Active Investing in Japan

What to watch: Thursday, May 29: U.S. Revised Q1 GDP; Friday, May 30: CPI for April (May for select metropolitan areas); April – Industrial Production; April – Household income and expenditure survey; April – New housing starts; April – Unemployment and Ratio of Job Offers to Applicants

Ongoing: Commodities and forex volatility — more inflation reporting chicanery. Protectionist tendencies may be pressured by a report (and the realization) of $3.2 billion in cross-shareholding losses in FY2007, as well as greater urgency from within for acceptance of foreign investment. In the meantime, we can enjoy watching the latest round of TCI (The Children’s Investment Fund (UK)) vs. J-Power (JP: 9513). continue reading…

What to watch: Monday and Tuesday, May 19-20: Bank of Japan [BoJ] Monetary Policy Meeting; Tuesday, May 20: Monthly Report of (May) Economic and Financial Developments [BoJ]

Ongoing: Earnings season is in the home stretch; 150 announcements are scheduled for Friday (less than 50 are scheduled for the week of May 26); It goes without saying that external factors will continue to impact domestic stocks, however record oil and yen hovering around the ¥105 level have not stopped the Nikkei’s recovery of 14,000. continue reading…

What to watch: Earnings season peaks with over 1,700 companies reporting this week; Monday, 5/12: Economy Watchers Survey – March (Cabinet Office); Money supply data – April (Bank of Japan (BOJ)); Wednesday, 5/14: Corporate Goods Price Index – April (BOJ); U.S. CPI – April; Thursday, 5/14: Machinery Orders – March (Cabinet Office); Mansion/Condominium sales – April (Real Estate Economic Institute Co.); Friday, 5/16: GDP – January to March quarter (Cabinet Office)

Ongoing: Earnings, earnings, earnings! And as always, external factors will impact domestic equities, most noticeably rising commodities (record oil) and a weaker dollar (stronger yen): ¥102.80 on Friday vs. ¥105.4 the prior Friday. continue reading…

Thoughts on the Nikkei 225 Stock Average:

Japanese stocks have been rallying over the past several weeks and the benchmark Nikkei 225 Stock Average is now at a 2-month-plus high; the N225 recouped 14,000 last Friday in spite of thin trading of late, due to the extended holiday that continues through this Tuesday. Short-term, sentiment has improved drastically as buyers have emerged to pick up stocks with severely depressed prices and the kind of valuations that excite Warren Buffett; continue reading…

What to watch: Monday and Tuesday, May 5-6: Nothing — TSE closed (trading resumes Wednesday); Earnings season also resumes; Friday, May 9: Index of Business Conditions (Cabinet Office)

Ongoing: As always, external factors will impact domestic equities; however at present, conditions seem favorable given the weakening yen (now around ¥105/$1) and an accommodative Fed on all fronts. Concurrently, that the Japanese government is protectionist or that the Bank of Japan is helpless seems to be beside the point. Meantime, the ongoing question is whether Japanese stocks represent true value or instead, if the apparent value is merely an unobtainable mirage for gaijin investors. continue reading…