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Japan is under Threat of Stock Market Closing


Japan is under Threat of Stock Market Closing

On the occasion of following Emperor Akihito abdication, Japanese markets will be closed. It is predicted to happen from April 27 to May 6.  Additionally, it occurs the weekends of annual Golden Week – the holiday period in Japan, which include a celebration of Emperor Seva`s Birthday, The Day of Constitution and Children`s Day. These 10-day weekends on the Japanese market will be the longest since the end of World War II.

The Akihito Era

Emperor of Japan Akihito will abdicate the throne in favor of his son, the crown prince Naruhito on April 30, 2019. It is expected that Narukhito will replace his father on May 1, 2019. The abdication of the Japanese Emperor will happen for the first time over the last 200 years: previously it happened in 1817.

Last August, Akihito expressed a desire to abdicate the throne in his address the nation because of the old age. Previously, the law required the Emperor to perform his ceremonial duties until the end of his life. Finally, the Japanese government approved a bill allowing the Emperor to abdicate the throne.

Japan’s Stock Markets

The largest market in Japan is the Tokyo Stock Exchange, which accounts for about 95% of the stock turnover. The Osaka Stock Exchange is also a major one. The number of firms participating in the Tokyo Stock Exchange exceeds one hundred. Some of these firms are large international securities companies and investment banks, such as Morgan Stanley, Solomon Brothers, and Jardine Fleming.

Options, futures contracts and bonds are traded on TSE. The Nikkei 225 index, the most important stock index for Japan, is an indicator of the Tokyo Stock Exchange. It is calculated as the arithmetic average of the stock prices of 225 companies whose securities on the stock exchange are bought and sold more often. As a result, such shares have a higher capitalization.

Taking Measures

Broker companies began to take measures aimed at reducing the investors` fears in foreign stocks. “Daiwa Securities Group Inc. plans to allow customers to trade in European markets on April 30 and May 2”, says company`s spokeswoman,Yuji Kamioka. SMBC Nikko Securities Inc plans to open a call center for customers` transactions who intend to sell stocks in US markets. Investors are concerned that due to weekends they will not be able to exit positions for more than a week.

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