1 Japan Market Memo Strong corporate earnings to support the equity price (No.006)

Sumitomo Mitsui Asset Management
Japan Market Memo
For information only
(No.006)
Today’s
Topic
16 October, 2014
Outlook of Japanese Equity Market after a Correction
Strong corporate earnings to support the equity price
Point
1
19,000
Approx. 10% decline from
the peak in September
16,000
950
13,000
700
10,000
450
■Nikkei 225 index of October 16 closed at JPY 14,738.38,
sharply declined by JPY 335.14 from the previous day
(-2.22%). It fell over 1000 yen in seven working days and
fell below 15,000 level this Tuesday since August 2014.
■From this year’s peak of JPY 16,374.14 marked on
September 25, the index fell more than JPY 1,600
(approx. -10%).
■In currency market, JPY re-appreciated against US$ back
to around 106 yen from above 110 yen level marked in
the beginning of October.
Point
2
Increasing concern on
slowdown of global economy
Worries on slow Japanese economic
recovery and JPY appreciation
■On October 7, IMF unveiled a downward revision of
the global economic growth outlook. It was followed by
the announcement of US FOMC meeting minute (for
September 16 & 17) on the 8th which pointed out
the global economic slowdown led by Europe is a risk
factor to the US economy. On October 9, a major
German economics research institute published their
forecast that the German economy was on a verge of
economic recession.
■Following these, the Japanese equity market plunged
under the situation that US and European investors took
a “risk averse” attitude in the global equity market with
increasing concern over the deterioration of global
economy and re-appreciation of Japanese yen.
Future
Outlook
Nikkei 225 index & Corporate earnings forecast
Nikkei fell over 1000 yen
in seven working days
(JPY)
(JPY)
Nikkei 225 index Left
Corporate Earnings Forecast Right
7,000
1,200
200
07/1 08/1 09/1 10/1 11/1 12/1 13/1 14/1
(Year/Month)
（Note）
Data is from Jan.2007 to Oct. 2014 (Monthly). Nikkei 225 index
till 16 October, 2014 , Corporate earnings forecast (per share, next FY)
till 15 October, 2014.
（Source） SMAM, based on Bloomberg L.P. data.
18,000
(JPY)
Nikkei 225 index & US$/JPY
(US$/JPY)
Nikkei 225 index Left
US$/JPY Right
17,000
110
108
16,000
106
15,000
104
14,000
102
13,000
100
14/1
14/3
14/5
14/7
14/9
(Year/Month)
（Note） Data is from 6 January, 2014 to 16 October, 2014 (Closing price).
（Source） SMAM, based on Bloomberg L.P. data.
Nevertheless, the Japanese equity market would be supported by
the firm business sentiment and solid corporate earnings going forward
■In the BOJ’s Tankan survey released on October 1, those in Japan are expected to keep a firm tone in
the business conditions of large corporations
the coming future.
(manufacturing
sector)
showed
a
moderate ■According to the Tankan, the Japanese corporations’
improvement. The future forecast was almost positive,
average forex rate of US$/JPY used for their assumptions
too. The US ISM index indicated that business sentiment
of earnings forecast is JPY 100.73, which is higher than
of the US enterprises were kept strong.
the current level of around 106 yen. If the current forex
■当資料は、情報提供を目的として、三井住友アセットマネジメントが作成したものです。特定の投資信託、生命保険、株式、債券等の売買を推奨･勧誘す
■The
global economy is expected to gradually accelerate
rate is maintained, corporate earnings of Japanese
るものではありません。■当資料に基づいて取られた投資行動の結果については、当社は責任を負いません。■当資料の内容は作成基準日現在のもので
its speed of growth into next year although economic
corporations will be revised upward. We have a view
あり、将来予告なく変更されることがあります。■当資料に市場環境等についてのデータ・分析等が含まれる場合、それらは過去の実績及び将来の予想で
growth
rate
of
Japan,
Europe
and
emerging
countries
that the Japanese equity market will rise in line with
あり、今後の市場環境等を保証するものではありません。■当資料は当社が信頼性が高いと判断した情報等に基づき作成しておりますが、その正確性・完
全性を保証するものではありません。■当資料にインデックス･統計資料等が記載される場合、それらの知的所有権その他の一切の権利は、その発行者お
were revised downward. Based on these outlook,
the earnings improvement as uncertainties over
よび許諾者に帰属します。■当資料に掲載されている写真がある場合、写真はイメージであり、本文とは関係ない場合があります。
corporate earnings of world key companies including
the global economy fade away.
Sumitomo Mitsui Asset Management
Japan Market Memo
(No.004)
For information only
25 September, 2014
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■当資料は、情報提供を目的として、三井住友アセットマネジメントが作成したものです。特定の投資信託、生命保険、株式、債券等の売買を推奨･勧誘す
るものではありません。■当資料に基づいて取られた投資行動の結果については、当社は責任を負いません。■当資料の内容は作成基準日現在のもので
あり、将来予告なく変更されることがあります。■当資料に市場環境等についてのデータ・分析等が含まれる場合、それらは過去の実績及び将来の予想で
あり、今後の市場環境等を保証するものではありません。■当資料は当社が信頼性が高いと判断した情報等に基づき作成しておりますが、その正確性・完
全性を保証するものではありません。■当資料にインデックス･統計資料等が記載される場合、それらの知的所有権その他の一切の権利は、その発行者お
よび許諾者に帰属します。■当資料に掲載されている写真がある場合、写真はイメージであり、本文とは関係ない場合があります。