Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo, which oversees about $188 billion, comments on Japan’s Topix Index. The measure has fallen 0.4 percent this week, headed for an eight-week loss, the longest losing streak since 1977.
The index has fallen 17 percent from this year’s high on March 27 as investors worry that Greece, stuck in a political gridlock, may renege on spending cuts required for it to stay in the euro.
On market sentiment:
“The Lehman shock continues to haunt the market. Investors are vulnerable to the unknown and they worry that if they underestimate the Greek issue, things may fall apart. They wouldn’t feel that way if they didn’t go through the Lehman shock.
‘‘In Japan, few thought the earthquake and the nuclear accident had been unimaginable, but they did happen. The market has become sensitive to risk.
‘‘People are headed in the same direction, as buyers have stopped and sellers are dominating.’’
On Japanese corporate earnings and monetary policy:
‘‘We’ve seen expectations turn into disappointments over the past month or so. That’s weighing on Japan’s stocks.
‘‘For one, earning forecasts make you think that they are not only cautious, but also may actually deteriorate. It’s like taking away the ladder from investors who expected a huge rebound in earnings after the earthquake and Thai floods.
‘‘Another reason is that people are losing faith in a shift in the Bank of Japan’s policy. What they said in April gives an impression they haven’t changed much. People are starting to think this way: Japan hasn’t changed. It can’t beat deflation, and monetary policy is behind the curve.”
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