. ''I think the bigger U.S. concern is getting the entire economic pie to grow faster rather than divvying it up differently by shifting exchange rates,'' he said. Sinche agreed that the dollar is likely to keep falling against the yen, but more because a recent rise in Japanese interest rates has made investment in yen-based assets more attractive than because of exchange rate manipulation. ''Artifical strengthening of the yen would be counterproductive for Japan and the rest of the globe and I think (U.S. officials) realize that,'' he added.