The Huge Japanese Rally Has Run Into A Brick Wall

Since last October, basically, the Japanese stock market has been insanely hot.

Thanks to the new government, and the expectation of a lot more easing (both monetary and fiscal) the Nikkei has been on fire, with 2% up days a common sight.

But over the last couple of weeks, things have run into a bit of a brick wall.

The yen has stopped weakening, and stocks have stopped gaining.

On Thursday, stocks fell 1.2%.

Particularly hard hit was the REIT index, which fell over 3%.

This is all despite the usual jaw-boning and headlines out of the Bank of Japan about trying to hit aggressive inflation targets and so on. Clearly the effectiveness of that as a market-moving device has faded. Now time to put it all into action.