In another volatile afternoon session, the Nikkei fell 1.4 percent on today after Prime Minister Shinzo Abe fired his third "Abenomics" arrow, promising special economic zones, among other moves, to boost growth. Nikkei Drops 1.5% on Abe Remarks in Volatile Trade
Abe's reform measures come at a time of heightened uncertainty about the impact of monetary stimulus on risk assets. The Nikkei has jumped over 30 percent in the past six months but has lost 13 percent in a torrid bout of profit taking over the past two weeks as investors worry that the pace of gains may be too rapid.
When you have a look at the nikkei below, it has been dropping for a few weeks, and looks to be in serious trouble.
|Nikkei Drops 1.4% on Abe Remarks in Volatile Trade|
The Prime Minister's "third arrow" of his "three arrows" strategy follows previous monetary and fiscal stimulus and focuses on long-term structural changes such as boosting power related investment and increasing capital spending in utilities.
The nikkei now faces a few weeks or uncertainty but looking at the chart above we have broken a longer term trend line and if the 13000 level is broken there could be much more downside action.
Time will tell.
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