Nikkei Weekly Outlook: Eyes on I-banks, Inflation, Yen (EWJ)
Source: http://steventowns.com/2008/06/16/nikkei-weekly-outlook-eyes-on-i-banks-inflation-yen/Posted on Sunday, June 15th, 2008 | In Current Market News, Japan
The Nikkei had a rough go last week indeed, losing 3.6% and the 14,000-level (13,973.73); TOPIX fell to 1,371.57 after a short-lived recovery of 1,400 two weeks ago. No worries though, as Chicago Nikkei 225 futures not only held 14k, but added 140 points to the upside (14,220) setting the stage for a gap up on Monday (Osaka N225 futures: 13,980). The Bank of Japan held its benchmark rate at 0.5%, as expected; meanwhile, the yen has eased to its weakest level against the dollar, ¥108/$1, since late February.
Inflation and U.S. i-bank earnings will weigh heavy on sentiment this week. Lehman (LEH: 25.81 +13.70%) leads off on Monday, 6/16, Goldman (GS: 178.29 +6.92%) is up on Tuesday, 6/17 and Morgan (MS: 41.04 +6.93%) reports on Wednesday, 6/18. Circuit City (CC: 4.35 +3.57%) is scheduled to announce earnings on Thursday, 6/19, which could impact consumer electronics stocks.
Back to Japan, the 25 DMA of Topix-1 advancers/decliners slipped to 97.2%, from its recent string of 110-120-level readings. Decliners outpaced advancers over 2:1 on Friday and 54 stocks hit new lows vs. 14 hitting new highs. The emerging MOTHERS and HERCULES markets are displaying particularly bearish readings in the 70-75%-range, perhaps having something to do with those i-banks bailing on them.
As of Friday’s close the N225 is trading at 16.3x trailing and 16.6x forward earnings, 1.64x book, 1.49% trailing yield and 1.57% forward yield. By comparison, TOPIX (1st Section) is trading at 17.5x trailing and 16.8x forward earnings, 1.51x book and 1.69% trailing yield and 1.74% forward yield.
Tags: Nikkei Futures
Last 5 posts by Steven Towns
- Leaderless, Japanese stocks suffer in typical fashion in September - September 2nd, 2008
- Milking Mitsubishi UFJ - August 18th, 2008
- The Nikkei’s Losing Streak in Focus: No Plunge Protection Needed (EWJ) - July 6th, 2008
- Nikkei Weekly Outlook: Just Wait Until Friday (EWJ) - June 23rd, 2008
- Empirical Evidence Suggests Going Long Japan May Be Timely (EWJ) - June 12th, 2008
banks, Current Market News, EWJ, Gap, inflation, Japan, N225, Nikkei 225 Futures, No Worries, Osaka, Outlook, Topix, Yen
 About Steven Towns (http://steventowns.com)
Steven Towns is a research analyst at Yale University's Development Office. He was formerly a contributing editor at Seeking Alpha. Steven has previously worked in economic and commercial development with Japanese diplomats and as a research associate at a boutique M&A consulting firm. Steven earned a Master's degree in International Management and Finance from the University of Maryland University College. He has Level-1 certification (highest) of the Japanese Language Proficiency Test. For information on investing in Japan, visit: http://steventowns.com |
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