This week saw Japan awarded to 2020 Summer Olympics and may prove to be a most welcome shot in the arm for the beleaguered Japanese Economy.
The stock market there, certainly bounced well on the news – too well in fact for us to be able to get safely set on Nikkei Trader on Monday. Preparing for an Olympics, is truly an Olympic feat, no pun intended, with billions going into infrastructure and redevelopment.
Having skied at both Nagano (1998 host City) Salt Lake City, Utah (2002 host City), there is no question that there is a lasting legacy of infrastructure and tourism spending. My personal preference is Deer Valley, Utah (strongly recommend the Bison Burger at the No Name Saloon, after a long day in the powder), although Nagano is certainly a far better value/significantly cheaper play in a more cost conscious environment.
Japan has the world’s most ageing population ie proportion over 50, of any major economy and has been crippled by the massive debt that has resulted from the 1989 stock market and 1990s real estate crash. However this kind of massive economic stimulation, and that of the pledged $500m in clean up aid to Fukishima, may be just what the country needs.
The risk is of course, the traditional cost blow-outs associated with preparing for an event like this. Vast cost over-runs could turn an economic win into a toxic chalice of further debt. Over the coming years, we will see this unfold and to be honest, I don’t have a view as to whether it will be a profitable Olympics for the hosts.
However, at the other end of the scale – where we trade with Nikkei Trader, the five minute bars are what hold our attention. Nikkei Trader has been solid this year, with a positive points return. As a fully managed strategy, it provides 100% passive exposure to the short-term price moves in the Japanese equity index. If you would like to take a look at how this works, click here.