Make it 3-straight Days in the Red for Nikkei as Yen Sustains Reversal, Some ADRs Gain

The last 3-days have been down for the Nikkei 225 Stock Average, sending it from an intra-day high of over 15,885 on Wednesday down to its Friday close of 15,173, for a loss of nearly 4.5%. The sell-off is occurring because the market seems to have gotten ahead of itself and because of the sudden strengthening of the yen after the Fed's latest rate increase and language that the increases are approaching the end. I don't believe this is the time to run away from Japan. In fact you may even find it hard to find a bargain if you are looking for cheaper shares because of the strengthening yen. If it's any indication, the broader TOPIX Index although also down over the past 3-days has lost much less than the Nikkei. And as I have said all along, there remains an abundance of pent-up investment capital in Japan sitting idly or invested in foreign bonds that has the potential to quell the Japan naysayers.

The latest tankan on Wednesday showed that business confidence is strong and still strengthening. In order to prevent further major sell-offs the BoJ must show confidence of its own that it will act decisively from April 1st to end its easy monetary policy. Foreign investors are to thank for this years' gains as they have been net buyers more often than not with great consistency, especially since August. I reiterate that domestic retail investors must step up to the plate and invest in domestic funds and stocks. We'll see who was doing the buying and selling this week and to what extent as soon as the data is made available by the Tokyo Stock Exchange.

Nikkei 225: -81.37 (-0.53%) closed at 15,173.07, opened 32 points lower than prior close of 15,254.44, intra-day high of 15,365.48, low of 15,095.56

TOPIX: -2.88 (-0.18%) closed at 1,580.78, opened a couple points lower than prior close of 1,583.66, intra-day high of 1,595.46, low of 1,572.23

JASDAQ: -0.13 (-0.11%) closed at 117.54, traded between 117.07 and 118.02

Yen: last post rate at Y116.37/US$1

Today’s ADRs to watch based on earlier trading of underlying shares in Tokyo:

* Advancers: NTT (NTT) +0.76%, Kubota (KUB) +0.71%, Mitsubishi UFJ Financial Group (MTU) +0.61%, NTT DoCoMo (DCM) +0.56%, Fuji Photo Film (FUJIY) +0.53%, Toyota Motor ( TM) +0.53%

* Decliners: NEC (NIPNY) -1.93%, Matsushita Electric Industrial (MC) -1.77%, Millea Holdings (MLEA) -1.49%, TDK (TDK) -1.38%, Pioneer (PIO) -1.37%, Trend Micro (TMIC) -1.30%