I told you awhile back how the Japanese stock market was rising after a decade-long slump. This trend continues, especially as Americans are rushing to buy the latest in Japanese technology for the holidays.
“Exporters are gaining as a strong start to holiday sales eased concerns over any sudden slowdown in the U.S. economy, which has been a worry,” Takashi Kamiya, chief strategist at T&D Asset Management in Tokyo, said.
There are a number of Japanese companies that bank on sales overseas, such as Toyota and Sony. Both of these companies have seen an increase in sales and a boost in stock prices.
The Nikkei continues to rise steadily, reaching a new high at 14986.94 since December 2000. Increases have also been spurred thanks to overseas investors who are boosting their holdings.
It is expected that large companies will raise capital investments by over 15% this year, which is more than the earlier prediction in May of this year.
Retail sales on Black Friday in the United States skyrocketed this year, with a 22% jump that weekend, as compared to the same Thanksgiving weekend last year.
“A good start to the year-end holiday sales season has wiped out concerns about sluggish consumer spending in the U.S.,” Norihiro Fujito, senior strategist at Mitsubishi UFJ Securities Co in Tokyo, said.
However, while sales overseas might be spurring increases in the Nikkei, back home, Japanese consumers are, in fact, curbing their spending.
While there had been a boom in spending recently, sales have started to drop, raising concern that the economy is slowing down yet again. However, as salaries increase and winter bonuses are handed out, the economy might see a jump again.
“The decline reflects slower sales of cars and the warmer weather,” Azusa Kato, economist at BNP Paribas Securities Japan Ltd., said. “The overall environment for consumer spending is healthy, with wages rising, employment continuing to improve and bonuses expected to rise.”
Bonuses are expected to rise by 5.35% this winter, which should lead to an increase in spending.
All this continues to bode well for Japan’s economy in 2006, as hopes are a true recovery will be seen.