With the downtrend in share prices continuing unabated, the Nikkei average fell below 10,000 earlier this month for the first time in about a month.
In contrast with the firm trend of U.S. stocks, the Tokyo market is expected to reach for the bottom, after having earlier hit bottom on Sept. 17.
The first bottom was largely created by panic-stricken share sales in the wake of the Sept. 11 terrorist attacks.
Current stock price falls are attributable to problems in Japan, including the irritatingly slow pace of structural reforms and concerns about further aggravation of economic fundamentals.
The recent weakness should be taken as a market warning that the disposal of bad loans at banks and structural reforms should be accelerated.
While the Tokyo market has hit a bottleneck, there have been two noticeable changes since the Sept. 11 attacks.
The first is the quantitative easing of credit by authorities. Specifically, ample liquidity in the financial market has stimulated trading in markets for promising stocks.
The second change is earnest restructuring launched by firms. While revenues are falling, restructuring will help them grow in the long run once they turn upward.
Also noticeable was the fall in the long-short ratio of margin trading to 1.04 on Nov. 9, the lowest on record, indicating the current bear market is nearing an end.