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An indispensable resource for anyone wishing to understand and successfully invest in the Nikkei.

Recent years have seen steady growth in investor interest in the Japanese equity market, the second largest in the world. Japanese Equities describes how the Nikkei works, explains its driving factors and presents a collection of insightful case studies to help you successfully invest in the market. Author Michiro Naito, a former equity derivatives/quantitative strategist for J.P. Morgan Securities Japan, helps you understand the ups and downs of the market and capitalise on its money-making opportunities.

Already a substantial part of many equity investor portfolios, the Nikkei exhibits characteristics that respond more sensitively to global economic conditions than other developed markets. This valuable book helps you grasp the idiosyncrasies of the market and correctly time investing decisions to maximise profits. This English translation of the original Japanese book includes additional chapters discussing recent political developments that influence the Japanese economy such as the re-election of Prime Minister Shinzo Abe, the trade policies of Donald Trump (the US-China trade war) and the difference in monetary policy between the Bank of Japan and the FED. This book: 

  • Offers a simple quantitative strategy to take advantage of the cyclical trends and repeating patterns of the Nikkei to attain desirable returns
  • Explains how derivatives instruments affect the equity market, which is seldom covered in textbooks
  • Highlights a quantitative approach supported by solid historical back-tests
  • Discusses fundamental and technical factors that underlie the movement of the Japanese equity market
  • Provides insights drawn from the author’s decades-long research and experience working in the securities industry

Japanese Equities: A Practical Guide to Investing in the Nikkei is a must-have text for investors, hedge fund and pension fund managers, academics, researchers and students of international finance. 

Table of Contents

  1. Cover
  2. About the Author
  3. Acknowledgments
  4. Preface
    1. “Noise”
    2. History Repeats Itself
  5. CHAPTER 1: Macro Indicators and Seasonality
    1. OECD CLI
    2. Economy Watchers' DI
    3. ISMPMI
    4. Seasonality
  6. CHAPTER 2: Policy Impact
    1. Abenomics
    2. BoJ and Kuroda Bazooka
    3. Abenomics Market II
    4. GPIF
    5. Corporate Governance
    6. BoJ ETF Purchases
    7. Negative Interest Rate Policy
    8. Impact of Consumption Tax Hikes
    9. The Fed
    10. FX and the Japanese Equity Market
    11. US Presidential Elections
  7. CHAPTER 3: Topics Derivatives
    1. Volatility
    2. Historical and Implied
    3. Futures Influence
    4. Impact of Index Funds
    5. Influence of Structured Products
    6. Impact of Convertible Bonds
    7. Inverse and Leveraged ETFs
    8. Put/Call Ratio
    9. VIX Index
  8. CHAPTER 4: Market Tops and Bottoms
    1. Volatility as Indicator
    2. Economy and Policy as Indicators
    3. Valuations and Technical Indicators
  9. CHAPTER 5: Other Market Movers
    1. Foreign Investors
    2. Factor Analysis
    3. Sector Rotation
    4. Share Buybacks
    5. Dividends
    6. Stock Splits and Accessibility
    7. Natural Disasters
  10. CHAPTER 6: September 2017–December 2018
    1. Backdrop
    2. Japanese Equity Market
    3. Interest Rates and Equity Market
    4. Technical Indicators
    5. Seasonality and the OECD CLI
  11. Epilogue
  12. Index
  13. End User License Agreement
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