David Fuller's view I last reviewed Japan on Monday but it merits another update today.


Japan rallied more strongly and has also fallen back more sharply than I expected, although the chart signals were certainly clear. That is the nature of really exciting markets. Today, the Nikkei, Topix, TSE2 and TPNBNK are a lot closer to their rising 200-day MA. However, the yen as also strengthened, shown inversely as USD/JPY. This may result in some additional weakness followed by a period of ranging, before these Japanese stock market indices resume their upward trends.

Lastly, I agree with the Deutsche Bank report's conclusion: the risk of a crash in Japan is small. Instead, I think it has only seen the first leg of a bull market. I am comforted that many more pundits appear to be bearish of Japan, and will become wary when the forecasts are uniformly bullish.