How to Play the Nikkei

Sometimes, retail investors want to earn money in international markets. Today at 6:30pm, the Japanese unemployment rate will come out and let investors know how the Japanese economy is doing. The number determines how Japanese companies as well as American companies such as Google GOOG, Goldman Sachs GS, and Disney DIS have helped the economy by hiring people. These companies essentially reflect how the average Japanese consumer is able to find jobs.

Positive jobless claim numbers indicate that consumers are able to put themselves out there and find jobs, even in the face of uncertain economic times. This indicates to traders that things may be better, after all, and tends to move the equity markets higher.

This afternoon, traders looked for the unemployment rate to be lower than the estimate of 4.5%. If the number is lower than the estimate, equity market futures will immediately move higher, and barring unforeseen European news or other macroeconomic news, will set the stage for the the Nikkei 225 when it starts trading in the evening.

Long-term investors should also keep in mind the jobless claims from the prior period. Initial claims come in every month, so long-term investors should keep track monthly snapshots of the job market. Any aberrations or sudden drops could mean that consumers are unable to find fortune with the economy and that companies are unwilling to re-invest in the public.

Investors should also keep in mind that the holiday season may artificially claims. Many companies hire temp workers to cope with abnormally high retail volume. However, if investors see a sudden increase in jobless claims, the economy may not be in the best position.

Consumers have a few options when it comes to understanding the Japanese economy. The initial jobless claims number is one indicator that could help investors gauge where the economy is heading into the future. Investors should also keep up with the news to stay on top of major developments that move markets.

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