"Looking at the long term charts of the Yen vs Dollar, Aussie & Pound I would have to agree with your assessment,"

"A few thoughts on Japan...

"Looking at the long term charts of the Yen vs Dollar, Aussie & Pound I would have to agree with your assessment, what we appear to have witnessed is a major base formation over the last 16 or so years, and the recent weakness in the Yen, is but a proverbial drop in the ocean compared to where its come from since the early 70`s, my hunch also is that the next few years could see quite substantial Yen weakness !!

"I returned to Japan in 2003, even buying property here, believing the country was about to turn around, this followed many visits to Japanese companies in 2002 which gave me grounds to be optimistic! For nearly 5 years I was correct, but the global financial crisis and Yen daka (strength) unravelled most of that good work. Last Nov / Dec as Abeconomics started, I too, took to the more optimistic side, initially buying large financials, banks plus insurance cos, and large trading cos, I thought their valuations i.e. circa 0.5 Book, 5 to 10 PER and many yielding 3 to 5% where too compelling to miss. Many with superb charts showing major base formations, not unlike the one I have attached, i.e. a sleepy railway company. So many companies now do appear to be breaking up out of 2/3/4/or even 5 year trading ranges/bases, these companies cover a broad range, not just exporters, but also so many related to the domestic economy.

"Japan over the last couple of decades has maintained very good infrastructure maintenance and new spending, ie the roads, rail and air are all ready for increased use if we do see a new era of economic growth. If we are entering a period of Yen yasu (weakness) I believe Japan could finally show the kind of long term potential, I originally envisioned back in 2003 !!

"The valuations still show many 1st & 2nd section companies selling on 0.5 to 1 times Book value, less than 10x PER, and yielding 2 to 4%, which is very compelling verses both historic valuations and the returns that can be had from the bond market here.

"The domestic picture combined with what`s happening in the whole of this geographical area, both economically and the way Abe seems to be trying to mend any damaged political bridges, i.e. with China and South Korea also add to the optimism.

"I don`t think I`ve become too blinkered, being so close to every thing here, I too, do believe Japan could finally pull out of its 2 decades plus of under-performance.

"PS Eoin, thank you for your help with the 2nd section stock information. I thought 4 in particular, based on their charts and valuations look very interesting, 7287, 8066, 6143 & 9033!"

David Fuller's view On behalf of Eoin and I, and the Collective, thank you so much for this experienced assessment and firsthand view.

We maintain that Japan is now finally one of the most interesting investment plays available. And for maximum benefit while yen weakness remains consistent, we would stay short the Japanese currency, shown here inversely against the US dollar.