The recent stimulus plan revealed by the Bank of Japan on October 31 has been widely talked about by traders and investors. Interestingly, this plan was announced shortly after a peak in The Bubble Index: N225 (1260 and 1764 days). The 1260 day index peaked on September 30, 2014 and the 1764 day index peaked on October 7, 2014.
Nikkei
Week ending May 27, 2013.
Based on the figures, there appears to be no indication of a current bubble.
May 10, 2013:
I do not see any chances of there being a bubble in the Nikkei Index at this time. Although, there appears to have been a recent bubble.
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| Figure 1 |
Figure 1 produced with C++ code. Nikkei Index. Seven year window of data. Every data point is a new week. Every peak in the market is represented by a red vertical line.
1. June 24, 1996 – followed by a 23.2% drop
2. May 20, 2002 – followed by a 35.7% drop
3. September 29, 2008 – followed by a 34% drop
4. March 29, 2010 – followed by a 20% drop
5. March 12, 2012 – followed by a 16.7% drop
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| Figure 2 |
Figure 2 produced with C++ code. Nikkei Index. Six year window of data. Every data point is a new week. Every peak in the market is represented by a red vertical line.
1. May 1, 1995 – followed by a 15% drop
2. November 18, 1996 – followed by a 18% drop
3. September 17, 2001 – exact bottom of downturn (or perhaps related to Sept. 11, 2001)
4. March 29, 2010 – followed by a 20% drop
5. March 12, 2012 – followed by a 16.7% drop