Japan

17/12/2008

Markets around the world continued to slide, although the pace of declines slowed from October. After another month of high volatility, the Japanese market delivered a negative return in November. An initial rally was driven by an election bounce in the US market and a temporary depreciation in the yen. However, economic concerns soon resurfaced and the currency strengthened again, adding to exporters’ woes. Concerns over company earnings intensified when Toyota Motor slashed its full-year forecast. Downgrades have been seen across all sectors with the exception of utilities, which benefit from commodity price falls lowering their input costs. Exports and industrial production both fell heavily in October by more than expected and the Economic and Social Research Institute (ESRI) consumer sentiment index also hit a new low. However, the market ended the month on an uptrend after a rescue package was agreed for Citigroup and a number of countries announced further stimulus measures, somewhat easing recession fears.