ANALYST: Japan Just Had Its ‘Lehman-Like’ Moment
Matthew Boesler
BusinessInsider.com
May 23, 2013
One of the hottest trades in the world this year has been Japan.
Short the yen, buy Japanese stocks. It’s practically become conventional wisdom.
In fact, Japanese equities were basically the hottest major asset class in the entire world before today’s bloodbath, posting 20.9% cumulative gains over the past three months alone.
Last night, though, sparked by the first notable sell-off in three weeks in American stock markets – and really driven home by new data overnight that revealed the Chinese manufacturing sector has unexpectedly dipped into contraction – the Nikkei 225 plummeted 7.3%, marking its biggest single-day drop since the earthquake that ravaged Japan two years ago.
That takes the Nikkei back to levels not seen since May 9 (it’s been moving quickly on the way up).
At least one analyst finds the drop-off in Japan reminiscent of the Lehman Brothers collapse in 2008 that unleashed turmoil on markets.
“Lehman-like in Japan,” writes Société Générale foreign exchange strategist Sebastien Galy in an email this morning.
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