Japan market summary for Tuesday (Oct. 16)
Nikkei 225 Stock Average: -220.23 (-1.3%) to 17,137.92
Nikkei 225 futures Osaka: -270 (-1.6%) to 17,130, Singapore (SGX) -275 (-1.6%) to 17,125, Chicago (CME) *10/15 -190 (-1.1%) to 17,320
TOPIX: -32.19 (-1.9%) to 1,625.25; Advancers 146 x decliners 1,520 (unch. 58), New highs 22 x new lows 47; only 2/33 sectors posted gains [Note: TOPIX will transition to a consolidated 17-sector reference from December]
Jasdaq: -16.33 (-0.9%) to 1,888.14
Yen: strengthened 0.7% to the 116.90 level against the US$ late in Tokyo; strengthened 1.0% against the euro to 165.75 level


Notes: Emerging stock indices MOTHERS and HERCULES fell the most on profit-taking after recent double-digit surges, -4.0% and -3.3%, respectively. Japanese stocks never had a chance as the Nikkei gapped down. Foreign brokerages were loaded with sell orders. The Nikkei was not really able to retest 17,500 and instead it’s now a matter of if it can hold 17,000.

The weaker yen bodes well for exporters, but this theme is kind of stale these days, as overseas economic and market developments can easily sway domestic sentiment (think U.S. subprime — liquidity concerns, China equity bubble fear, Middle East tensions impact on oil prices and don’t forget the broader impact on commodities, which hurts doubly with a weak yen environment).

If one really wants to paint a bearish picture then look to the uncertainty in domestic politics, the BOJ having its hands tied in normalizing monetary policy, meaning bank stocks will likely continue to be a drag on the benchmarks, especially the TOPIX 1. However, if you think about it, this is nothing new as far as the market’s pricing of equities are concerned, so back to those external factors to determine movements over the short-term.