Deutsche's Musha Says Nikkei May Fall to 5,000

April 25, 12003

TOKYO, April 25 (Reuters) - Japan's Nikkei stock average may fall to the 5,000 level given a lack of effective policy measures from the government, an influential strategist said on Friday.

"The market is nearing a meltdown stage," Ryoji Musha, chief strategist at Deutsche Securities in Tokyo and ranked Japan's top equity strategist in a recent poll by Institutional Investor magazine, told Reuters.

"It is possible the market may decline as far as 5,000 given no positive change in policy," added Musha, who is known for his bearish views on the Japanese stock market.

The Nikkei tumbled more than two percent to a fresh two-decade intraday low of 7,678.15 on Friday morning, led by a slide in Sony Corp after the world's top consumer electronics maker shocked investors by falling far short of its earnings targets and warning of a profit decline ahead.

"It has become clear that even Sony, one of Japan's most excellent companies, has fallen on such hard times," Musha said.

Musha said an "exodus" from Japanese equities was occurring, and that bold reforms including an injection of public funds into the nation's fragile banks was needed to turn the tide.

"If things continue as is, a disastrous result is likely. Investors are fleeing," he said.

Musha explained that he had not changed his downside target for the Nikkei of 7,000, but that the possibility of a fall below that level was possible given the deteriorating environment for Japanese stocks.

http://biz.yahoo.com/rf/030425/markets_japan_stocks_low_1.html