Salient to Investors:

Takahiro Nakano at Mizuho Trust & Banking said Japanese stocks are falling amid risk aversion rather than going up on a weaker yen, and equities will have to rely on the drop in the yen after expectations about Japan’s growth strategy receded.

Yutaka Miura at Mizuho Securities said low volume amplifies price swings so it is just short-covering and we won’t see big buying until the market stabilizes – it has been so volatile that investors cannot place orders easily.

Scaling back US stimulus will have mixed outcomes for Japanese equities – it would cause the dollar to strengthen against the yen, increasing exporters’ earnings outlook, but at the same time damp demand for risk assets globally.

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