Japan Real Time Charts and Data

Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Japan related comment. He also maintains a collection of constantly updated Japan data charts with short updates on a Storify dedicated page Is Japan Once More Back in Deflation?

Wednesday, May 09, 2007

The state of the Japanese stock market

by Scott Peterson

Carl T. Delfeld over at SeekingAlpha asks "Is Japan's Stock Market on a Downward Spiral?"...he points out a couple of facts that I hadn't noticed before:

-"Having comprised a third of global market capitalization in 1990, Japan's market capitalization is now less than one tenth that of the world's $49,900 bn"...

-"Michiyo Nakamoto of the Financial Times goes on to say that in a stark sign of Tokyo's decline, the number of foreign companies listed on the Tokyo Stock Exchange has plummeted from 125 in 1990 to just 25...all of this seems to highlight a lack of confidence and risk taking so vital to growth in financial services"...

I don't know what advantage there ever might have been to listing on the TSE for foreign companies, given that Japan's securities and accounting practices have been quite different from those in the US and the EU. The key point to me is that even if Japan's market cap has increased in absolute terms since 1990, the failure to keep up with the rest of the world is glaring. However, in 1990 Japan's market cap was at the peak of a bubble-driven bull market, and since then the unwinding of that peak has likely been the primary driver of the decrease in share of the world's market cap. So this information is probably not a great indicator of where things are headed for Japan.