Article Abstract:
The Tokyo and Osaka stock exchanges doubled the commission rates on futures trading in Mar 1992 to divert trading to the depressed cash market. This is one of a string of measures instituted to curb the volume of futures markets, which was intended as a hedge for institutional investors but has become an instrument of speculation and was partially a cause of the stockmarket crash. Favoring home-grown equity markets against foreign-invented futures trading could be another motive. Critics fear that the measures will divert investments to nearby countries such as Singapore.
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Article Abstract:
The Nikkei-225 stock average slid below 16,000 points on Jun 22, 1992 and proved a lot of Japanese and foreign brokers wrong. As a result, a significant number of their clients lost heavily. The Tokyo market is expected to remain bearish for quite some time. The market yield on Tokyo equities must first rise to competitive levels before stock prices can ever revive. The Bank of Japan should also lower interest rates to increase the liquidity of the economy.
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Article Abstract:
Interest rate cuts have forced the yields on the benchmark 10-year Japanese government bonds to drop to 5.4%. Japan's official discount rate fell to 4.5% in Mar 1992, a 1.5% cut from the previous year. Yields are expected to drop below 5% since the Bank of Japan plans further cuts in the ODR within the year. However, three-to-five year bonds are the preferred investments since interest rates are predicted to rise in 1993.
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