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Nikkei Plunges 420 Points, Topix Tumbles 3%, Most Since March

Tyler Durden's picture




 

Define irony. Literally hours after financial entertainment outlet CNBC wrote an article in which it said that "As fourth quarter kicks off, there's one market in Asia that has investors excited: Japan" the Nikkei crashed.

First, some more humor from CNBC, which quotes JPM who apparently does not realize that crushing your currency to generate nominal gains is a zero sum game, and instead of pitching Japan as the next big thing, he should be focusing on the "upside" in Venezuela or Argentina:

The world's third largest economy may be struggling to shake off the drag from the sales tax hike that took effect in April, but a weakening yen, improving corporate profits and attractive valuations will likely power gains in equities in the coming months, say strategists.

 

"We are going to get a combination of value meeting growth – the Japanese market is cheap – so there's value, and on top of that we are going to get earnings growth," said Jesper Koll, head of Japanese equity research at JP Morgan Securities Japan. "

 

Koll's optimism was shared by several other strategists.

 

"We're overweight Japan. Abenomics is making progress, albeit slowly, the yen continues to weaken, which is good for stocks, and pension fund reform is a huge potential catalyst," said Simon Grose-Hodge, head of investment advisory, South Asia at LGT Bank.

So yes, entertainment that is free and funny: a great combination.

In the meantime, someone in Japan finally read Zero Hedge articles from early 2013 which were warning about precisely the kind of hyperstagflation that Japan is currently experiencing. That someone happens to be the former finance minister Hirohisa Fujii who in an interview yesterday, said that further falls in the yen may lead to market intervention.

You read that correct: not yen increases, falls! Which, coming just as the USDJPY touched 110 before plunging nearly 150 pips overnight, appears to have been heard loud and clear.

Some of his other comments, which repeat everything we have said from Abenomics' Day1:

  • BOJ’s policy of monetary easing leading to weak yen is mistaken
  • Weaker yen hurts general public through high prices for imported food and fuel
  • Delaying sales-tax rise would lead to a collapse in JGB market, rise in interest rates

Ironic how all these people wait until they are "former" this and that before telling the truth.

Perhaps it was these comments that forced Sumitomo Mitsui to admit that the USD/JPY is entering a correction phase this month, says Shinji Kureda, head of FX trading, and as a result it could decline to 108.26, the low on Sept. 23 and possibly even 107.39, the high on September. Or far, far lower once the failure of Abenomics is finally filtered through the skulls of the fat fingering momos that make up the Japanese market.

And since the Nikkei stock market is nothing but a derivative of the Yen, what happened overnight puts the CNBC article above in a further amusing light because as of a few hours ago the Nikkei closed, plunging by more than 420 points, or down 2.6%, the biggest drop in months, with the Topix crashing as much as 3%, the most since March 14, on volume that was 26% above the average, and wiping out all of September's gains in one session.

Something else those who acted on the CNBC article did not anticipate: all 33 industry groups down, led by real estate and glass/ceramics. The biggest decliners Tokuyama -7.1%, Nippon Electric Glass -5.7%, Suzuki -5.7%.

And now we sit back and await news of another half a trillion plus fat finger as the Bank of Japan desperately struggles to preserve confidence in a crashing economy and market.

 

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Thu, 10/02/2014 - 03:18 | 5278885 q99x2
q99x2's picture

CNBC is like the FED on steroids.

Thu, 10/02/2014 - 03:40 | 5278900 Supernova Born
Supernova Born's picture

CNBC is a Machiavellian toady on estrogen therapy.

Thu, 10/02/2014 - 04:05 | 5278920 wee-weed up
wee-weed up's picture

Cramer says, "BOO-YAH!"

Thu, 10/02/2014 - 07:14 | 5279098 max2205
max2205's picture

Turned on Cnbs yesterday and it was a grey screen all day....maybe Fios dropped them?

Thu, 10/02/2014 - 07:23 | 5279119 markmotive
markmotive's picture

Time for the Greenspan/Bernanke/Yellen put?

Maybe it is time to buy gold?

http://www.planbeconomics.com/2014/09/is-now-the-time-to-buy-gold/

Thu, 10/02/2014 - 05:07 | 5278967 JLee2027
JLee2027's picture

Wow a 2% decline. Now a 20% decline would be a crash.

Thu, 10/02/2014 - 07:33 | 5279147 disabledvet
disabledvet's picture

Well...Zimbabwe is doing better I think is what is being said here.

Japan has to import almost all the basics...plus it has the largest metropolitan area in the world (Tokyo) at I believe over 30 us million.

Not a place where you want a "J curve."

They still haven't raised interest rates yet.
New Zealand has though.

Thu, 10/02/2014 - 10:44 | 5279898 xtop23
xtop23's picture

To everyone who gave me shit for saying Kyle Bass is the fucking MAN.

Lick it up, baby. LICK IT UP.

