Traders are showing confidence on Wednesday, despite Japan's natural and nuclear disasters, as if to say, "Japan, you can do it!" Nonetheless, most news is still concentrating on nuclear concerns and disaster relief.
Traders are surprised by the Nikkei's positive turn out
Tokyo’s stock market has performed well on Wednesday (16 March), with values rising right after the markets opened. The news comes as a relief for the disaster-stricken country and demonstrates that panic and empty supply shelves caused by the disaster no longer have a tight grip on market confidence. The positive trend continued right through to closing, putting Tokyo’s Nikkei-Index at 5.7 in the plus and far over the 9000 point mark. After the turmoil of the past couple of days, this is a welcome sign of hope.
One day not enough
But the positive signs in the stock market might not be quite enough, as Nathan Layne, an expert at Thomson Reuters, points out. "A huge part of the north-east coast of Japan has been devastated by this, the early estimates from analysts and economists is 180 billion USD in damages. Of course the crisis is escalating if you throw in the radiation scare and people from overseas are going to stop coming to Japan, the hit on tourism, the obviously the number (of damage costs) could go up from here."
Tokyo stocks continued a downward spiral after the disaster last Friday, but took a turn for the better on Wednesday
In Australia volunteers were standing outside Sydney’s stock exchange collecting donations for Japan’s disaster victims. Values also rose on the ASX, but most, like analyst Krishna Kumar, doubt that the trend will continue in a positive direction. "This is not a time to be looking to buy stocks because the risk aversion is still on the table and nobody knows about the situation in Japan."
Central bank to the rescue
With clean-up efforts slowly making progress and fears of a nuclear disaster on the rise, the central bank of Japan took steps to ensure the stability of the market at least by pumping in around 30 million euros on Wednesday.
Author: Jörg Jelinnek (sb)
Editor: Grahame Lucas