Japanese Stocks will Need a Boost from the Economy to Break Through
The Japanese market represents the world’s third biggest economy. It’s also the biggest country weighting in the EAFE iShares (19%). So it’s direction has a lot of influence on EAFE direction. Although Japan has been one of the world’s worst performers over the last two decades, it was the world’s strongest market during 2013. The benchmark equity index surged during the prior year but has had trouble moving forward in 2014.
The weekly bars of the WisdomTree Japan Hedged Equity ETF (NYSEARCA:DXJ). Which removes the influence of the yen on the stock market started rising near the end of 2012, and surged throughout the first half 2013 following a large quantitative easing program installed by the new government. Since May 2013, the DXJ has been trending sideways in an apparent symmetrical triangle. It has also remained above support along its 2010 highs. Japan has been a drag on the EFA during that period.
A resumption of Japan’s uptrend would give a big boost to developed markets. The monthly bars show the 2013 rally in the Nikkei Index stalling at a resistance line along its 1996, 2000, and 2007 highs. Add Japan to the list of foreign stocks that are testing major overhead resistance.
Unfortunately, Japanese stocks will need a boost from the economy, which it has not receive in 2014. Thursday retail sales did little to help. Retail sales fell 13.7% on the month, after having increased 6.4% in March. The year over year rate fell to -4.4% from 11.0%. Japan’s GDP expanded by 5.9% at an annualized rate in Q1 and is expected to contract by 3.0-3.5% this quarter.
- Mellanox Provides Leading Application Performance with FDR InfiniBand for HPC-Purpose Built Dell PowerEdge C4130 1 view
- Harris Warsaw Joins Pitney Bowes as Senior Vice President of Sales, Global SMB Solutions 1 view
- US Housing Data Steps into the Spotlight 1 view
- Steady Reading On French Inflation 1 view
- AUD/USD climbs ahead of the Reserve Bank of Australia 1 view
- Sam’s Club to Offer LifeLock(R) Identity Theft Protection 1 view
- FOREX Watch: US dollar breaks sticking point 1 view
- Turkcell Introduces the Future of TV with Its Expanded Turkcell TV+ 1 view
- Visa Falls Despite Revenue Gains 1 view
- Dex Media and Yext Sign Agreement to Expand Small Business Internet Marketing Offerings 1 view
|Forex Broker Spreads »|
|Most Popular Articles »|
- Christopher Brody to Step down From Intuit Board of Directors; Richard Dalzell Nominated 1 view
- US Industrial Production Growth Stalls 1 view
- LNB Bancorp, Inc. Shareholders Vote to Approve Merger with Northwest Bancshares Inc. 1 view
- Sterling Slides as Minutes Reveal Hawkish Central Bank that is Not Yet Ready to Act 1 view
- US Dollar Steadies at 6-Year Highs 1 view
- Philips Selects Revolutionary Voice Recognition Software from VoiceItt as Winner of Annual Innovation Fellows Competition 1 view
- US Pension Fund Fitness Tracker: No Reversal in Q4, Funding Ratios Decline for Fourth Consecutive Quarter 1 view
- Exactech Launches Octane(R) Elevate Peek Spacer System For Lumbar Interbody Fusion Procedures 1 view
- Euro Declines on Weak PMI Ahead of Jobs Report, RSI is Oversold 1 view
- JPY weaker on BoP, SEK inflation in focus 1 view