Cheap Shares Fail to Entice in Japan; Worries Over Exposure to Global Slowdown Sinks Nikkei
Tokyo -- Japanese stocks are cheaper than they have been for decades. So why are so few investors interested in buying them?</br></br>Driving stocks lower is a combination of worry that Japanese shares will be disproportionally hit by a slowdown in the global economy and continuing concern that managers at Japanese companies aren't as sensitive to their shareholders as those at U.S. and European companies are. The slow pace of overhaul in the world's second-largest economy is also weighing on shares.</br></br>Yesterday, the benchmark Nikkei Stock Average fell more than 3.3% as concerns continued to build that the U.S. economy -- which takes in slightly less than 25% of Japanese exports and helps power many of Japan's other markets -- might slide into a recession.</br></br>So far this year, the Nikkei has fallen nearly 12% and now stands at 13504.51 -- a two-year low. The Dow Jones Industrial Average, by comparison, is off 6%.</br></br>The latest slump in the Japanese market, which has fallen irrespective of what stocks in the U.S. or elsewhere have done for the past three months, is damping optimism that shares here would rise as investors looked for bargains. The Nikkei's price/earnings ratio, which compares the price of a stock to its earnings, is now just below that of the S&P 500.