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An article by Dave Kansas in a famous online publication discussing five points which explains why investors stop worrying about Japan. Uncertainties are still there and there are not much improvement after the worst earthquake/tsunami and nuclear disaster. News flashed around the world rumoring Japan would be the next Chernobyl but nothing happened. During this situation, why investors are still not worrying about Japan?
Global investors, especially in the U.S., have moved from fretting about Japan to deciding that there’s really not too much to worry about. While the Nikkei 225 slid 1.7% last night, the U.S. market is looking more resilient. The Dow Jones Industrial Average has managed to regain the level reached ahead of the Japanese disaster. Similar rebounds have occurred in Europe and elsewhere in Asia.
Japan’s market continues to grapple with all the challenges – the Nikkei 225 is still well off its pre-quake level. But investors outside Japan see opportunity. Global investors (again, mostly American) poured $2.3 billion into Japanese ETFs in March, with most of that coming after the earthquake.There are top 5 reason why an investor or investors need not worry much on Japan. 1) It’s a temporary disruption, 2) The yen has weakened, 3) The U.S. recovery trumps Japan’s problems, 4) In Asia, the focus is really on China, Oil, 5) European Central Bank and Fed are bigger threats.
Dave Kansad done a great job by describing each of the above point in a well clear manner with his article. You can read the full article readily here.