To put it into perspective, Monday's -12.48% pullback in Topix (Japanese Stockmarket) was the second largest on record following the Black Monday crash of October 1987.
It is certainly not everyday that you see these types of single day drops in blue chip Japanese companies:
Topix Banks -18%
Mitsubishi UFJ -17%
Japan Tobacco -17%
Nintendo -17%
Toyota -14%
Hitachi -13%
Softbank -19%
Honda -18%
The last time we've witnessed a -20% 3 day move in TPX was during the 2008 GFC and 2011 earthquake.
Post the move, a note from Goldman Sachs contends that corporate Japan today is an a far stronger place than during those periods.
1/ Companies are beating estimates. So far in 1Q, 56% of companies have exceeded street expectations.
2/ Revisions are firmly positive. 1Q net profits expectations are +14%.
3/ The TSE reform has triggered a once in a generation restructuring agenda to make companies more shareholder friendly and capital efficient
4/ Japan corporate buybacks and dividends are at record levels, highlighting balance sheets remain rock solid.
5/ Most pundits on Japan remain firmly in the soft landing camp. Ultimately, the Fed has 525bps of wiggle room to avoid a hard landing.
Is the fundamental story one that is Japan remains strong?
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