Japanese markets are underperforming. Many reasons may contribute to the increasing fall in the share market. However, the main contributor is the treasury yields and elections. The investors are also becoming negative for their current investment in the Japanese share market. They anticipate a fluctuation in the cut rates. The Federal Reserve may announce a fall or rise. However, the rise in the treasury yields will only deteriorate the investor’s interest further. Borrowers will prefer investing their money in bonds rather than stocks. The increase in the rates or treasury yields will make it more expensive for the business to borrow money.
Why Are Investors Losing Interest In Japanese Markets?
The Japanese market is falling due to shifts in investor’s expectations. Not only the treasury yields but the lower house election is among the other major causes. As the elections are near, no one is willing to stake their money in the market. Elections are always prone to uncertainty in the market. Thus, no one can say where the market will lead post elections. According to details, Nikkei is already down by 0.80% to 38,104.86. The fall comes after the current ruling party seems to be losing majority in the elections. Thus, if the Liberal Democratic Party (LDP) and Komeito do not get the majority in this election, the market may follow a major fall.
However, things may reverse also if the opposite takes place. Several companies are performing well, especially in the automobile segment. Automakers like Honda and Toyota are the major automobile exporters in Japan. Thus, the weak yen can attract more customers from the international market to Japan’s Honda Motors and Toyota. Thus, it will lead to an increase in their sales all of a sudden, spiking their share up to 2-3%. As these automobiles become cheaper, they will prefer buying them from Japan’s automobile companies.
However, other companies like Staffing Agency Recruitment Holdings fall by 4.9%. Among all these ups and downs, Tokyo Metro’s IPO has become a super hit. It performed exceptionally well in the market beating everyone’s expectations. The company’s shares witnessed a surge of 47% on its first day of trade. Thus, it will not be wrong to say it a Japan’s biggest IPO in the past 6 years. The company raised $2.3 Billion from the IPO. If we talk about the broader Japanese market, Topix also had a fall of 0.55% reaching 2,636.96. Stay tuned for more information on our website.