Japan in the Tank

While equity markets around the world have been charging to new 52-week highs over the past six months, Japan's Nikkei-225 has been stumbling.  As shown below, the Nikkei has been in a downtrend since early August, and it just broke to new short-term lows in recent days.  The S&P 500 is up 16.57% over the last six months while the Nikkei is up just 2.79%.

 

Comments

[djvu]

good post. But if you could repost the chart with dollar adjusted returns(view it thru the dollar carry trade POV),keeping in mind YEN vs USD has appreciated 30% from 120 to 90, I reckon the `gap`would reduce or maybe Nikkei outperform S&P.

[Michael]

Japan has tremendous potential for growth as it is surrounded by other high growth countries in the region.

This will become a major buying opportunity in my opinion, especially if it were to go down another 5-8% from here, because right now it is still, a Sell.

All it will take is for the Japanese to figure out how to get the exchange rate of the Yen lower.

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