Markets celebrate as Japan’s QE outweighs Eurozone austerity

Posted: April 10, 2013 in Eurozone Economy, Japan
Tags: , , , , , , , , ,

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The Dow Jones finished yesterday with a new all-time high closing price with a reading of 14,673. During the day it hit an inter day high of 14,716.

To be frank, the rise was too small to give a specific reason. Once the Dow hits an all-time high, it only needs to rise by a fraction of one point to hit a new high.

The overall trend is more interesting. So far this year, the Dow Jones is up 1,569, or by 12 per cent. The year started with lots of euphoria as US jobs improved. US consumer confidence played with a five year high, data from Germany and China suggested a pick-up, and a general feeling that the Eurozone was past its worst dominated sentiment.

Frankly, a lot of those reasons are now gone. The latest jobs report from the US was disappointing, US consumer confidence has fallen sharply, the German recovery appears to have slowed, and news out of China is ambiguous. As for the Eurozone, well: oh dear!

Yet still the markets rise. Part of the explanation is that corporate results continue to belie economic performance. A bigger explanation might be that the markets have given the thumbs up to Japan.

At last, or so they say, Japan is doing the right thing. Nobel Laureate Paul Krugman has described the latest moves out of Japan as very good news.

As for the rest of the markets: the FTSE 100 ended yesterday at 6313, up 36 points on the day before, and up 0.07 per cent so far this year. In Germany the DAX closed at 7637, down 25 points but up by just 0.3 per cent this year – that makes sense. As for Japan, the Nikkei 250 closed at 13,192. It saw modest falls on the day before but so far this year is up a very impressive 27 per cent.

That may just about say it all: Japan up 27 per cent so far this year, Germany flat.

©2013 Investment and Business News.

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Comments
  1. TSBroom says:

    It’s about time Japan’s economy seemed ‘normal’ again. Just their massive national debt needs to be tackled.

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