Tokyo Stock Exchange: Nearly $1 Trillion Lost in Just Over 2 Months (EWJ, ITF)

After yesterday's 4% plunge the Nikkei 225 Stock Average managed to close in positive territory following early morning selling that almost dropped it into the 13,000 level. I came across an interesting figure that I'd like to share with you from Reuters' coverage of Tokyo trading.

"Analysts said it is still unclear whether the Nikkei has bottomed out after the sell-off that wiped 103.4 trillion yen ($897.7 billion) off the Tokyo Stock Exchange's first section market value between its high in early April and the close of trade on Tuesday."

iShares MSCI Japan Index ETF (EWJ) 1-year chart:

Comments

[pascal jean...:]

You are looking at it from the wrong angle Steven. The main culprit behind the 20 % fall since 7th of april high has been selloff by 'excess liquidity' driven investors , actually foreign equities invested US mutual funds cancellations can explain this. This said in an earlier comment you were right to mention the very attractive level of the advance/decline ratio which touched a low of 54 % (a low not seen on 11 years), this is a powerful buy signal for Japanese onshore individuals and domestic funds. Technically speaking it is true that until the Nikkei recovers the 15500 level one cannot confirm a rock solid bottom. Nevertheless such a buy opportunity ony appears once in 3 to 5 years on the Japanese stockmarket. The new growth markets (MOTHERS,HERAKLES,JASD... have already stabilized the 14th and 15th which does mean that domestic players are already on the buy side. And of course I do confirm , putting aside the lenght of Nikkei or TOPIX rebound,this is an extraordinary chance to go long.

2006 Jun 15 03:50 PM