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Japan’s Nikkei 225 Has Fallen 16% since January 1

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Jan. 22 2016, Updated 8:20 a.m. ET

Nikkei is falling continuously

Since the start of 2016, all the major global indexes have seen a huge fall as investors became more concerned about global growth. China’s economic slowdown and crude oil’s new lows strengthened the selloff pressure.

Japan’s (EWJ) (DXJ) Nikkei 225 fell almost 16% from January 4–20, 2016. The Nikkei fell to the 16,000 level from its previous 19,000 level. The iShares MSCI Japan ETF (EWJ) has fallen 10% in the same timeframe.

[marketrealist-chart id=986964]

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What do Japanese economic indicators suggest?

Japan’s final industrial production fell 0.9% in November 2015 compared to its 1.4% rise in October 2015, according to Japan’s Ministry of Economy, Trade, and Industry. On a year-over-year basis, Japan’s industrial production rose 1.7% in November.

The Japanese final shipment index fell 2.4% in November due to the fall in petroleum, chemicals, and the steel industry. Falling industrial production showing less domestic and international demand. Japanese manufacturers expect production growth in December 2015 and January 2016.

Major auto manufacturing stocks Toyota Motor (TM), Honda Motor (HMC), and Nissan Motor (NSANY) fell 9%, 12%, and 13%, respectively, from January 4–20, 2016.

As the economic indicators are not showing impressive figures, investors expecting more stimulus from the central banks to boost economic growth. The People’s Bank of China has recently taken some steps to stabilize the equity market by reducing its lending rates.

In the next part of this series, we will analyze the stance of the Bank of Japan according to the current scenario.

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