Since Banking sector stock prices were one of the first which responded to the earthquake and Japan's financial system is also bank based (Allen & Gale, 2001), it is important to look, how Great East Japan Earthquake affected this sector.
The Japanese banking industry has recovered well from the 2009 crisis to consistently post moderate growth. This trend is forecast to continue through to 2017. Japan is the second largest banking industry in Asia - Pacific, accounting for over 26% of the region’s total assets. The Japanese banking industry had total assets of $11,065.8bn in 2012, representing a compound annual growth rate (CAGR) of 2.1% between 2008 and 2012. (MarketLine, 2013)
The banking industry serves a wide range of customer types: from mass-market individual consumers to high net-worth individuals, and from small to very large businesses.
Most banks offer a diverse range of products including: retail banking (home, small business, insurance), card services, investment banking, asset management, cash management, e-commerce products and services.
According to Bank of Japan Act, Article 1, 2 and 3, the purpose of the Bank of Japan, or the central bank of Japan, is to issue banknotes and to carry out currency and monetary control and to ensure smooth settlement of funds among banks and other financial institutions, thereby contributing to the maintenance of stability of the financial system. Bank of Japan is autonomous institution, however it shall always maintain close contact with government so that its currency and monetary control and the basic stance of the government's economic policy shall be mutually compatible. (Bank of Japan Act, 1997)
The segmented nature of the Japanese banking system (which com...
... middle of paper ...
...ic. It is reasonable to say that most of the company were affected of 15th of March which was the bottom decline. The biggest hit was to the Electric power industry, which is rather logical because this industry made real threat to the whole world due to disruption of one of the Nuclear Power Plant, which is the main source of electricity in the Japan. The electcic power industry keep fluctuating a lot for period up till now.
GDP is correlated with all of the variables which is logical because GDP is made from net trade, government and personal consumption as well as investment. However, it is also noticeable that the second biggest correlation with GDP after investment variable is for Nikkei 225, which means that the market capitalization is highly important in detecting the whole economy of the country.
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