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The Abenomics Rally and Aftermath … So Far

  • Written by Syndicated Publisher No Comments Comments
    June 14, 2013

    Now that Abenomics has its own entry in Wikipedia (the economic policies of Japanese Prime Minister Shinzo Abe), let’s take a quick look at the Nikkei 225 since its November 2011 low, just before Abe’s campaign promises began to lift the market.

    Based on closes, the Nikkei rose 80.1% from November 12, 2012 to its May 22 high. It has now fallen 20.4% as of June 13th, 16 market days later.

    Based on intraday highs and lows, the index peaked on May 23rd and fell into bear market territory 11 sessions later, down 21.3% on Friday of last week.

     

     

     

    Not surprisingly, a chart of the Yen has the reverse shape.

     

     

    The rally in equities was overdone, to be sure, assisted by the fall of the Yen. Japan is more or less betting the bank, but there will be more innings in this game.

    Images: Flickr (licence attribution)

    About The Author

    My original dshort.com website was launched in February 2005 using a domain name based on my real name, Doug Short. I’m a formerly retired first wave boomer with a Ph.D. in English from Duke. Now my website has been acquired byAdvisor Perspectives, where I have been appointed the Vice President of Research.

    My first career was a faculty position at North Carolina State University, where I achieved the rank of Full Professor in 1983. During the early ’80s I got hooked on academic uses of microcomputers for research and instruction. In 1983, I co-directed the Sixth International Conference on Computers and the Humanities. An IBM executive who attended the conference made me a job offer I couldn’t refuse.

    Thus began my new career as a Higher Education Consultant for IBM — an ambassador for Information Technology to major universities around the country. After 12 years with Big Blue, I grew tired of the constant travel and left for a series of IT management positions in the Research Triangle area of North Carolina. I concluded my IT career managing the group responsible for email and research databases at GlaxoSmithKline until my retirement in 2006.

    Contrary to what many visitors assume based on my last name, I’m not a bearish short seller. It’s true that some of my content has been a bit pessimistic in recent years. But I believe this is a result of economic realities and not a personal bias. For the record, my efforts to educate others about bear markets date from November 2007, as this Motley Fool article attests.

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