6 Reasons Why Japan’s Nikkei Will Remain Shaky Till April/May of ‘08

Japan's fiscal year ends March 31st.

The Nikkei Stock Average is expected to fluctuate between 13,000-15,000 until at least sometime after the new fiscal year begins in April.

Why?

1. Foreign investors, which make up about 70% of stock trading in Japan, have yet to fully recover from the pessimistic outlook of the market that happened last week before the US stepped in.

2. Even strong earnings for the first fiscal half of '07 couldn't prevent the downward trend.

3. Oct-Dec quarter results are restoring confidence, but… not fully.

4. The U.S. subprime mortgage meltdown reverberates in Japan.

5. Japan's domestic firms are not fully optimistic about their earnings for fiscal '07 and will not give their reports until the new fiscal year begins.

6. Hedge funds and other investors also buy other Asian stocks because of a lack of trust in Japanese shares.

In any event, the stock market is likely to be shaky for the duration, think next 2-3 months, then respond to the earnings reports of Japan's firms in April/May.

Do you play the stock market? 

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