Solving the puzzle of the current market

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A tentative stability in Tokyo today

The recovery in Japanese stocks and the renewed downturn in the yen are hardly strong trends at the moment. I think you can say that the Bank of Japan and traders’ forecasts of what the bank will do have stabilized the yen and Japanese stocks, but that the stability is tenuous and depends on news/rumor/sentiment about the Federal Reserve and on yields in the market for Japanese government bonds.

Japan’s domestic investors discover the rally in Tokyo

It looks like Japanese investors have decided to start putting some money into Japanese equities. That—if the trend continues past April–could push the Tokyo market another leg higher. In April inflows into domestic Japanese mutual funds came to 440 billion yen (or $4.7 billion at 95 yen to the U.S. dollar.) That’s the biggest monthly inflow in 13 years.