Without diminishing for a moment the magnitude of the current crisis, or the human tragedies, Japan's prime minister exhibited one of the hallmarks of leadership in crisis by reminding his countrymen of their heritage.

In invoking Japan's history of resiliency and determination, Kan tapped into one of the most powerful factors in human resiliency: knowing you have the strength, knowledge and stamina it takes to make it through, because you have made it through other adversity in your life.

In these early stages, it appears that Japan's cultural norms are providing some of the effective interventions needed following a disaster of this scale.

In 2007, an international panel of experts developed a list of five conditions that need to be created in the early stages of mass trauma: 1. a sense of safety; 2. calm, 3. a sense of self and community efficacy; 4. connectedness; and 5. hope. Watching the videos of Japanese citizens in the aftermath of their calamity, one can observe many of these interventions already at work.

The citizens of Japan have a benchmark for their conduct in the years to come. Ironically, the aging Japanese population may become a strength in the current crisis; the older citizens have the most experience in facing the challenges. Japan should emerge in a few years as a stronger and even more competitive world power.

David Fuller's view I agree. With its long deflation, declining population and frequently underperforming stock market, one had cause to feel that Japan had lost its way.

However we also know from Japan's ancient culture and its remarkable economic development following World War II, not to underestimate these highly educated people also known for their social cohesiveness.

From an investment perspective, this month's tragic events in Japan have created an opportunity to buy at lower valuations. However I would proceed cautiously. Today's bounce by the Nikkei Index (monthly historic, weekly & daily), while encouraging, probably owes more to short covering than bargain hunting. Therefore I would not chase any short-term rebound in buying Japanese equities.

We need to remember that Japan's stock market was in what Fullermoney has often described as a lengthy phase of base formation extension following the October 2008 and March 2009 lows. The earthquake / tsunami / nuclear power station disasters have real economic consequences which are obviously highly negative for Japan's economy over the medium term. The ramifications of this damage will need to be fully assessed, in my opinion, before the stock market stages a sustainable recovery.

In other words, the Japanese stock market's base formation extension phase will be lengthened by this crisis. Therefore investors considering Japan should have more time to assess portfolio opportunities. In particular, from an investment perspective, I would not consider buying any Japanese equities or funds until we are certain that no further radiation leaks are occurring at the Fukushima Daiichi Plant. From a trading perspective, market plunges always create short-term buying opportunities, and I would not be surprised to see the Nikkei retest its eventual post-crisis lows several times before a significant uptrend occurs. (See also yesterday's comments.)