Japanese Stock Market 2007 A Review

The Japanese Stock Market has been and always will be in the news. It represents an economy which is resurgent and mature. Here we take a short look into the Japanese Stock Market 2007.

Inexplicably, developments in the western hemisphere still take a toll on the Japanese Share Market. This is in spite of the fact that Japan is growing with an increasing emphasis on Domestic consumption and not just exports. In spite of that a ripple effect between western and far east economies still exist.

In the beginning of the year in February, the New York Stock Exchange (NYSE) signed a letter of intent with the Tokyo Stock Exchange (TSE). The letter was to form a strategic alliance which would help both partners in terms of technology, share listing and mutual investment.

This alliance was formed partly to regain investor confidence after a series of computer system related glitches resulted in trade being suspended and huge monetary losses.

Towards the end of February, TSE entered into an agreement with the London Stock Exchange to bring about a 24 hour working environment between the two exchanges. This would result in a situation where trading could be carried on between the stock exchanges of London and Tokyo in spits of the time zone differences.

During the first quarter of 2007 the TSE basically tried to undo the damage caused by computer glitches during the last quarter of the previous year. These glitches had resulted in huge losses for some brokers.

Trading has been good during this year. On the 28th day in January the Nikkei 225 based on a bull run peaked at 17,490 points. The Topix index closed at around 1600 points. The two indices represent the highest level of growth in the past six years. The bull run is likely to continue as Japanese Companies are gearing up to face the Chinese Dragon.

Nintendo's performance was particularly promising as the company fought Microsoft to capture the number one slot in the console gaming market. The share price peaked at 64,800 yen. With a market capitalization of 79 billion USD, just below that of Toyota Motors, analysts say that it is a company to invest in now.

Based on news report about plans for an Ultra Compact Fuel Efficient Car, Toyota Motors gained strength. The company's return on equity in 2007 has been 15.6 % compared to 15.2 % during the last year. The profit margin rose from 6.5% during 2006 to 6.9 % during the current year.

It is a wait and watch situation. Trading and growth in the Japanese Share Market 2007 is expected to be mature and stable. It is the right time for investors to consider investing their funds in Japanese Shares.