Tokyo stock market bounces back
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.THE TOKYO stock market is bouncing back with a vengeance after falling to a six-and-a-half year low last week.
Yesterday, the Nikkei 225 stock average closed at 17,555, up 1,013 points, in heavy trading ahead of today's planned announcement of a supplementary budget by the government to stimulate the flagging economy.
In only seven days' trading the Nikkei has risen 3,246 points from its low of 14,309, which prompted Tsutomu Hata, the Finance Minister, to announce emergency measures to help the creaking financial system that was pulling the market down.
Jesper Koll, chief economist at S G Warburg, said: 'The stock market is impressed by the fact that the government is finally prepared to do something. Psychologically this has been very important.'
Yesterday's rally was marked by a substantial increase in turnover - some 620 million shares changed hands, compared to an average daily turnover of 200-300 million in the last couple of months. The last time turnover was so high on the Tokyo market was in September 1991.
The main reason for yesterday's surge was the prospect of today's supplementary budget announcement, details of which have been widely leaked. The government is expected to announce a fiscal package of Y9,000bn (pounds 37.5bn), a third of which will be designated for supporting the financial system.
The total amount in the package - as leaked - will be Y2,000bn more than had been expected until last week's shock reaction by the Ministry of Finance to the steep fall in the market.
However, some analysts have warned that the rally could be temporary, as investors who have been badly hurt by the market's fall in recent months may be tempted to take profits from the recent upsurge - particularly since Japanese corporations continue to announce gloomy profit forecasts.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments