"In answer to your question about why Peter Tasker thinks inflation would be positive for the Nikkei:

"It is a pretty straightforward argument if I have grasped it correctly. The logical reaction to deflation is twofold: to delay consumption in anticipation of lower prices, and to save money in low risk (or risk free assets) such as JGBs which become more valuable as the value of money rises relative to goods.

"This of course is what the corporate sector and to an extent the individual has done in Japan. It's effect has been to allow the government to issue endless JGBs and not to address the fiscal deficit (despite the collapse of tax revenues as the domestic economy fails to grow)

"Peter's argument if that the BOJ sets an inflation target and especially if it achieves it then all this goes into reverse: simply sitting in JGBs means the real value of savings declines so investors move into risk assets such as equities pushing them up. Consumers stop waiting for prices to fall and start consuming which stimulates the domestic economy. Corporates might stop sitting on piles of cash and either pay dividends (chance would be a fine thing!) or spend it on something. Tax revenues pick up but borrowing costs for the State rise so they have to address the fiscal deficit.

"The switch into risk assets and the pick up in consumption would be the key positive for equities.

"Having spent nearly thirty years broking or investing in Japanese equities I think I'll believe it when I see it! Peter's grim determination to outlive the great bear market outlasted mine!

"PS.. I very much enjoy your service but would have found it easier to use initially if you included more of a detailed introduction to what it offers, outline the "Fuller money themes". Also, when you refer to things like 200 day ma's it would save time if you could remind us where they currently are."

David Fuller's view Thank you for this very informed and concise explanation which certainly makes sense to me.

Also, Japan could use, but is very unlikely to get, a reversal of its present demographic table which shows a majority of older people. Older people tend to spend less on consumption, especially if they are concerned about income. Perceptions about the future are also crucial to consumer spending. When it appeared as if Japan's economy could do no wrong in the 1980s, its people were the world's biggest per capita spenders.

Thanks also for your post script suggestions. We can do more to help new subscribers get up to speed. This usually takes a few months as Fullermoney is an information resource for hands-on investors. It helps if they listen to the Audios, use key word Searches of the Archive and are not strangers to price charts. The 200-day MAs can be seen on most weekly charts that we post. We think they are most useful when viewed as a medium-term trend mean, for instruments which are clearly trending rather than ranging.