This sounds like good news, but it isn't. This is because the rise was driven by rather dubious "rumours" of peace in the war between America and Iran. In short, the rise in stock prices simply reveals how dependent Japan is on the Straits of Hormuz being opened.
Japan is now clearly dependent on this geopolitical chokepoint, which is controlled by one of China's main allies.
If the Tokyo stock market had shown a bit more stability during the Iran War crisis, there would be some grounds for believing that Japan was not totally dependent on the Straits being open, and this would reduce the appearance of obvious leverage.
But, instead, during the crisis, the Nikkei has wildly fluctuated by 25% from a low of around ¥50,557 to today's brittle high of ¥63,228. The Dow's fluctuation was around 8% and the FTSE 5%.
But, instead, during the crisis, the Nikkei has wildly fluctuated by 25% from a low of around ¥50,557 to today's brittle high of ¥63,228. The Dow's fluctuation was around 8% and the FTSE 5%.
"Lower oil prices are significant for companies, as even a modest easing of inflation can provide meaningful relief," said Takashi Ito, senior strategist at Nomura Securities.
"We're targeting all angles" when it comes to intervention, Atsushi Mimura, vice finance minister for international affairs, told reporters when asked whether recent yen moves were driven by crude oil futures. He added that authorities are monitoring markets with a sense of urgency amid continuing speculative moves.
The lesson here is that if the Gulf sneezes Japan is rushed to the emergency ward, and if the Gulf stops sneezing for a while, then it suddenly jumps out of bed and starts running around like a lunatic! Not really a stable economy.
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