Sleepy Japan Stocks Set for Rude Awakening, Strategists Say
- Abnormal first-half lull presages second-half volatility spike
- Nikkei half-year volatility data back to 2001 show pattern
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If history is any guide, the months-long lull in Japanese equities could take an abrupt turn in the second half.
Japan hasn’t been an exception to a rare period of historically-low volatility in global equity markets, coupled with lofty stock prices in the first half. The Nikkei Stock Average Volatility Index has been hovering around its lowest levels in more than a decade, with the Bank of Japan’s massive purchases of exchange-traded funds cited as a factor in keeping a lid on any extensive price swings.