Appendix: Stock Market Vocabulary Expedition Team (Glossary) 📖🔍
Hello explorers! Throughout our "Nikkei Stock Average Time Travel," many new "stock market terms" and economic jargon have appeared. This page summarizes the main terms and their simple explanations so you can check them anytime you wonder, "Hmm, what did that word mean again?"
Here are some key terms (this is not an exhaustive list but covers important concepts from our journey):
Key Economic & Stock Market Terms
- Nikkei Stock Average (Nikkei 225)
- The main character of our site! A stock market index calculated from the stock prices of 225 representative companies listed on the Prime Market of the Tokyo Stock Exchange, selected by Nihon Keizai Shimbun, Inc.
- Stock Price
- The price per share of a stock. It fluctuates based on the company's popularity, performance, and overall economic conditions.
- Bubble Economy (Japan)
- A period in the late 1980s to early 1990s when Japanese stock and land prices inflated to abnormally high levels, far exceeding their intrinsic value, before crashing.
- Plaza Accord
- An agreement in 1985 among G5 nations to devalue the U.S. dollar, which led to a rapid appreciation of the yen and is considered a remote cause of Japan's bubble economy.
- Lost Decade(s)
- The prolonged period of economic stagnation in Japan following the collapse of the bubble economy in the early 1990s, extending for ten, twenty, or even thirty years.
- IT Bubble (Dot-com Bubble)
- A period in the late 1990s to early 2000s characterized by a rapid rise in stock prices of internet-based companies, followed by a sharp crash.
- Lehman Shock (Global Financial Crisis of 2008)
- A major global financial crisis triggered by the bankruptcy of the U.S. investment bank Lehman Brothers in September 2008, largely due to the subprime mortgage crisis.
- Abenomics
- The economic policies advocated by former Japanese Prime Minister Shinzo Abe from late 2012, featuring "Three Arrows": bold monetary easing, flexible fiscal policy, and a growth strategy.
- Corona Shock (COVID-19 Pandemic)
- The global economic crisis triggered by the COVID-19 pandemic starting in early 2020, leading to lockdowns, supply chain disruptions, and sharp stock market declines followed by rapid recoveries due to massive stimulus.
- Deflation
- A sustained decrease in the general price level of goods and services. Japan experienced a long period of deflation after its bubble economy burst.
- Inflation
- A sustained increase in the general price level of goods and services. Moderate inflation is often seen as a sign of a healthy economy.
- Monetary Easing
- Central bank policies aimed at increasing the money supply and lowering interest rates to stimulate economic activity.
- Monetary Tightening
- Central bank policies aimed at reducing the money supply and raising interest rates, typically to combat high inflation.
- USD/JPY Exchange Rate
- The rate at which U.S. dollars can be exchanged for Japanese yen. A lower number (e.g., 90 yen/dollar) means a stronger yen (endaka), and a higher number (e.g., 110 yen/dollar) means a weaker yen (en'yasu).
- Dow Jones Industrial Average (DJIA)
- A major U.S. stock market index representing 30 large, well-known American companies.
- Nasdaq Composite Index
- A U.S. stock market index of all stocks listed on the Nasdaq stock market, with a high concentration of technology companies.
- PBR (Price-to-Book Ratio)
- A financial ratio used to compare a company's current market price to its book value. A PBR below 1 may indicate that the stock is undervalued.
This concludes our "Stock Market Vocabulary Expedition Team"! There were many terms, but try to remember them bit by bit, and they might help you when reading news or newspapers!
And with this, the entire curriculum of "Ultra Sensei's Nikkei Stock Average Time Travel" is complete! Everyone, you've worked really hard for a long time! A round of applause! 짝짝짝! 👏👏👏
Ultra Sensei would be very happy if what you learned on this site sparks your interest in economics and society from now on!