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Japan Press Service Co., Ltd. is the only news agency providing information of progressive, democratic movements in Japan

Frenzy of high stock prices over short sale
Akahata editorial (excerpts)

The Tokyo Stock Exchange has faced confusion due to a mishap by a brokerage company. Mizuho Securities mistakenly offered more than 40 times the number of outstanding shares in a newly listed staffing firm and they were traded.

The crux of the matter is that the TSE accepted the sell order for shares that did not exist, and that Mizuho Securities' attempt to cancel the order failed. Distrust in the TSE system which is supposed to support the Japanese stock market and play a part in the international market is now spreading.

Despite the government argument that the Japanese economy is on a recovery track, the reality is that only a handful of large corporations and major banks are benefiting from the so-called economic recovery. Workers' salaries have declined for the last six straight years, bringing the total of losses to 21 trillion yen. The Koizumi government's "structural reform" policy helped corporations to siphon off income from working families.

A Bank of Japan survey shows that an increasing number of large corporations believe that business sentiments that have peaked are likely to fall. A sharp rise in the stock market in such a period means that the high share prices do not reflect actual business performance.

The rise in share prices is not a phenomenon peculiar to Japan. A Daiwa Institute of Research Ltd. survey shows that share prices are rising in many countries.

In Japan, the United States, and Europe, monetary relaxation has caused a money glut worldwide, with gains from the soaring crude oil price as the main source. The sharp rise in share prices is a result of the inflow of speculative money into the Japanese stock market from Japan and abroad, rather than due to economic recovery.

The government has encouraged stock investment through tax breaks for the rich and deregulations on corporations. This only helped business circles to break the rules of the market to grab enormous gains. U.S. speculators inside and outside the stock market get such profits.

U.S. speculators are making such easy gains at the expense of small investors, most of whom are ending up as losers.

The recent trading mishap is a warning sign that Japan should review the mechanism of the stock market and the economy.
- Akahata, December 14, 2005