How Does Smithers & Co. view the Japanese Economy?
Up to September 2009 we had persistently warned that the economic and stock market outlook for Japan was worse than was generally recognised see for example Reports No. 310 Japan: Poor Market Outlook, Notably for Manufacturing 10th June, 2008 and No. 318 Japan: A Weak Economy, Falling Profits and a Strong Yen. 16th September, 2008. Subsequently we have, with equal persistence, warned that the general view had moved from over-optimism to excessive pessimism see for example Reports No. 344 A Better Profit Outlook for Japan than for the US 17th September, 2009, No. 347 Japan: A Brave New World? 12th November, 2009 and No. 358 Japan: The Dramatic Jump in Profits Should be Sustained. 25th March 2010. The Japanese stock market is probably the least expensive of all major markets and has relatively good profit prospects, partly because depreciation is large and falling. Due to its volatility and high correlation with the US, relatively good performance is more likely during market rallies tha
