Extreme volatility in the market seems to be overdone, but none o... by Hikaru Sato

Extreme volatility in the market seems to be overdone, but none of these problems has been resolved.

Hikaru Sato

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Categorized in : Company News

The market seems to be taking the same recovery path as last year, when the market hit a low last summer after China devalued the yuan and recovered in the fall, continuous recovery may depend on central bank policies but some investors are showing optimism.

Investor sentiment overall is sour now. The Japanese market this week is going to depend on external factors and overseas economic data again.

We expect a few more days of unstable markets. by Hikaru Sato

We expect a few more days of unstable markets.

There probably won't be a catalyst from the Japanese market to counter external worries like oil price falls and the U.S. market's slide, so we may expect more volatility for today and tomorrow.

Unless the (Chinese) government comes up with a measure to support its economy in the long term, investors will likely stay concerned, investors are likely to turn to Japanese equities and sell if that happens.

The ECB's decision will likely set the direction for the Japanese market tomorrow and beyond, but it's also true that the market is seen overbought recently.

Investors will likely turn risk-on if the ECB announces stimulus, so it should be positive for the Japanese market.

Global market worries triggered selling while the market was prone to profit-taking from last week's gains.

Global investors are taking a wait-and-see stance before the (ECB) event, as depending on the outcome the euro could move sharply.

A relatively quiet market reflects investors' cautious stances on the ECB meeting and other meetings, until then, investors are taking their cues from U.S. earnings and Japanese companies' earnings.

This is depressing because we are talking about a period before worries about a China-led slowdown in the global economy hit, for this quarter and beyond, China's cooling demand could hit our economy so it's not looking good.

For now, the majority of investors seem to think that the imminent U.S. rate hike is unlikely, but because U.S. yields are rising, there still are some bets that the Fed would raise rates so we shouldn't be overly optimistic.

It's the second biggest peak of the quarterly earnings season. Investors want to see the outcomes before they take positions.

Beijing tends to announce measures to counter a market fall on the weekend, so that's something the market is careful about, too.

Since the market had been rising, such bad news can take a toll, but the impact from Apple's weak forecast should not drag on.

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