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Stock price rise doesn’t last long
The Nikkei stock average has risen to the 30,000 yen level for the first time in some 30 years, supported by “surplus money” due to monetary easing measures and expectations of economic normalization due to vaccination. In February, the rate of increase of the Nikkei Stock Average is high even when analyzing the major stock markets of the world. Expectations are rising that the vaccination will normalize the global economy, and foreign investors are also moving to buy Japanese stocks, which are the world’s most sensitive stocks.
On the other hand, in the United States, long-term (10-year) and ultra-long-term (30-year) interest rates (return on the circulation of public debt) are increasing due to expectations of economic recovery. Although interest rates are slowly rising in Japan’s financial markets, share prices in all major countries, including Japan, have remained firm so far. Perhaps the share prices of the major countries have a bit more room to climb.
Photo = AFP / Press photo of Jiji
New York Stock Exchange on Wall Street, USA = Jan 12, 2021, New York City, USA.
However, the stock price is unlikely to continue to rise for long. If prices rise faster than expected in the United States, short- to ultra-long-term interest rates will be under severe upward pressure, and stock prices could adjust globally. Such developments are unlikely to be immediately clarified, but the uncertainties that US interest rate trends have on Japanese stock prices cannot be understated.
Background to the highest price in 30 years
On February 15, the Nikkei Stock Average recovered to the 30,000 yen level since August 1990 and has continued to rise thereafter. Investors around the world are expecting the global economy to normalize due to the vaccination, in addition to the view that the global low interest rate environment will continue, especially in the United States, and Japanese stocks with many mainstream industries such as automobiles. and machinery that I started buying. .
For foreign investors, Japanese stocks are representative of business-sensitive stocks whose business performance recovers as the global economy improves. In the situation where the average Nikkei stock is rising, mutual funds have shifted from advanced IT fields to business-sensitive stocks in the US stock market. On the other hand, the maximum price of Korean stocks, which have many IT stocks, such as semiconductors, is high.
When looking at the exchange rate of the major stock indices from the beginning of February to the 24th, the average price of 30 shares of New York Dow Jones industrial averages, which is composed mainly of conventional industries stocks, is 6.6 %, and NASDAQ, which has a lot of advanced IT stocks like GAFAM. The overall index was 4.0%. During the same period, the rate of increase in the average Nikkei shares was as high as 7.3%. Currently, Japan’s share price is believed to have accounted for an increase of around 30-40%.
In other words, the number of foreign investors expecting an expansion in business performance towards the second half of the year is increasing. Some foreign fund managers hope to achieve higher earnings growth.
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