At present, public opinion is still highly divided, but what is interesting is that in mid-December there was a general election in Japan and the DPJ, who had been the ruling party, and who were in favor of eliminating nuclear, were defeated and the LDP came back. They had been saying it was irresponsible for the government to insist we can reduce nuclear power to zero and that Japan needs to take time to consider the best energy mix.

So it is interesting that the public view is divided in this way and the LDP, who noted it is not possible to eliminate nuclear power, won an overwhelming victory. Clearly, the biggest priority in the campaign was not energy -- so it is important not to make too much of this. The main issue was economic revitalization and second, a range of social security issues. Energy was maybe the third most important. However, in any case Japanese opinion is still divided, but somehow most people are starting to consider the ramifications of Japan without nuclear and whether it can survive without it.

My view is that we need to have a balanced approach and not over-rely on nuclear or for that matter any other energy source. We need to consider and utilize it in a balanced way. For example, maybe 20-25% of our electricity should come from nuclear, down from the 30% or so it represented in 2009-2010 before the disaster. That may not sound like a big reduction -- but before the disaster there had been plans to raise nuclear power to 50%, given its positive impact on climate change, as it has zero emissions.

David Fuller's view Given Japan's energy dependence, it is sensible for Shinzo Abe's government to inspect, modernise and restart many of Japan's nuclear power stations.

Japan would also like to import shale gas and oil from the USA, as Masakazu Toyoda mentions on page 9. This is certainly understandable given the current cost advantages, which he explains, but I think this would only be token support from the USA. Despite a politically green president, most influential people in the USA will want to preserve their energy advantage, not least while the economy is still soft and the country needs to attract manufacturing industries.

However, Japan could build some political bridges within Asia, not least among the ASEAN countries, and import more oil and natural gas from them. This would probably take time but it surely makes long-term sense and Japan could offer technological assistance.

What does this interview suggest in terms of Japan's economic potential following the political change and new policies?

At the risk of becoming too enthusiastic and getting way ahead of events, I think we could be at the beginning of Japan's third seminal change since the 1960s. Fifty years ago, Japan was just a post-WWII developing economy. However, in the early 1970s, and some veteran subscribers will remember this, we began to see that Japan had extraordinary organisational and manufacturing skills.

Japan's meteoric rise in the 1980s was astonishing but in 1989 the bubble characteristics were obvious, and easily the biggest for a major economy that I have witnessed in stock markets. The subsequent bear market was predictable but also lasted much longer than I ever expected. There were some significant rallies, commencing in 1995, 1998 and particularly 2003, but none were sustained.

I continue to expect another significant rally for Japan (historic, weekly & daily) this year, and it actually commenced in mid-November from a trough in the region of the 2003 low. However, given the policy changes and the new consensus that appears to be developing in Japan, this recovery could be bigger than its post-1989 bubble predecessors. A considerably weaker yen (shown inversely against the USD - historic, weekly & daily) than most people are currently expecting would also be part of the process.

In saying this I have shared my hunch with you, but the reality check that we should all pay attention to will be the price chart action.

Incidentally, f eedback from subscribers who specialise in, or live in Japan, would be appreciated should time and your interest allow.

Lastly, Keith Rabin attached these comments with the link to the interview above:

"Morning - Greetings from Sunny Yangon. Please see article/interview above which you might want to post and will find of interest.

"If you can, please do me big favor :) and complete brief four question survey in link enclosed. It will take minute tops and Japanese favour this - and would like to maintain/expand this program next year."

I have completed the survey and invite subscribers to do so as well, as it only takes a few moments and may ensure further reports of interest.