Investors dive into Japan stocks

Japanese investors are climbing into their stock market as the Nikkei continues to rise after hitting a five-year high and the yen plunges to fresh lows versus the US dollar.

Tuesday, April 09, 2013

Japanese investors are climbing into their stock market as the Nikkei continues to rise after hitting a five-year high and the yen plunges to fresh lows versus the US dollar.

The local press describes the Tokyo stock market as a place where "even idiots can earn money" as hundreds of thousands reactivate their trading accounts following a more-than- two-decade hiatus.

Investment seminars have also become wildly popular, with each session drawing hundreds of participants.

What is happening now in Japan is little different from the "Mrs Watanabe" phenomena of 2006-7.

Mrs Watanabe stands for the quintessential Japanese housewife who controls the family purse strings. During 2006-7, thousands of them took out loans in yen and bought assets priced in higher-yielding currencies.

Now the focus is on Japanese stocks.

"The current market brings me back to the 1970s when I earned a lot to start my restaurant business via an equity boom," 70-year-old retiree Kobayishi was quoted saying in a report.

He bought shares of blue-chip electronic goods maker Hitachi at the start of this month. Already, they have soared 12 percent.

Celia Tsai, a private client manager at Saxo Capital Markets, has yet to see Hong Kong investors rushing into Japanese equities.

And independent analyst Andrew Wong Wai-hong warns of the currency risk. "The shares may not jump as fast as you expected while the yen could weaken further," he said. GRACE CAO