Japan’s Post Disaster Economy

March 21, 2011 - PRLog -- Traders pumped a record quantity of capital into Japanese equities last week, capturing the appeal associated with a sudden fall in the Nikkei immediately following the catastrophe throughout Japan.
   
According to data from Thomson Reuters Lipper services, an enormous sum of $956 million was injected into U.S.-based Japanese equity mutual funds and Exchange Traded Funds (ETFs) during the 7 days following the quake.

A significant portion of that new money proceeded directly into Japanese investment ETFs, which included 98%, or $936 million, from the complete sum. That's the largest regular influx on file, as well as nearly double the prior record established during the fall of 2005, stated Jeff Tjornrhoj, head of Lipper Americas Research.

The iShares MSCI Japan Index Fund (EWJ), the biggest Japanese tracking ETF, enjoyed the biggest boost.

On Tuesday alone, traders inserted $692 million into the fund, whose leading holdings include the Japanese-traded shares of Toyota, Honda, Mitsubishi, Canon, Sony and Tokyo Electric Power Co. This was the biggest single-day influx on record for the Exchange Traded Fund.

A large number of traders who have been observing the Japanese marketplace with the intention to invest will be looking at this particular drop in the marketplace as being the very best entry point since the economic crisis in 2008.

Japan has become an export economy, and they have needed to tackle a powerful yen. In the event that the yen weakens, Japanese goods could become even more appealing in the global market place, which could in turn be a good thing for Japanese companies' revenue.

Zinnia Financial specialists hold a positive about how the earthquake's effect may have a comparatively moderate long-term impact on the Japanese, as well as, worldwide economic climates.

“As soon as the nuclear energy situation is in check, the marketplace should recuperate rapidly,” said Zinnia Financial analyst Bret Stevens. Following a bottoming on Tuesday, the Nikkei has jumped nearly 7%.

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