The Nikkei Rollercoaster Rebounds Nearly 3% (EWJ, ITF, VPL)

The 7.8% correction that had been underway until yesterday may never reach the 10% level brokerages and analysts cited as a good point to re-establish positions in Japan after heavy foreign investor selling since February 7th. Today the Nikkei 225 Stock Average rebounded 2.96% and the TOPIX 2.57%. Most had today pegged as another down day with no perceived positive influences on Japanese equities. This changed abruptly pre-market as foreign brokerages had net buy orders in place, something not seen for nearly 2-weeks according to Reuters. This forced shorts to cover and brought bargain hunters out to snap up relatively cheaper shares. Property stocks were hot as a report showed rents rising in central Tokyo.

Two N225 stocks with ADRs that surged in Tokyo today include: Kubota (KUB) +5.4% to 1,073 yen and Nomura Holdings (NMR) +5.16% to 2,140 yen.

Despite today's surge in Japan, don't expect iShares MSCI Japan Index (EWJ) to see a similar jump since when the US market was closed Monday, Japanese stocks traded lower, so the net gain over the past two trading days in Tokyo stands at about 1.5%. That's not a reliable figure however, because the yen is also trading weaker against the dollar, now approaching the Y119 /US$1 level. In pre-market trading today EWJ was up .38% or 5 cents to $13.35.

Note: For the Kubota chart below, 1 KUB ADR is equal to 5 ordinary shares, thus the wide difference between $45 per ADR share and 1,073 yen per ordinary share.

KUB 1-yr chart:

NMR 1-yr chart:

EWJ 1-yr chart: