Japanese stock market plunge continues

Economists are calling it a correction, critics are calling it a disaster and Japanese government officials are calling it a transitory effect of so-called "Abenomics," a fiscal and monetary methodology that mimics many of the efforts undertaken by the U.S. government and the Federal Reserve. Central bank authorities in the island nation pushed trillions of yen worth of liquidity into the market, which had an immediate effect of sending stocks to record highs. However, in the weeks since Prime Minister Shinzo Abe re-took his old office, investors have grown increasingly anxious about the country's towering debt load and seeming inability to spark economic growth.

According to Bloomberg News, the Nikkei index fell 4.8 percent only a week after a similar 6.9 percent plunge. While late-hour action by buyers provided some support, critical elements of the Japanese economy – including real estate – continued to show signs of rapid deterioration. The TOPIX real estate index has fallen 20 percent during the past month, Zero Hedge reported, suggesting that even appetites for normally safe industries such as housing are exhibiting proof that Japan's debt crisis may be worsening.

For their part, officials from the Abe administration are stressing that recent developments are just a knee-jerk reaction and that long-term growth outlooks – despite energy shortages and a worsening situation in Fukushima – remain strong.

"It's natural that stocks will move randomly," Koichi Hamada, one of the prime minister's advisors, said in Tokyo on May 29. "Excessive upward or downward moves can happen any time."

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