This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Global Macro: A Closer Look at Japan's Economy

Stocks in this article: NKYVT

NEW YORK ( TheStreet) -- The Japanese stock market recently has enjoyed a rise similar to that seen in U.S. equities.

The chart below highlights just how significant the increase has been. The chart pairs the MAXIS Nikkei 225 Index ETF (NKY) over Total World Stock Index ETF (VT).

The price appreciation has been nothing short of exponential. Since Prime Minister Shinzo Abe implemented his sweeping reform of both monetary and fiscal policy, markets have taken off.


Equity has been the in-demand asset class for investors across the world as of late, and it doesn't look as if this trend will be letting up anytime soon.

The weakening yen and increased consumer confidence in Japan are helping the rally. Although inflation data are far from the desired 2%, Japanese stocks are likely to see further moves higher.

The next chart highlights the economic validation for the exponential rise in the Japanese Nikkei index. The weakening yen has allowed the export-driven Japanese economy to gain a competitive advantage over other countries.

South Korea and Australia have said the weakening yen is having tangible effects on their economies, but in recent world conferences, global leaders have looked favorably upon Abe's policy. As long as the yen remains weak against the U.S. and Australian dollars, exports should continue to grow.

The increases in Japanese stocks and corporate profits have driven consumer confidence higher in Japan.

The wealth effect has played a role in both consumer spending and consumer confidence. In the charts below it is apparent that the new expansionary monetary and fiscal policies have led to real gains in the economy.


As the consumer goes out to spend and confidence increases, riskier assets will continue to dominate the Japanese market.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,677.90 +216.58 1.32%
S&P 500 1,950.82 +23.71 1.23%
NASDAQ 4,452.7920 +69.9450 1.60%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs