The Nikkei 225 is trying to hold 9,000 after selling off below 7,000 at one point on liquidation selling from foreign investors. The first support for the market came from Japanese individuals and trust banks (pension funds), whose net buying began to offset net selling by foreigners and particularly brokers who had been dumping prop positions in size.

The good news from China's big economic stimulus plan was a weaker yen and further strength in Japanese stock prices. China announced a $586 billion stimulus plan aimed at higher spending on roads, airports and other infrastructure, and was a drastic departure from three years of restrictive policies, which began to be rolled back from mid-2008 as the US financial crisis went global. In Q3 China's GDP growth slowed to 9% (the lowest in 5 years) and there are economist estimates that go as low as 6.5%.

Increased infrastructure spending by China is most likely to benefit Japan's construction equipment makers, including Komatsu (6301.T) and Hitachi Construction (6305.t), while a weaker yen (to below JPY100/US$) would also produce a nice forex windfall for both next year.


AP Article here