Thu, 10/02/2014 - 03:23 | 5278888 williambanzai7
williambanzai7's picture

Buy the Fuckn' Shill

Thu, 10/02/2014 - 06:24 | 5279041 JamesBond
JamesBond's picture

When my wife and daughter went to live in Tokyo three years ago, the yen to dollar was 76.  Now it is 109.6.

"luck exists in the leftovers"

-old japanese proverb.

 

jb

Thu, 10/02/2014 - 06:45 | 5279068 Smegley Wanxalot
Smegley Wanxalot's picture

This means you can buy them back cheap!

Thu, 10/02/2014 - 03:33 | 5278895 Carpenter1
Carpenter1's picture

It started last week, it doesn't end until the house burns to the ground.

ZH'ers have known this was coming for years.

It's here and now.

Thu, 10/02/2014 - 04:29 | 5278923 Supernova Born
Supernova Born's picture

Yes, and ebola is in Obola's "birthplace"?...Hawaii (see http://khon2.com/2014/10/01/patient-in-isolation-in-honolulu-hospital-of...).

[Aside: If someone who can "read" people can tell me what is up with the doctor interviewed I'd be fascinated to know your take on her comments, demeanor and body language.]

Remember when Vito Corleone was methodically checked and then quarantined on Ellis Island in Godfather II?

How far we have fallen.

Thu, 10/02/2014 - 03:39 | 5278896 palmdetroit
palmdetroit's picture

Bout right

Can they print a zillion to prop up a 70% population decline?

Thu, 10/02/2014 - 04:43 | 5278945 USisCorrupt
USisCorrupt's picture

The sad Truth will be when there will be no one alive in Japan for the 2020 Oplymic's.

 

The USSA will benefit for the Radiation levels just today were reported to be 1000X's HIGHER than previous reported in California, what a SHOCK! So many will be moving East, just not far enough EAST!

 

How many people are still eating food from the west coast? Thank God for the man made drought.

Thu, 10/02/2014 - 07:04 | 5279085 USisCorrupt
USisCorrupt's picture

Story on California's Radiation levels being 1000X's HIGHER than first reported.

 

http://naturalsociety.com/ca-fukushima-fission-products-release-1000x-ti...

 

The USSA at its finest !

Thu, 10/02/2014 - 03:53 | 5278911 LULZBank
LULZBank's picture

Come... Come to Daddy USD.

Daddy loves you and daddy will kill and plunder to protect your value.

Thu, 10/02/2014 - 03:57 | 5278912 dogfish
dogfish's picture

Abe is looking for the shitter.

Thu, 10/02/2014 - 03:59 | 5278914 Aussiekiwi
Aussiekiwi's picture

CNBC....lol, just a joke in the world now, a propaganda show.

Thu, 10/02/2014 - 06:46 | 5279067 Bay of Pigs
Bay of Pigs's picture

Or as ZH's cdad put it so many years ago here....it is just a fuckan BlowHorn.

Thu, 10/02/2014 - 04:04 | 5278915 LULZBank
LULZBank's picture

Cant't they fat finger that up?

But please don't put that picture up! Its fuckin freaky!

Who needs a dick when you've got finger like that.

From One Million Dollar Man to Half Trillion Fat Finger.

Or even a nice plot to sequel of Gold Finger, where 007 has a mission to stop the Fat FInger from blowing up the whole world and comes back shaken, stirred and soiled.

Thu, 10/02/2014 - 05:09 | 5278969 The Merovingian
The Merovingian's picture

+1000 ...  and thanks for the laugh ...  

Thu, 10/02/2014 - 04:00 | 5278916 The Duke of New...
The Duke of New York A No.1's picture

It all ebola's fault I's tells ya .... long live the central Banking Cartels!!!!!!!!!!!!!

Thu, 10/02/2014 - 04:04 | 5278919 buzzsaw99
buzzsaw99's picture

the maggots will throw savers and pensioners under the bus every time

Thu, 10/02/2014 - 04:12 | 5278924 LULZBank
LULZBank's picture

 

 

  • Weaker yen hurts general public through high prices for imported food and fuel

 

NO! No, it boosts exports and its good for the economy!

Please dont say that after all the race to debase around the world.

Thu, 10/02/2014 - 04:18 | 5278930 Millivanilli
Millivanilli's picture

(Reuters) - Two days after he was sent home from a Dallas hospital, the man who is the first person to be diagnosed with Ebola in the United States was seen vomiting on the ground outside an apartment complex as he was bundled into an ambulance.

 

...

Thu, 10/02/2014 - 04:25 | 5278935 buzzsaw99
buzzsaw99's picture

the response plan is to wait until it spreads and then round people up into haliburton death camps

Thu, 10/02/2014 - 04:34 | 5278939 LULZBank
LULZBank's picture

Did they tell you that the world economy, oil and financial markets are on precarious grounds and you shuld safeguard yourselves? Or they tell you to keep calm and BTFD?

Then they tell you that are worried about that your health and well being because of a deadly virus and you should panic?

