Japan Nikkei Broke Out: Butterfly Effects On S&P 500

Envision ResearchInvesting Group LeaderFollow5ShareSavePlay(9min)CommentsSummaryThe Nikkei 225 surged past 58,000, driven by Takaichi’s pro-growth reforms and a structural re-rating of Japanese equities.Rising JGB yields—30-year now above 3.5%—signal a secular shift in the bond markets too.These changes can attract domestic and global capital back to Japan’s equity and bonds, weakening the support for US equity valuation.Actionable ideas include both broad Japan equity exposure (e.g., EWJ) and targeted exposure to Japanese banks and defense sector stocks in both Japan and the US.Looking for a helping hand in the market? Members of Envision Early Retirement get exclusive ideas and guidance to navigate any climate. Learn More » ayo888/iStock via Getty Images 'Takaichi Effect' Pushed Nikkei to Record Levels The Nikkei 225 index has been moving sideways for almost 2 years around 40,000, as you can see from the following chart. Thanks to the economic agenda that Sanae TakaichiThis article was written byEnvision Research19.86K FollowersFollowEnvision Research, aka Lucas Ma, has over 20+ years of investment experience and holds a Masters with in Quantitative Investment and a PhD in Mechanical Engineering with a focus on renewable energy, both from Stanford University. He also has 30+ years of hands-on experience in high-tech R&D and consulting, housing sector, credit sector, and actual portfolio management.He leads the investing group Envision Early Retirement along with Sensor Unlimited where they offer proven solutions to generate both high income and high growth with isolated risks through dynamic asset allocation. Features include: two model portfolios - one for short-term survival/withdrawal and one for aggressive long-term growth, direct access via chat to discuss ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.