Nikkei Down Again for 6th Straight Day (TM, HMC, TDK, FUJIY, KYO, ATE)

The Japanese stock exchanges and related indices have been on a downward trend over the past several trading days largely due to the negative guidance perceived from the U.S. exchanges and economy. In fact, the Nikkei 225 has been down 6-straight trading days and is at its lowest point in a month. Nonetheless, it remains up sharply over the year and in a few months time this period of selling will be seen simply as a slight correction and nothing hindering Japan's economic recovery. I still stand firm in my position that Japanese domestic investors, primarily retail, need to be more rational or in other words, bullish on their own economy and willing to buy Japanese securities (click here for more on this issue in an earlier post). Read on...

Another area of increasing concern is the weakening yen, which easily broke through the psychological threshold of Y115/US$1 yesterday. Generally this is good news for exporters but it has been stymied by unfavorable economic data out of the U.S. as fear of rising inflation and lower consumer confidence will crush any potential benefits of a favorable currency exchange rate for exporters. Therefore, the Japanese giants in autos and tech have seen their shares lose some ground, including: Toyota (ticker: TM), Honda (HMC), TDK Corp. (TDK), Fuji Photo Film (FUJIY), Kyocera (KYO), and Advantest (ATE), among a basket of many others.