Welcoming “90,000 visitors from all over the world during a pandemic” to a “densely populated city where vaccinations trail Bangladesh… gee, what could go wrong?” asks William Pesek in Nikkei Asia. Japan insists that it can safely hold the Olympic games in July, but opinion polls show that more than 80% of the country’s citizens are opposed. Pressure is growing on the prime minister, Yoshihide Suga, who has backed the games. The head of e-commerce giant Rakuten, Hiroshi Mikitani, has dubbed the Olympics a “suicide mission”.
Japan has so far done a relatively good job at containing the virus, but was forced to declare a state of emergency last month in response to a new wave of cases. Uncertainty about the Olympics has weighed on markets. The Topix index has gained 7% so far this year, making it a global laggard.
Overseas investors dumped a net ¥1trn (£6.5bn) in local stocks during the second week of May, says Hideyuki Sano on Reuters, the biggest outflow since March 2020. The economic costs of cancelling the Olympics would be limited as Japan has already barred foreign tourists from attending. The games look set to deliver a stimulus equivalent to just 0.3% of GDP. That is a poor return given the risk of importing “multiple Covid-19 variants”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Still, the long-term case for Japan is encouraging, says Simon Constable in The Wall Street Journal. The market was once shunned for its poor corporate governance, but reforms have forced Japan’s boardrooms to take shareholder value seriously. Schroders reports that the market’s average return on equity, a key gauge of profitability, has risen from 5% in 2013 to 6%-7% in 2019. That should spark more interest from global investors once the Olympics omnishambles has been sorted out.
-
8 of the best properties for sale with indoor swimming poolsThe best properties for sale with indoor swimming pools – from an award-winning contemporary house in East Sussex, to a converted barn in Hampshire
-
Chinese stocks slump on first trading day of 2025Chinese stocks suffered in the new year from their worst first day of trading since 2016, despite a state stimulus package
-
Why Wise could be worth a lot more than its share price impliesForeign-exchange transfer service Wise has the potential to become the Amazon of its sector – here's why you should consider buying this stock now
-
Can The Gym Group pump up your portfolio?Gym Group was one of the best UK small-cap stocks in 2024 and will beef up your profits this New Year
-
MoneyWeek's five predictions for investors in 2025MoneyWeek's City columnist gazes into his crystal ball and sees five unexpected events in store for investors in 2025
-
How buy-and-build stocks deliver strong returnsBunzl, DCC and Diploma became successful through buy-and-build – rolling up dozens of unglamorous businesses. How does it work and what makes it successful?
-
Singapore Technologies Engineering shows strong growthSingapore Technologies Engineering offers diversification, improving profitability and income
-
South Korean won hits 15-year low – what it means for 'Korea discount'After Yoon Suk Yeol's failure to declare martial law, South Korean markets are reeling, with the weakest won since 2009. Will this worsen the Korea discount?
-
Why undersea cables are under threat – and how to protect themUndersea cables power the internet and are vital to modern economies. They are now vulnerable
-
Japan’s medium-sized stocks provide shelter from trade warsNicholas Price, portfolio manager of Fidelity Japan Trust, tells us where to invest in Japan
