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Market Review for August 2021

TOPIX ended up on the previous month-end. Solid Japanese corporate quarterly earnings results suggested Japan is on track to a recovery from the impact of the pandemic and this pushed the market higher. Although the market temporarily declined on the declaration of the fourth state of emergency following a spike in the number of COVID-19 cases, the news of the US bipartisan infrastructure bill passing in the Senate underpinned the market.

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The Wave of Greening is Coming to Japan

The wave of greening is rushing into Japan as the country rapidly catches up with rest of the world. In its latest green growth strategy and goals towards carbon neutrality by 2050, the Government of Japan has set a target of reducing greenhouse gas emissions by 46% by 2030 (as compared to 2013 levels).
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Market Review for July 2021

TOPIX ended down on the previous month-end. Concerns over an increase of COVID 19 variant cases capped the upside of the Japanese equity market throughout the month. Whilst a rise in US equity market and a solid Japanese economic statistics supported the market, the announcement of the fourth state of emergency in major cities in Japan following the spread of COVID 19 due to the variant, shaved investors’ sentiment and fuelled uncertainty over the outlook for the recovery of economic activities.

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Foresight in Japanese Politics

With the House of Representatives general election scheduled after the Tokyo Olympic and Paralympic Games, uncertainty looms over the politics. The future of the Suga administration hangs on the success of the Olympic Games, and the successful roll out of vaccinations while keeping the number of infected in check.
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Market Review for June 2021

TOPIX ended up on the previous month-end. The Japanese equity market was driven by the US equity market throughout the month. At the beginning of the month, the market rose on the good progress of the vaccination program in Japan. The market plunged after an earlier than expected tapering was hinted at by the Federal Open Market Committee (FOMC) followed by a sharp fall in the US equity market. However, the market gradually offset the fall as US interest rate stopped rising towards the month-end.

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Japan's Governance Code Revision

In June, a revised Corporate Governance Code was released. The Code was revised taking the reform of the Japanese stock market into consideration. It will go into effect in April next year, with the top-tier listings going into the Prime Market corresponding to the current First Section of the Tokyo Stock Exchange(TSE).
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Market Review for May 2021

TOPIX ended up on the previous month-end. The market was supported by a pause in the rising number of COVID-19 cases in Japan and expectations for the progress of vaccination program whilst the market was temporarily impacted by a plunge of US IT stocks following a hike in US treasury rate in mid-month. The state of emergency in Japan which was extended by another month to mid-June but it did not affect the market.

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Vaccination and the Japanese Economy

Japan has seen the biggest delay in the roll out of vaccines among the major nations of the world. The government is currently taking various measures to accelerate vaccinations due to a sense of crisis, and it is expected that the vaccine will spread to the general public by the latter half of the year.
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Market Review for April 2021

TOPIX ended down on the previous month-end. The third announcement of the state of emergency in Japan due to resurgence of COVID-19 cases weighed the market. The COVID-19 vaccination campaign in Japan has been slow compared with other developed countries due to supply shortage and delays, which depressed the market.