Tag Archives: Nikkei

Japan, in the middle of nowhere

Japan is the third largest world economy. It is one of the largest foreign investor and saver (over the GDP), its trading balance has a huge positive result and their GDP per capita is amongst the richest countries. However, it seems that no policy can bring the country out from the stagnation. The GDP growth is weak since the 90s, when the financial bubble exploded in the Empire of the Rising Sun.

This is the real economy, but what about the finances? The figures are not very nice. The T-Advisor trend evolution chart for Japan shows that the line is very  bearish the whole year 2016. In our trend index, Japan is the second-to-last country.

T-Advisor global trend evolution chart in T-Advisor

The Nikkei 225, the Japanese benchmark, has also a negative YTD performance, with an erratic trend.

Nikkei chart in T-Advisor

Compared with other neighbours in Asia, Japan is one of the weakest markets only over Shanghai.

T-Advisor comparison tool between Japan and other Asian markets

But what can we expect from the future in Japan? Our bootstrapping analysis provides a result in which we can perceive a great probability of high volatility. The range between the best and worst result is very wide and the expected performance is low, around a 26% in 10 years.

Nikkei bootstrapping analysis with T-Advisor

The cumulative returns distribution points out that there are a 50% of probabilities that the Nikkei obtains negative results in the next five years.

Nikkei cumulative distribution returns with T-Advisor

To sum up, T-Advisor data shows that the market evolution in Japan has been very bearish this year. Only a 30% of the Nikkei stocks are performing positively. The future seems to be also not stimulating, as the probabilistic bootstrapping analysis detects higher chances of negative returns for the next five years.