Its not that difficult to figure out.

Thu, 10/02/2014 - 06:14 | 5279023 prymythirdeye
prymythirdeye's picture

Booga booga!  Always gotta be afraid of something.  Keeps the cortisol running high and hard.  Seriously, put your big boy/girl pants on and see this fearmongering for what it is.

Thu, 10/02/2014 - 07:38 | 5279153 Dungholio
Dungholio's picture

Bet the neighborhood dogs had a feast with that!

Thu, 10/02/2014 - 07:49 | 5279173 LULZBank
LULZBank's picture

Atleast we will be able to take our pets with us to the FEMA camps.

Thu, 10/02/2014 - 09:08 | 5279454 Charming Anarchist
Charming Anarchist's picture

That sounds like quite the visual.......   where is the cell-phone-camera evidence???  

Pics or it did not happen. If it aint going viral across the internet, I see no reason to believe the regime-stream media.  FFS this is nothing more than stupid fear-mongering.  If it is not a virus, it is a comet hurling its way to earth.   Sheesh. 

 

What are the odds of this vomitting episode NOT being caught on somebody's cell phone??

Thu, 10/02/2014 - 05:43 | 5278992 cherry picker
cherry picker's picture

Today article in Bloomberg crediting Obama with a good economy.

It appears like the house of cards is beginning to topple.  We will know by next week.  Not the first time it appeared it was on a downhill slide then recovered and set records, for no reason.

It never made sense in my simple mind how a companies like Facebook, Google, Amazon or Apple would be worth more than some nations.  I wonder how they will fair when they have to survive on profits, not shareholder stimulous?  As for Apple, how they justify charging as much as it does after reading how FoxTron treats and pays its workers, particularly when the suicide debacle occurred a couple of years ago, it is karma.

Thu, 10/02/2014 - 05:44 | 5278993 aliki
aliki's picture

looks like someone put a boomerang where the fletching was supposed to go on the 3rd arrow

Thu, 10/02/2014 - 06:26 | 5279039 Latitude25
Latitude25's picture

So CNBC will die a slow death as more and more people get reliable information elsewhere.  It's getting so bad that CNBC's lies will tell you just the opposite will happen.

Thu, 10/02/2014 - 07:32 | 5279143 vyeung
vyeung's picture

without trade a surplus, Japan's helicopter money will soon implode the Japanese economy. I guess that is what the Fed wants.

Thu, 10/02/2014 - 09:11 | 5279476 Toolshed
Toolshed's picture

" I guess that is what the Fed wants."

Absolutely. They desperately need someone to point their fingers at.

Thu, 10/02/2014 - 09:20 | 5279521 AdvancingTime
AdvancingTime's picture

The weath that flows out of Japan must flow somewhere and the Fed welcomes it with open arms. Yellen will take all the support she can get.

Thu, 10/02/2014 - 12:06 | 5280373 Mi Naem
Mi Naem's picture

The Chwistmas Weath effect. 

Thu, 10/02/2014 - 08:56 | 5279409 Charming Anarchist
Charming Anarchist's picture

420? 

Either something is going up in smoke or I need somebody to explain the numerological reference in this article! 

Thu, 10/02/2014 - 09:04 | 5279442 roadhazard
roadhazard's picture

I don't see how Japan Ever has an UP day.

Thu, 10/02/2014 - 09:09 | 5279473 Toolshed
Toolshed's picture

"I don't see how Japan Ever has an UP day."

That is because you are letting reality obscure your view of Japan's utopian fantasy. Stop it!

Thu, 10/02/2014 - 09:16 | 5279504 AdvancingTime
AdvancingTime's picture

Interesting both the yen and the stock market in Japan are under pressure.  It is clear that the prospects for Japan are lousy. The writing is on the wall. Japan is facing a wall of debt that can only be addressed by printing more money and debasing their currency. This means paying off their debt with worthless yen where possible and in many cases defaulting on promises made. Japan's public debt, which stands at around 230% of its GDP and is the highest in the industrialized world.

The moment the Japaneses stock market fails to rise enough to offset inflation and realizes even a weaker yen will not help we will see a tsunami of money fleeing Japan. This will constitute the end of the line for those left holding both JGBs and the yen. This has been a long time coming and I contend the cross-border flow of money leaving Japan is why some stock markets have remained so resilient . When Japan crumbles it will be felt across the world. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html

Thu, 10/02/2014 - 10:28 | 5279820 SAT 800
SAT 800's picture

What? they were right, weren't they? aren't investors EXCITED about Japan's performance ? Looks pretty EXCITING to me.

Thu, 10/02/2014 - 10:37 | 5279869 Downtoolong
Downtoolong's picture

Yea, like the time the roller  coaster broke and I was hanging upside down for an hour. That was pretty "exciting" too.

Thu, 10/02/2014 - 11:02 | 5279981 Goldbugger
Goldbugger's picture

Weabols Wobble but they don't fall down.

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