Bank of Japan Drops Ball, Gvt. Pension Fund Stops Buying Stocks, Nikkei Plunges, J-REITs Eviscerated

[marmar]

Bank of Japan Drops Ball, Government Pension Fund Stops Buying Stocks, Nikkei Plunges, J-REITs Eviscerated
by Wolf Richter • September 1, 2015


On Tuesday, Japanese stocks took the worst drubbing of the major Asian stock markets. The Nikkei plunged 725 points or 3.84% to 18,165. On August 10, it had set a multi-year high of 20,808. At the time, Japanese stocks gleamed; they’d elegantly skirted the China swoon. But over the past three weeks, the Nikkei has dropped 12.7%.

Japan has some, let’s say, issues. Private consumption dropped 0.8% in the last quarter, and GDP dropped 0.4%. The economy shrank in six of the past 12 quarters. That’s how well Abenomics has worked out for the economy.

But during that time, stocks have more than doubled! That’s where the real impact of Abenomics has been.

To his credit, Shinzo Abe decided to achieve a national consensus on how to deal with Japan’s mountain of government debt and mega-deficits that add to it every year. He ran on that platform in 2012: Japan would print itself out of its fiscal troubles. And the price would be paid over time by the Japanese people.

The Bank of Japan had been engaging in QE before the term had even been invented, buying Japanese Government Bonds (JGBs) and equity ETFs as part of its policy. But under Abenomics, its purchases skyrocketed, purposefully strangling the JGB market, thus taking complete control over it. ...................(more)

http://wolfstreet.com/2015/09/01/bank-of-japan-drops-ball-government-pension-fund-stops-buying-stocks-nikkei-plunges-j-reits-eviscerated/

[elleng]

1. Oh FFS!

'Good' it wasn't China!

[leveymg]

2. Just as the Nikkei bubble bust so did Wall St. That was the last time

This time again only far worse.