Inspired by Peter Drucker’s “Adventures of A Bystander,” this memo is written to myself to reflect the current situations in Japan.
TOPICS OF THE WEEK
In the professional wrestling world, there are two types of wrestlers, a heel and a babyface.
Heel is always a bad guy, and is not liked by people.
Babyface is a good guy, who is simple and straight, and liked by people.
It looks like Germany has two skilful wrestlers. Angela Merkel is a heel, and Wolfgang Schauble is a babyface.
The people watching the Euro-match should pay attention to who comes in front next time.
Don’t overenjoy while Schauble is playing nicely to the opponents. The devil,still, may be in the details which we don’t know!
MARKETS
June 29 %Change
NIKKEI 9006.78 +2.36
TOPIX 770.08 +2.55
The result of EU summit turned the sentiment of the market very positive. The Japanese recovery-related-stocks, such as construction and cement companies contributed to the recent hike. NIKKEI recovered 9000 level.
Some say NIKKEI will reach 10,000 level, which I am doubtful. August is a month of anomaly, usually weaker than July. Without confirming the recovery of U.S. economy, I would believe July raly may be a good opportunity to realize the profit.
POLITICS
The ruling DPJ will be split. The group of 50 people led by Mr. Ozawa, a shadow shogun, has announced departure from DPJ as early as within this week.
Political scene of Japan is very fluid again. This political risk is the largest risk factor to the stock markets. I think the most likely scenario is Noda is going to make alliance with LDP to form a new government after a general election.
ECONOMICS
The possible hike of Sales Tax will push comsumption of expensive items, and will have positive stimulus to the economy before summer of 2014 when 3% increase will be effective. Reliability to JGB will also inceased, and low coupon rate on JGB will continue for a while.
NUCLEAR ACCIDENT & EARTH QUAKE
The radiation level of Tokyo is 0.048 sievert this morning. Same level as of last week. The life in Tokyo is normal.