The cyclical recovery in Japan's economy which began in 2012 has been further boosted this year by the policy initiatives of prime minister Shinzo Abe, dubbed ‘Abenomics'.
This, coupled with more aggressive monetary policy from the Bank of Japan and a weakening of the yen, has resulted in a strong rise in the Japanese equity market in the first five months of 2013. However, from 23 May the trend abruptly reversed and the stock market fell 20% in 16 trading days. The pull back in the market was initially seen as a healthy correction after a long winning streak but was accompanied by a sharp increase in volatility, not just in the equity market but also in bond and currency markets. Sentiment was also affected in the short term by the lack of clear growth...
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