Nikkei falls by 3.8 percent over continued Fed’ concern

Since Ben Bernanke’s comments on May the 23rd, concern over the longevity of the Federal Reserve’s monetary easing policy has dominated the headlines of financial publications across the globe — including ours. Prior to Bernanke suggesting that the US monetary stimulus programme may draw to a close as early as this month, indices across the globe were in the middle of a Rally which dated back to November of 2012.

However, with the worlds largest economy suggesting that it may stop adding funds to its pool, those gains ground to a halt. Adding to woes in Japan was an increasingly disturbing feeling on the trade floor that investors weren’t entirely on board with the nations economic policies, which have been dubbed “Abenomic’s” after their Prime Minister Shinzo Abe. The Bank of Japan are currently injecting money into their economy at an unprecedented rate to combat a deflation problem that has been an anchor on their economy for more than two decades.

Prime Minister Abe addressed the nation today in a speech that was to provide clarification on the policies, why they were put in place and what they hoped to achieve. However, the content was not well received, once again hitting investor sentiment in an already fragile and volatile market.

Simon Derrick of the Bank of New York Mellon said “Abe’s speech today unveiling his growth strategy failed to live up to the market’s expectations, revealing little that was new and focusing rather too much on long term aspirations for most tastes.

At the close of play the Nikkei 225 was down to 13,014.87, a decline of 3.8 percent. This has left the index down by almost 20 percent since its peak in mid-to-late may. The Yen was trading at 99.66 to the dollar, its lowest closing price since the dollar broke the 100¥ barrier last month.