When you take a massively industrial nation that exports vast quantities of products to the rest of the world and has a currency policy of constantly depreciating its own currency to keep trade going favorably you get a stock market that is very excitable to say the least, volatile is also a great way to describe it, but where normal people hear “risk” binary options traders hear “opportunity”, and if you listen closely enough, you can hear the Nikkei 225 binary options calling your name, or they could just be saying “opportunity”, you decide.
The Nikkei began to be calculated on September 7th 1950, dated retroactively to May 16th 1949 and since that time has become one of the most widely relied upon stock indexes in the world alongside the Dow Jones, FTSE 100 and the DAX to name but a few.
While the Nikkei remains a highly tradable binary options index, one that you can profit a great deal from, it should also merit a great deal of respect and even caution, as its movements can often be rather violent with rapid rises and even faster declines, all within the space of a single trading session.
In its attempt to recover from World War 2, the Japanese economy entered an extended period of nearly unmatched production and efficiency , a period that lasted for decades, entire industries were formed and made substantial advances over the years and the policy of the Japanese government made things far easier – they believed that to help maintain growth Japan had to export a great many of its production, to that end, they began a policy of keeping the Yen low, even by artificially deflating it by comparison to western currencies, the object of this policy was quite simple – to encourage foreign nations and corporations to purchase Japanese products, regardless of their type. Anything from cars to computer related products was exported and the Yen’s value made these products much cheaper than their western counterparts.
This trend peaked in the mid to late 80’s in what has come to be known as the “Japanese asset bubble”, the Nikkei peaked at just under 39,000 points on December 29th 1989, but as most financial bubbles go, this one too burst rather shortly after, and by December 1991, a mere 2 years later it was down to a miserable 22,984, losing over 33% of its value.
Belt tightening measures ensued throughout the 90’s and into the new millennia in an attempt to aid financial recovery, but the Nikkei continued a slow (yet far more controlled) decline. By the time the 2008 global financial was at its peak, the Nikkei was down as low as 7,054.
The Nikkei was in a process of recovery in 2011 when Japan was struck by a massive earthquake, when results became devastatingly apparent, the Nikkei dove once more, losing 10% of its worth a single day of trading.
It is rather easy to see why the Nikkei is considered to be one of the most turbulent indices, where things get interesting is when one accounts for the fact the Japan is hardly a developing nation, but rather a world economy powerhouse, a fact that almost assures one that it will continue to be a factor in world economy events for the foreseeable future.
Make sure you pay close attention to the movements of the yen and policies enacted by the BOJ, as they will strongly effect the direction the Nikkei takes, as will any information regarding exporting of goods from Japan to other nations.
But don’t let the Nikkei’s volatility deter you, it may be risky, but if you treat it with the proper amount of respect an investment in Nikkei binary options can help this jewel of the eastern markets become the jewel of your portfolio.