In Tokyo a stock market pause before Sunday’s elections

The Nikkei 225 index fell 1.48% overnight in Tokyo on profit taking before Sunday’s election for the upper house of Japan’s parliament. Prime Minister Shinzo Abe’s coalition is projected to cruise to an easy victory giving the government control of both houses of parliament and a clear path for pushing forward Abe’s economic program.

Bank of Japan move crushes the yen

The Tokyo market, which had sold off yesterday on worries that new Bank of Japan Governor Kuroda might be timid in his first moves, rallied, climbing 2.2% overnight. With the massive program of bond buying certain to put downward pressure on Japan’s currency, the yen fell 3.23% against the dollar to 96.14

Japan to the rescue of the U.S. Treasury market?

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Is today a turn in Tokyo markets that puts Japanese stocks back in rally mode?

One day doesn’t a rally make, butfter sagging for two days, shares in Japan and China are up today. The Shanghai Composite Index was down 0.03%, essentially unchanged. Today’s action re-enforces my belief that the decline in the first two days of the week was the normal pause that follows on a big advance like that recorded by the Tokyo market since the nid-December election.