On the morning of August 13th, the Nikkei 225 index rose more than 2.7% and reached 36000 points, returning to the level before last Monday's sharp decline. As of 10:17 Beijing time, the Nikkei 225 index rose 2.23% to 35807.50 points.
Former Governor of the Bank of Japan, Makoto Sakurai:
There will be no further interest rate hikes this year
In the morning, the US dollar showed significant fluctuations against the Japanese yen. As of 10:17 Beijing time, the US dollar was trading at 147.2895 against the Japanese yen, an increase of 0.06%.
On August 12th, former director of the Bank of Japan, Makoto Sakurai, stated that considering the market turbulence caused by the recent interest rate hike by the central bank (known as "Black Monday") and the low possibility of rapid economic recovery in Japan, the Bank of Japan will not be able to raise policy rates again this year.
He said in the latest interview, "At least for the rest of this year, they won't raise interest rates again. It's hard to say whether they can raise interest rates before March next year
At the end of July, the Bank of Japan just announced a 15 basis point interest rate hike, which is also the first time the Bank of Japan has raised interest rates since withdrawing from negative interest rate policy in March this year. After the unexpected interest rate hike, the Japanese yen appreciated significantly and the Japanese stock market continued to plummet. Affected by this, the stock markets of many countries fell sharply, and the stock markets of South Korea and Türkiye triggered the circuit breaker.
The potential for further decline in Japanese stocks may be relatively limited
Zheshang Securities stated that as the expectation of Japan's interest rate hike slows down, Nikkei is also experiencing a trading rebound. It can be seen that the expectation of a Japanese yen interest rate hike on July 11th has caused a downward impact on multiple global stock markets, with the US and Japanese stocks suffering particularly severe damage. In the future, Japanese stocks may be relatively easier to repair compared to US stocks. The pricing anchor of US stocks is subject to the performance of economic and technology stocks, while Japanese stocks tend to be more value oriented, resulting in less resistance to repair.
Guolian Securities stated that the recent appreciation of the Japanese yen far exceeds the range that interest rate parity may explain. It is worth noting that the rise of the Japanese yen and forced liquidation in the foreign exchange market, as well as the decline and forced liquidation in the Japanese stock market, may also form a self reinforcing positive cycle.
Previously, the Japanese stock market experienced a sharp adjustment or was driven by the decline in US technology stocks, international investors reducing their holdings in Japanese stocks, concerns about US recession and the appreciation of the yen, which led to a loss of profit expectations for Japanese companies, as well as the impact of the Bank of Japan's interest rate hike. Haitong Securities believes that with the pressure of the US recession not yet apparent, the pressure of interest rate trading closing has eased, the Bank of Japan's dovish statement, and offshore US dollar liquidity has not significantly deteriorated, the downside space for the Japanese stock market may be relatively limited, and it may enter a volatile range in the future.