Makoto Otake’s Golden Radio on February 23rd was closed due to a public holiday, so Osamu Aoki and Masaru Kaneko started the show by talking about the news about the Nikkei Stock Average’s new record high.
Aoki“The news that Professor Kaneko should be hearing today is on the front page of the morning edition of every newspaper today.”
Kaneko“The news is calling me.”
Aoki“This may seem out of the blue, but yesterday the Nikkei Stock Average exceeded its highest closing price on December 29, 1989, during the bubble economy, for the first time in 34 years, hitting an all-time high of 39,000 yen for the first time. There may be a small number of people who look at this and think, “Isn’t the Japanese economy getting much better?” or “Isn’t Japan doing well?”
Kaneko“No, the front pages of most newspapers are almost completely unrealistic, and only those related to economic history are fueling the bubble, so everyone in regular newspapers is like, “Wait a minute, okay?”
Aoki“That’s right. In the case of the Tokyo Shimbun, of course, the top page of the front page is the highest price in the TSE market, but the big headline is “Households are seeing little benefit from rising stock prices,” and the front page of the Mainichi Shimbun is also the highest price in history, at 39,000 yen. Even though it says “Endai,” the explanatory article below it says, “It’s presence in the world is declining,” and when I look at the newspapers, I’m not really excited about it…
Kaneko“I’m wary.”
Aoki“I agree”
Kaneko“Asahi’s GDP has been negative for two consecutive terms, and there was a headline in the paper that said, “Why are stocks going up when normally we’re going into recession?” It’s a bit dangerous.When I think back to 34 years ago. , I earned 39,000 yen in December 1989, and at that time it was “Japan as number one.”
Aoki“That’s right. There are six or seven Japanese companies in the top 10 by market capitalization of stocks in the world.”
Kaneko“That’s right. There were many banks that looked like they were in a bubble, but even before that there were companies like Panasonic and Hitachi in the manufacturing industry, so 34 years ago the Japanese economy was growing fairly well.”
Aoki“So, although it was a bubble, the real economy and stock prices were in good agreement.”
Kaneko“Yes. Then there was the Plaza Accord in 1985.”
Aoki“It’s said to be the trigger for the bursting of the bubble.”
Kaneko“It used to be about 230 yen per dollar, but in an instant it was half the price. I think it was about 130 yen. These days.”
Aoki“That’s why the yen was rapidly appreciating.”
Kaneko“Then, towards 1995, it will fall below 100 yen. It’s completely different from now. Today, Japan’s economy is not strong enough, and 100 yen becomes 150 yen. So the situation is completely reversed.”
Aoki“I’m the same way, but I’m a little ignorant about economics, so why are stock prices going up so much even though the real economy is not doing so?The same goes for real estate, but in terms of phenomena, it’s the same as the bubble situation.” The situation has become dangerous, but before we talk about how dangerous it is, why are stock prices going up in the first place?
Kaneko“If I explain a few conditions in detail, one is that we have aggressively implemented monetary easing due to the new coronavirus, all over the world. That is why we already have extra money. We are looking for somewhere to go. So, in Japan’s case, the Bank of Japan has no choice but to continue monetary easing.They can’t raise interest rates in a pyramid scheme.”
Aoki“I always ask Mr. Kaneko, but in short, we have been issuing a lot of government bonds and have a debt of over 1,000 trillion yen, and about half of that is bought by the Bank of Japan, so if we raise interest rates, the yield on government bonds will increase. Even if we wanted to raise it, we couldn’t raise it because it would cause the country’s finances to go bankrupt.”
Kaneko“There will be unrealized losses on government bonds, and if the price rises, the bubble may burst, so it’s easy for everyone, including foreign investors, to read.The Japanese government is putting together a large budget, and the Bank of Japan is They say that the easing will continue.If that is the case, unless other countries cut interest rates, the interest rate differential will continue to continue and the yen will depreciate.If the yen depreciates, corporate profits will greatly increase.It is true that the situation due to the coronavirus has slightly increased. Automobiles have recovered due to exports, but I think the 150 yen price means that car companies are probably setting their prices at a level of 125 to 128 yen.Increasing profits.If the price is 150 yen, they can sell it and sell it with their own hands. That’s how you earn 25 yen.”
Aoki“Rising prices, such as food and inflation, increase prices and make it difficult for ordinary people to live.”
Kaneko“Export companies make a raging profit, so stock prices naturally rise.”
Aoki“Performance looks good.”
Kaneko“Furthermore, from the point of view of foreign investors, it is cheap because the yen is so weak.Nowadays, there are a lot of inbound tourists coming here, like lunch in Japan costs 500 yen.It’s so cheap that when you go to other countries in Southeast Asia, it costs 1000 yen. It’s the same as saying it’s cheap because 2,000 yen is commonplace, but Japanese stocks and real estate are so cheap that it can’t be helped.On top of that, China is suffering due to the bursting of the bubble.There is no flow of investment to China, so that’s how much money goes to Japan. That’s why I’m coming.”
Aoki“In other words, in China, there are concerns about the real estate bubble bursting, tensions toward China as the US-China conflict continues, and surplus money around the world is being used rather than investing in China. , I suddenly felt like Japanese stocks were cheap.”
Kaneko“In the past, it was a bubble, but Japanese products had already taken over the world to such an extent that things like Toshiba radio cassette players being destroyed in the United States made the news in a state called “Japan as Number One.” is”
Aoki“At that time, there was trade friction between Japan and the United States, and I thought that America could be bought for the price of land inside the Yamanote Line in Tokyo.”
Kaneko“Compared to that, the current situation is very unstable.So, I’m not saying that the stock is going up because the fundamentals are good and it’s going to grow, but now is the time to buy.I’m thinking like this, I can escape at any time. Everyone is buying it.”
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2024-02-23 08:18:00
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