Nikkei 225

detail below. Leeson’s Exposure Profile During the two years that Leeson played the Nikkei 225, starting in mid-1992, the index fluctuated heavily. During these fluctuations, Leeson would flip his future contract positions if the market moved continuously in the unfavourable direction. However, most of the damage was done towards the late end of this period in mid-1994. In June 1994, Leeson believed that the Nikkei 225 was going to rise in value, so he purchased a large amount of futures contracts.

Deflation refers to a situation where there is a reduction in the general levels of prices of goods and services. It takes place when the rate of inflation falls below 0 percent in that case the inflation rate is negative. Inflation decreases the real value of money while deflation raises the real value of money and this enables a person to be able to purchase more goods and services with the same amount of money than before (Hutchison et al, 2006). Japan as a country has really suffered from a long-lasting

This story begins with a former back office clerk being promoted to a derivatives trader for Barings Bank's Singapore Branch and ends with the collapse of a 232-year old banking empire. As we began researching this assignment, we all asked the same question, "How does a 28 year old trader bring about the collapse of a 232-year old banking empire?" To understand how this debacle came about, one must have a basic understanding of the nature of a derivative and what they are designed to do. Initially

and monetary standards including the yen. In the interim the Mexican Peso has hit an untouched low against the dollar. As dealers had expected an agreeable Hillary Clinton win, even a tight race is sufficient to start instability. Japan's Nikkei 225 is around 2.2% while the Hang Seng in Hong Kong is 3.5% lower and the Shanghai Composite has lost 1.3%. Australia's ASX 200 dropped by 3.7% while the Kospi in South Korea is 2.8% lower. Prior, Wall Street and European markets shut higher -

cheap funding, helping drive the Athens market down 3.4 per cent. The current affairs over the uncertainties over Greece have leaded the Eurofirst 300 to end at a seven-year high. With the concern about the US economy and a new rise in oil prices. Nikkei 225 / Japanese equities Tokyo market have been undermining with the help of reports of worries over global growth prospects and disappointing national

End-of-Chapter Question Solutions 1 ____________________________________________________________ ________________________________ CHAPTER 5: FOREIGN CURRENCY DERIVATIVES 1. Options versus Futures. Explain the difference between foreign currency options and futures and when either might be most appropriately used. An option is a contract giving the buyer the right but not the obligation to buy or sell a given amount of foreign exchange at a fixed price for a specified time period. A future

How Nick Leeson Destroyed the Barings Bank Introduction How did a trader in Singapore directly cause the collapse of the 230-year-old merchant bank in England? Nick Leeson was the head of Barings Futures Singapore (BFS) which is one of the subsidiary companies of Barings Group. In 1995, His unauthorized trading activities made Barings completely went bankrupt. This is the biggest financial scandal of last century. By interpreting the Barings case and the COSO framework which contains five components

the largest wholesale trading companies in Japan. The company was found in 1919; it is a member company of the Sumitomo Group. It is recorded on four Japanese stock exchanges (Tokyo, Osaka, Nagoya and Fukuoka) and is a constituent of the TOPIX and Nikkei 225 stock indices. Into a country a company conducts the activity through 26 representative offices. Besides Japan Sumitomo Corporation is presented as early as 65 countries (120 representative offices). In addition, directly export and import of products

The Bubble Economy The direct cause of the Japanese banking crisis was the collapse of the asset price bubble during the late 1980s to the early 1990s. During 1980s, sustained economic growth and low inflation rate were the main characteristics of macroeconomic environment in Japan. This condition caused the upward growth expectations of asset prices, uncontrolled credit expansion and financial deregulation. At the same period, the United States has a substantial increase in the current account

For a prolonged period of time, the Bank of Japan (BofJ) has implemented expansionary monetary policy tools in order to achieve price stability and economic growth. The inflation rate (CPI) target for the BofJ is currently 2%. The success of their monetary stimulus program has often been subject to the mercy of external market forces. The central bank has recently blamed Brexit for the failure of its monetary stimulus program, and extended economic ramifications. The banks quantitative easing (QE)