Japan's Influence on Asian Stock Markets: A Teaching Idea

Japan's Influence on Asian Stock Markets: A Teaching Idea


(To see larger versions of the above charts, please click the Nikkei 225, KOSPI, and Hang Seng links in blue below.)
The combination of the charts of the hourly change in the prices of the stock indexes for Japan (Nikkei 225), South Korea (KOSPI), and Hong Kong (Hang Seng) indexes all show a distinct rise shortly after noon Japan time on Friday, November 21.  This rise coincided with a statement made by Japanese Finance Minister Shoichi Nakagawa at the Tokyo Foreign Correspondent's Club.  As quoted in numerous newspapers throughout world, the key point of Nakagawa's statement was: "Whether it is the stock market or foreign exchange, sudden and extreme changes are not welcomed. ... If we see such cases, we must take appropriate and necessary actions." (AsiaOne News). 

A combination of this statement with the charts above can be used a an in class activity for a variety of purposes, including as a means of synthesizing data.  On a simple level, students can simply look at the statement and the charts and attempt to draw obvious conclusions.  On a more advanced level, students can analyze why the statement had this influence discuss the interconnectedness of the Asian economies/world economies, and the ability for literally billions of dollars in the value of economies to fluctuate based on one statement by the Finance Minister of Japan rather than any real, substantive policy changed.  

Below you'll find a link to an introductory article in the New York Times describing the press conference and reaction.  We've also listed rough numbers for the Nikkei 225, KOSPI and Hang Seng for Friday, so that your students can create their own graphs similar to the ones above.  

Asian Markets Recover, Erasing Early Decline
November 21, 2008
New York Times

"Asian stock markets rebounded from early declines Friday after Finance Minister Shoichi Nakagawa of Japan described recent turbulence in currency and equity markets as undesirable and said that governments should be prepared to take action, The New York Times’s Keith Bradsher and Bettina Wassener reported."

9:00 am 7530 923  
9:30 am 7464 926  
10:00 am 7467 933 11906
10:30 am 7492 940 11957
11:00 am 7532 940 11922
11:30 am 7532 940 12060
12:00 pm 7560 938 12135
12:30 pm 7591 948 12851
1:00 pm 7640 955 12851
1:30 pm 7809 977 12851
2:00 pm 7748 984 12851
2:30 pm 7862 996 12851
3:00 pm 7910 1012 12651
3:30 pm     12700
4:00 pm     12670