Ok, well it’s official, the Nikkei has now had its longest run of gains in history.
Following Shinzo Abe’s sweeping election victory on Sunday, Japanese shares advanced and the yen slipped as the market can now safely assume a continuation of ultra accommodative monetary policy.
The Nikkei surged more than 1%, marking its 15th straight day of gains, besting a record that was set more than five decades ago:
As Bloomberg notes, the “previous record run was a 14-day advance from Dec. 21, 1960, to Jan. 11, 1961.”
For its part, the Topix was up for an 11th straight day – that’s the best streak since a 12-day run in November 2016.
Recall what we said last week:
One thing worth noting: given that foreigners were net sellers for 9 consecutive weeks going into October, and given that, as Bloomberg also notes, retail investors sold a net 1.7 trillion yen in equities over the five-week stretch ended Oct. 13, there’s a certain extent to which this has been propped up by Kuroda.
As of yesterday, the BoJ owns a cartoonish 16 trillion yen worth of stocks. So I guess there’s an argument to be made that if retail investors get interested again, lured as they’re prone to, by headlines about record winning streaks, and if foreign money continues to come in, there’s no stopping the rally. Further, the Nikkei has actually lagged the MSCI Asia Pacific ex-Japan.
Well, Nomura’s Toshio Morita thinks that bolded bit about retail investors is likely to play out.
“Japanese investors have been reluctant to buy the nation’s stocks because of a ‘fear of heights,’ and there’s room for shares to rise further once locals come on board,” he said, in an emailed statement to Bloomberg, adding that “today is a historic day.”