Japanese shares yesterday rose for a second day, erasing the losses from Christmas Day, as the TOPIX posted its biggest advance in two years.
The broader benchmark and the Nikkei 225 Stock Average were bolstered by gains in electronics makers after US stocks staged one of the biggest rallies of the nine-and-a-half-year bull market as holiday sales kicked off in earnest.
The TOPIX climbed 6.1 percent yesterday and on Wednesday, after dropping 4.9 percent on Christmas Day. Japan has one more day of trading today before a four-day holiday next week.
The resurgence follows a global equity rout in the wake of renewed turmoil in Washington that dragged Japanese stocks into a bear market earlier this month.
The MSCI Asia Pacific Index rose 2 percent in afternoon trading in Tokyo for its biggest advance in eight weeks. Crude oil prices jumped more than 8 percent on Wednesday.
“Year-end shopping demand is robust, a sign that the US economy is still on a solid growth track,” said Mitsuo Shimizu, an equity strategist at Aizawa Securities Co in Tokyo.
“The panicky feeling in markets has receded. When corporate earnings are put into perspective, I can only say that Japanese shares are way too cheap,” he said.
Market participants, who unanimously agree that local equities are inexpensive in terms of valuation, are cautiously forecasting that the rebound could stay largely intact next month.
Kiyoshi Ishigane of Mitsubishi UFJ Kokusai Asset Management Co said he expects buying to persist for two to three weeks, despite possible “ups and downs.”
Technical indicators have been signaling that markets have been oversold.
The 25-day Toraku index, which compares the numbers of advancing and declining stocks on the TOPIX, stood at about 68 on Wednesday, remaining under 80 for seven straight days, a level at which traders consider that shares are due for a rebound.
The TOPIX trades at about 11.8 times estimated earnings, near the cheapest level since 2012.
Japan’s second-biggest brokerage said that the worst is probably over for Japanese stocks, as long as the global economy avoids slipping into a recession.
“It is probably rational to think that prices have reached the bottom,” Daiwa Securities Group Inc chief executive Seiji Nakata said in an interview, a day after the Nikkei 225 Stock Average slid into a bear market.
Still, not everyone was convinced that yesterday’s rally could last.
“Stocks fell too much until now,” said Kazuyuki Terao, chief investment officer for the Japan unit of Allianz Global Investors. “The concern surrounding corporate earnings will linger quite a bit. I don’t think we’re entering a phase where stocks are set for a rebound from here. There’s quite a bit of concern surrounding cyclical sectors like technology companies and machinery” for both the US and Japan.
By at least one measure, the surge has already pulled Japanese equities out of oversold territory.
The relative strength index on the TOPIX was about 38, exceeding the 30 mark for the first time in five days. A level below 30 indicates to some investors that the market might be poised to rise.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last