With Japan’s Economy Strengthening, Have You Considered the Nikkei?

The most widely followed and most frequently quoted index in Japan is the Nikkei 225 Stock Average. The Nikkei 225 index is comprised of the top 225 top tier (the "bluest" chip) Japanese companies listed in the First Section of the Tokyo Stock Exchange. CME Nikkei 225 products are traded at XPRESSTRADE in US dollars, for easy to understand calculations.

After many years of battling with substandard market rules, inadequate corporate management, and a general drop in prices, Japan is starting to show signs of strong economic growth. Fundamental changes have taken place over the past couple of years, leading to corporate spending and heightened consumer confidence. The most important of these changes is the gravitation toward US-style standards and practices for how companies and markets are run. Though few analysts would say the country is on par with the US, most would agree the improvements have been significant.

The Nikkei had not closed above 15000 since December of 2000. As of December 6, 2005, the December futures contract was above 15575, and had been as high as 15590. In order to sustain this rally, Japan must maintain efforts to improve financial disclosure and minority shareholder treatment, as well as hold off the threat of deflation. If these conditions are met, the 35% gain in the Nikkei 225 realized this year may just be the beginning.
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