Thursday, March 01, 2007

contrary investor on japan

this is only a small snippet from the very good piece. they also have comments and charts on the boj/monetary base, carry trade etc. interesting that marc faber has something similar to say about japan.

please click on the headline to read the full piece

diese hier ist nur ein kurzer ausschnitt von der sehr guten analyse. ausserdem sind dort gute charts und kommentare zum yen, boj, carrytrade etc enthalten. hervorzuheben ist ünrigens das faber ne öhnliche auffasung vertritt (s. link oben)

bitte auf die überschrift klicken

...........As we mentioned in the chart below, prior to action early week, the Nikkei price level stood at a percentage differential above it's 200 month MA not seen since 1997. You know that we have argued for years now that the 200 month MA is a very important demarcation line for the Nikkei, first acting as support in the initial post peak descent, being tested as the years progressed, and never being sustainably pierced to the downside until 1997.
But from what was to ultimately be the sustained break of the 200 month MA, the Nikkei dropped another 63% to its final bottom in early 2003, when the great global central banker induced reflation began. Although we may be wrong, in our minds, a sustainable break of the Nikkei to the upside above the 200 month MA will be quite the important tell for the ongoing longer term cyclical bull in Japanese equities. Is the current break to the upside the real deal? As you know, we're going to find out dead ahead. And it may be very important if the 200 month MA can hold amidst a touch of global equity market upheaval, shall we say. .........

..........So what might this mean for Japanese equities? While not necessarily a wild and exciting positive, it's rather a lack of what has been an important negative that's the meaningful point. Again, the Nikkei was probably the worst performing major economy equity market in 2006. And we believe a big piece of the reason behind this was the contraction in domestic monetary aggregates last year. That will be a big prior year negative that is absent in 2007. Is the lack of a negative a positive? Personally, we're more than willing to give thanks for small favors

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