The
Nikkei
Financial
Daily

May 25, 1994

Japanese Stocks, the Turning Point During June to September, 1994

An interview with Mr. Martin A. Armstrong, Chairman of the Board, Princeton Economics International Ltd. in the US

The Low Yen Trend in Foreign Exchange

Mr. Martin A. Armstrong, Chairman of the Board of Princeton Economics International in the US, who is analyzing stocks and bonds markets, had the interview with a journalist of Nihon Keizai Shimbun (Nikkei) and stated the outlook of Japanese stock market as the following: “The turning point will arise in June to September this year, after that 1995 to 1996 will continue the Bullish Reversals.” The details of the statement are clarified hereunder:

1. The most important factor in stating the outlook of the stock market quotation is the trend of foreign exchange. Dollars will be stronger against Yen in the medium-range long term. Yen will fall down against Dollars, then the business results of Japanese enterprises will improve majoring the export-oriented enterprises.
2. The first of all of the foreign exchange quotation, the turning point in the near future is $1 – Yen 106.55. (The closed base at the end of the week.) If over coming the turning point will incline to low Yen, furthermore Yen will gradually decline. The case of the opposite phenomenon occurs as to Yen will not be low until the turning point, the Yen will be rapidly becoming high as $1=Yen 94 in June. There are two ways to look at the prospects.
3. However, the foreign exchange quotation in either case will be the trend of the low Yen in the medium-range long term period and about two years to come. Yen will be low until $1=Yen 130.
4. The stock market quotation will meet the adjustment phase in June to September this year. In this case, three prospects will consist. The first prospect is, the case of the low price (Yen 15.671) which is fixed on November 29, 1993 will be exceeding standard and stay the low. If this occurs, 1996 to 1998 will be raised to Yen 26,000 afterwards. The second prospect is, that the low price of November 1993 between the low bedlock (Yen 14,194) on August 19, 1992 will stop low. In this case, the price will go up to Yen 33,000 during 1996 to 1998. The third prospect is the same scenario as the very bedlock price. In this case, it will stop lowly between Yen 11,000 to 12,000 and between 1996 to 1998, it will go up to Yen 45,000 to 46,000.
5. If the foreign exchange quotation will be the scenario of low Yen, the scenario of the stocks quotation will be the first prospect. If the scenario will be high Yen then the stocks quotations will be the second and the third prospects.