Nikkei bounces back after yesterday’s losses

<p>Japanese shares recovered from yesterday’s losses after it emerged that Japan entered recession.</p>

Japanese stocks bounced back today (November 18th) from yesterday's losses as investors await Prime Minister Shinzo Abe's decision on wether to call a snap election and implement stimulus measures.

New data published yesterday showed Japan's economy unexpectedly entered recession, shrinking 0.4 per cent quarter-on-quarter between July and September this year, while analysts bet on a 0.5 per cent growth. It followed a revised 1.9 per cent contraction in the second quarter of 2014.

Prime Minister Shinzo Abe is now widely expected to delay a sales tax rise due next October and announce snap elections.

The Nikkei Average rebounded 2.2 per cent to 17,344.06, recovering some ground after a three per cent decline in the previous session.. The broader Topix index bounced back 2.1 per cent.

"The Japanese market had risen sharply so yesterday's shock caused volatility. The market's focus now is whether Abe can continue to draw support from voters, and what kind of measures he will announce," Isao Kubo, equity strategist at Nissay Asset Management, told Reuters.

Learn about the Asian markets and CFD trading at City Index.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.