What will happen in 2022 when the stock price of Corona is restored?

December 30, 21:55

According to the maxim of the stock market, in 2021 and 2022, "the cow stumbles and runs through Tora Senri."

In 2021, the Nikkei Stock Average since the bubble economy recovered temporarily to the 30,000 yen level.

However, after that, there was a sense of caution about the mutant virus, and the footsteps became heavier just like a cow.

In the next fiscal year and 2022, the growth rate of the Japanese economy is expected to exceed that of 2021, but can stock prices continue to rise as the saying goes?

(Hiroshi Nakazawa, Reporter, Ministry of Economic Affairs)

"Father of the modern Japanese economy" at the big meeting

Eiichi Shibusawa, who is said to be the father of the modern Japanese economy, appeared at the "Dainokai" held on the Tokyo Stock Exchange on December 30th.

Ryo Yoshizawa, the actor who played the role of Shibusawa in NHK's taiga drama "Reach Beyond the Sunny", rang the bell and wished for a rise in stock prices next year with the people concerned.

On the day of the big meeting, the closing price of the Nikkei Stock Average was 28,791.71 yen.

The closing price at the end of the year was the highest in 32 years since the 38,900 yen level at the height of the bubble economy.

However, looking back on the movement of the stock price for one year, although it once recovered to the 30,000 yen level, the price has dropped since then, and the pace of increase is heavy.

Play with Corona

February: Over 30,000 yen

The Nikkei Stock Average in 2021 will start from the 27,000 yen level.

The second state of emergency was declared in January, but the upward trend continues due to expectations for vaccine development and the huge fiscal mobilization of each country to support the economy.

Then, on February 15, the closing price of the Nikkei Stock Average reached the 30,000 yen mark.

It was the first time in 30 years and 6 months since August 1990.

April: The price fell by 1,100 yen in two days due to concerns about "declaration",

but after that, the spread of the new corona infection will weigh on the market.

Due to concerns about the third state of emergency being issued, stock prices will turn downward, with a drop of more than 1,100 yen in two days in April.

August: lowest price in corona and car shock

Since July, infection with the mutant virus "Delta strain" has spread in Japan and overseas.

Toyota Motor announced a large-scale production cut because parts procurement was delayed due to the spread of infection in Southeast Asia.

The Nikkei Stock Average fell sharply to the lowest price of 27,013.25 yen on August 20 (based on the closing price).

September: Recovery to the 30,000 yen level again

On the other hand, in September, when Prime Minister Suga abandoned his candidacy for the LDP presidential election, expectations for economic measures by the new cabinet increased.

The stock price rose at a rapid pace due to the smooth progress of vaccination, and on September 14, it rose to a maximum of 30,670.10 yen.

November: Omicron shock

However, stock prices do not continue to rise.

Concerns about the future of the Chinese economy, soaring crude oil prices, and changes in US monetary policy have led to a retreat.

In November, a new mutant virus "Omicron strain" with strong infectivity emerged and spread to the world in a blink of an eye, raising a sense of caution about the future, and the stock price temporarily fell below 28,000 yen.

December: The end of the year when the fog is not clear

There is a view that the risk of aggravation of Omicron strains is low, and the US year-end sales season has been strong, so the sense of caution has eased somewhat, but the "fog" that the future is uncertain has not cleared up. There is none.

The pace of the rise was heavy, and the price of the big meeting on December 30 fell, closing the transaction in 2021.

What about 2022?

What will happen in 2022?

Norihiro Fujito, Chief Investment Strategist of Mitsubishi UFJ Morgan Stanley Securities, cites the following three points when looking at stock prices.

1 Inflation

2 Elections

3 Corona

Point 1 Inflation

Mr. Fujito's first concern is the progress of inflation in Europe and the United States.

The consumer price index in the United States in November increased by 6.8% year-on-year, the highest level in 39 years since 1982.

The EU-European Union's November consumer price index also rose 4.9% year-on-year, the highest growth rate since 1997, as statistics can be traced back.

He points out that the key point is how to successfully control such inflation in the future.

Mr. Fujito:

"Whether the Fed, the central bank of the United States, can successfully control prices by raising interest rates. If prices continue to rise, the Fed is supposed to do three times. If we don't have it, we may do more. Since rate hikes are a big enemy of stock prices, if prices continue to be higher than expected, it will be a considerable weight for stock prices. After all, the monetary policy of the central banks of each country I think it will be the year that holds the key. "

Point 2 Elections The second election

is the election.

The House of Councilors election is held in Japan in the summer, and the midterm elections are held in the United States in the fall.

As a result of the election, the focus is on the stable administration of the government.

Mr. Fujito:

"If politics is confused, it will not be possible to implement policies well. This will inevitably affect the economy and corporate performance, so naturally it will be negative for stock prices."

Point 3 Corona The

third is corona.

With the spread of Omicron strains around the world, it still takes time for economic activity to normalize, and corporate businesses are not "post-corona (after corona)" but "with corona (with corona)". I point out that it will be.

Mr. Fujito:

"For example, airlines and railroad companies, cruise ship operators in the world, casinos, leisure or travel-related. These industries can return to so-called normal business, and you do not have to worry about Corona. I don't think it's necessary to draw a scenario where the economy itself will slump and, for example, negative growth, but the impact of Corona will still be reflected in our lives and corporate performance. Let's think about this scenario. "

"Yang Water Tiger" is a year of geopolitical risk!

??

The 2022 zodiac sign is "Mizu no Etora".

The last 60 years ago, Tora was in 1962, when the Soviet Union tried to build a missile base in Cuba during the Cold War, the conflict with the United States intensified, and the world faced the crisis of nuclear war. A crisis has occurred.

Tensions between Russia and the West over Ukraine.

Some experts point out that 2022 will focus on these “geopolitical risks”, with the US-China conflict over Taiwan and human rights in mind.

Is it possible to overcome various concerns and lead to a rise in stock prices?

Even if it becomes "with corona", 2022 is likely to be a year in which it is more important to devise ways to steadily grow the economy.

Kei Nakazawa,

Reporter,

Ministry of Economy, Trade and Industry

Joined

Fukushima Bureau in

2011

After working at Fukuoka Bureau, he is

currently in charge of the Ministry of Economy, Trade and Industry and the financial industry.